Scalping Basics

As with any other style of trading, there are many different methods of scalping. The most well known scalping technique is to use the market's time and sales to determine when and where to make trades. Other scalping techniques are similar to other trading styles in that they use charts, and determine when and where to make trades using price patterns, support and resistance, and technical indicator signals.

Scalping using the time and sales is referred to as tape reading but there is no tape itself anymore. It has been replaced by a scrolling Times and Sales and the OrderBook. But the term and the principles are still alive and are as useful as ever based on two aspects that will never change: The Human Psychology and Supply/Demand rules.

Scalpers must be very disciplined to follow their system no matter what. Scalpers must be able to make decisions without any hesitation, and without questioning their decisions once they have been made. However, scalpers must also be flexible enough to recognize when a trade is not proceeding as expected, and take action to rectify.