The principal aim for scalpers is to achieve as many small profits as possible, rather than long-term trading strategies that aim to achieve a small numbers of wins but on a much larger scale. This way, they are able to dip in and out of the market more flexibly.
Scalping is a preferred trading strategy for some traders due to the theory that small price changes are easier to predict than larger ones, and some short-term strategies propose less risk. As there is a very limited time exposure to the market, scalpers are less likely to run into overwhelming changes and pitfalls. However, scalping can also present risks from market volatility, as scalpers tend to trade in highly liquid and volatile markets, and this can result in losses.
In particular, scalping strategies are used within the commodities and foreign exchange markets, as these assets are known to fluctuate regularly. Commodities such as gold and cocoa and currency pairs including the USD/EUR can change rapidly in price over a short timeframe, depending on supply and demand, as well as more fundamental and economic indicators.
Scalpers trade derivative products such as trade with leverage, which can provide huge profits if the trade is successful, although losses will be magnified if the markets move in an unfavourable direction. and (CFDs) on the price movements of an underlying asset, whether this be a currency pair, share or commodity, instead of owning the physical asset. This allows them to