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Scalp trading is a high speed method of trading where traders execute trades 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 transaction/trade, when you take into consideration the amount of shares you will be trading, your results can be substantial. Furthermore, you can still make a profit even if your trade ends up flat. how come Because if you add liquidity to the market, the ECN will rebate back to you a portion of the trade. Focusing on this alone could generate a good income. In short, scalp traders trade in between the bid-ask spread. They buy a stock on the bid then quickly sell at the ask. Since this method of trading performs better on low priced stocks that don’t move much, scalp traders generate revenue by trading big volume. Scalp trading has no big one time profits, but at the same time there are fewer not being profitable and so it is has a lower risk level than swing trading or day trading. However, scalp trading is not easily done. There are tools that are necessary and you must have discounted commission rates. It requires extremely discounted scalp trading commissions 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 take you on as an experienced professional trader. And if you are not, there are some proprietary trading firms that will educate you.

Looking for a good proprietary trading firm means locating a firm that allows you to trade their money and provide attractive trading fees. Most prop trading firms will let you join their group with only 5 or 10 thousand dollars. With that,For that, they will provide you with $100,000 in buying power or more if you have a profitable track record. It’s not rare for a proprietary trading firm to accept risk deposits of $10,000 and provide you with the ability to trade with $300,000 but you need to realize that Prop firms are paid a percentage of your profits. Many will take 10 to 50% but that will depend on your past history. The better your track record, the less they will require.

The most important decision when looking for a prop 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 provide you with your own personal floor broker. Any good proprietary trading firms will do this if you are a large volume trader. Next, see what their trade rates are. Ideally, you want to find a firm that will charge .0005 to .0007 per share. On a 2,000 share trade, that would be 1.00 to 1.70 dollars in and out; much better than your $8.95 per trade rate at E*Trade. Be sure to also confirm that 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 your scalp trading.

Many courses are available that instruct the art of scalp trading. Become educated so you can improve your chances for success. Furthermore, if you need a reliable company to trade with, the proprietary trading firm below has deeply discounted rates, many floor routes and a solid training program. Good trading.

Anthony is responsible for the Affinity Trading Group website. Affinity is an educational and proprietary trading firm helping individuals to learn day trading. They train their students to be professional traders and allow them to trade the company’s capital. More info about their scalp trading programs can be found online.