subject: How To Trade On The Stock Market From Home - Scalp Trading the Stock Market For a Living [print this page] How To Trade On The Stock Market From Home
Scalp trading is a high speed style of trading where you buy and sell a stock within a time frame of seconds to minutes executing many transactions within a day. Although you will be looking for gains of only 1 or 2 pennies per trade, when you consider the amount of shares you will be flipping, this can amount to healthy profits. Furthermore, you can still make a profit even if your trade ends up flat. Why? Because when you add liquidity to the market, the ECN will provide you with a rebate. Focusing on this alone can generate a good income. In short, scalp traders work at exploiting the bid-ask spread.
They buy a stock on the bid then immediately sell at the ask. Since this style of trading does best on low priced stocks that don't move much, scalp traders profit by making hundreds of trades. Scalp trading has no homerun profits, at the same time there are lesser chances of losing and so it is a safer method of trading the stock market. But wait. Not just anybody can scalp trade. You need the proper tools and rates to trade this style. It requires extremely discounted scalp trading rates and special order routes to the trading floor. Both of which you would have a hard time finding at your E*trade or Scottrade broker. So how can you do this? Well, you need to find a reliable proprietary trading firm that will accept you as an experienced professional trader. And if you are not, you will need to find a proprietary trading firm that will teach you. How To Trade On The Stock Market From Home
Scalp Trading With A Proprietary trading Firm
Finding the right proprietary trading firm is about finding a firm that will let you trade their capital and have deeply discounted commissions. Many proprietary trading firms will let you join their group with only 5 or 10 thousand dollars. For that, they will let you trade with $100,000 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 they will want a percentage of your profits. Most will take 10 to 50% but that will depend on your experience. The more profitable you are, the less they will ask for.
The most important decision when finding a proprietary trading firm for your scalp trading method will be price and routes offered. Ask them how many floor routes they have and if they can assign your own personal floor broker. Many proprietary trading firms will do this if you are a large volume trader. Next, find out what their commission rates are. Ideally, you want to find a firm that will charge from.0005 to.0007 per share. On a 1,000 share trade, that would be 50 to 70 cents in and out; much better than your $8.95 per trade rate that many online brokers charge. Also make sure they pass the rebates back to you because as you will learn, the rebate portion of the trade will be your bread and butter to profitable scalp trading. How To Trade On The Stock Market From Home
How To Trade On The Stock Market From Home - Scalp Trading the Stock Market For a Living
