What it is
Scalping is a very short-horizon style: many trades held for seconds to minutes, each aiming for a small increment, relying on liquidity, tight spreads and fast execution rather than on any view about where the instrument is going over the day.
How it works
The tools are the order book and the tape rather than higher-timeframe structure — resting size, absorption, the pace of prints, imbalance at the touch — supplemented by session VWAP and short-interval levels. Risk per trade is small and the hit rate must be high. Some variants are effectively market making, quoting both sides and earning the spread plus exchange rebates rather than a directional move.
How traders use it
Profitability is decided by the cost structure more than by the signal. Spread, commissions, exchange fee tiers and slippage are subtracted from every one of a very large number of trades, so an average gross edge of a few ticks turns negative the moment costs rise. Access matters too: professional participants operate with colocation and latency advantages that ordinary retail infrastructure cannot match.
Where it breaks down
The failure modes are specific. A single position held through a fast move can erase dozens of wins, so the discipline to take small losses instantly is not optional. The style is unusually demanding of attention and punishing when executed poorly, and in some jurisdictions pattern day trading rules and margin requirements restrict how it can be run at all. Anyone attracted by the high win rate should look first at the size of the largest loss.
Educational reference. This entry describes how a concept is defined and used. It is not investment advice, not a recommendation, and not a signal. Any rule you build from it should be tested with realistic costs before it is traded, and no historical result guarantees a future one.