Quick In And Out Profits With Scalp Trading

Scalp trading is a very fast style of trading by which traders make trades in a frame

of time from seconds to minutes transacting many trades during the day. Even though you will be looking for gains of only 1 or 2 pennies per transaction/trade, when you consider the high volume of shares you will be flipping, the profits can add up nicely. In addition, profits can still be had even when your trade breaks even. Why? Because if you add liquidity to the market, the ECN will rebate back to you a portion of the trade. Incorporating this one strategy can provide consistent profits. Specifically, scalp traders trade in between the bid-ask spread. They buy a stock at the bidding price then quickly sell the same position at the asking price. Since this method of trading does best with low priced stocks that are slow moving, scalp traders generate revenue by transacting large volume. Scalp trading has no big one time profits, yet there are lesser chances of losing thus it tends to be a lesser risk style of trading. However, you must be properly set up to scalp trade.

There are tools that are necessary and you must have discounted commission rates. It requires extremely discounted scalp trading rates and privileged access to the NYSE floor. Both of which you would have a hard time finding at your online discount broker. So how can you do this? There are proprietary trading firms that accept you as an experienced professional trader. And if you are not, you will need to find a proprietary trading firm that will educate you.

Finding a good prop firm means finding one that allows you to trade their capital as well as offer rates that are discounted. Many prop trading companies will allow you join their group with deposits as low as $5,000. For that, they will provide you with $100,000 in buying power or more depending on your experience. It's not unheard of for a proprietary trading firm to take a $10,000 deposit and provide you with buying power of $300,000 but you need to realize that Prop firms are paid a percentage of your profits. The profit sharing scale can range from you getting 50 to 95% but that will depend on your experience. The better your track record, the less they will ask for.

An important point to consider when looking for a proprietary trading firm for your scalp trading method will be price and floor access offered. Ask them how many floor routes they offer and if they can assign your own personal floor broker. Most proprietary trading firms will do this if you are consistent in trading good volume. Next, see what their commission rates are. Ideally, you want to find a firm that will charge from .0005 to .0007 per share . On a 3,000 share trade, that would be 1.50 to 2.10 dollars per roundtrip trade; an improvement over the $8.95 per trade rate at Scottrade. Be sure to also confirm that they pass the rebates back to you because as you will learn, the rebate can be an added bonus to profitable scalp trading.

Many courses are available that instruct the art of scalp trading. Get educated so you can improve your chances for success. In addition, if you need a reliable company to trade with, the proprietary trading firm below has deeply discounted rates, good floor routes and extensive trader education. Profitable trading.

by: Anthony Nunes..

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