Flowsense

Trading glossary

Scalping

A short-term trading style that aims to take many small profits from minor price moves, with positions held from seconds to a few minutes.

Scalpers trade on low timeframes, such as the one-minute chart or the order book itself, and target moves of a fraction of a percent. Because each gain is small, costs dominate: fees, spread and slippage can decide whether the strategy is profitable. Scalpers favour the most liquid markets and often use limit orders to pay maker fees.

Example

A scalper targets 0.25% per trade on BTC with a 0.15% stop, about 1.7R, and a break-even win rate of 37.5%. With market orders at 0.05% on entry and exit, fees take 0.1% per round trip: the net reward is 0.15% and the net risk 0.25%, so the real ratio drops to 0.6R and the break-even win rate rises to 62.5%.

Why it matters

Scalping gives many trades and fast feedback, but small edges are fragile. Understanding the cost structure is the difference between a scalping strategy that works on paper and one that works after fees.

Common mistake

Scalping with taker fees and expecting the gross numbers to hold. Judge the strategy's statistics net of every cost, and consider maker-only entries or a better fee tier before scaling up.

Put it into practice

FAQ

Is scalping profitable?
It can be, but the edge per trade is small, so fees, execution and discipline matter more than in slower styles. Many scalpers lose mainly to costs.
What timeframe do scalpers use?
Usually the one-minute to five-minute charts, often with order book and tape reading. Positions rarely last more than a few minutes.
Which markets are best for scalping?
The most liquid ones, such as BTC and ETH perpetuals on large exchanges, where spreads are tight and slippage is low.
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