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The fastest, most intense style of trading — many small trades, small profits each.
If intraday trading operates on a same-day timeframe, scalping compresses that even further — positions are often opened and closed within seconds to a few minutes. It's the fastest, most intense style of trading, aiming to capture very small price moves repeated many times over a session. This lesson explains how scalping actually works, what it demands from a trader, and why it's rarely a realistic starting point for beginners.
A scalper enters a position expecting to capture a small move — often just a fraction of a percent — and exits almost immediately once that target is hit, or cuts the trade quickly if it moves the wrong way. The strategy relies on doing this many times in a single session rather than on any single trade being large.
For example: a scalper buys a stock at ₹500.00 expecting a quick move to ₹500.50 based on order-flow and momentum signals. If it hits ₹500.50 within a couple of minutes, they exit immediately — a gain of just ₹0.50 per share. Done with size and repeated 20-30 times through the day, these small gains can add up. But each one also depends on getting in and out at almost exactly the right moment, with very little room for the trade to be "roughly right."
| Style | Holding Period | Trades per Day |
|---|---|---|
| Scalping | Seconds to a few minutes | Very high — often dozens |
| Intraday | Minutes to hours, same day | A handful |
| Swing Trading | A few days to a few weeks | Occasional, based on setups |
Since each scalp targets such a small price move, transaction costs eat up a disproportionately large share of the profit compared to slower trading styles.
For example: if a scalp targets a 0.1% move and brokerage plus STT plus other charges together amount to roughly 0.05% of the trade value round-trip, half of the intended profit is already gone to costs before the trade even needs to be "right." A trader making 25 such trades a day needs a meaningfully higher win rate just to stay net profitable, purely because of how much of each small gain gets consumed by fees.
Scalping requires split-second decision-making, a fast and reliable trading platform, tight spreads, and the ability to execute a stop-loss instantly without hesitation — a delay of even a few seconds can turn a small planned loss into a much larger one. It also demands full, uninterrupted attention for the entire session, since a scalper can't step away from the screen the way a swing trader or investor can. This combination of speed, discipline, and constant focus is why scalping is generally considered one of the most demanding trading styles, not one to casually try without preparation.
Key Takeaway: Scalping targets very small price moves over seconds to minutes, repeated many times a session, and sits at the extreme fast end of trading styles — faster than intraday, far faster than swing trading. Because each target is so small, transaction costs consume a much larger share of profits than in slower styles, and the speed required for entries, exits, and stop-losses makes it one of the most demanding approaches to master, generally unsuitable as a first trading style for beginners.
Yes, scalping is a legitimate trading style using standard intraday orders — it's not restricted, but it does require a broker and platform that can support fast execution.
There's no fixed minimum, but since scalping relies on small percentage moves, a very small capital base may not generate meaningful absolute profit after transaction costs — this is worth thinking through before starting.
Often yes, since scalping is a form of intraday trading and typically qualifies for the same margin/leverage offered by brokers — which means the same amplified-risk considerations apply.
Scalpers generally prefer highly liquid stocks with tight bid-ask spreads and high trading volume, since illiquid stocks make it harder to enter and exit quickly at the expected price.
Like other intraday trading, scalping gains are generally treated as speculative business income rather than capital gains — it's worth consulting a tax professional given how transaction-heavy this style is.
It's generally not recommended — the speed and precision scalping demands are usually built up through experience with slower styles like swing trading first, rather than learned from scratch under scalping's tight time pressure.
Disclaimer: This article is for general educational purposes only and does not constitute personalized financial, investment, tax, or legal advice. Figures, rates, and rules mentioned may change over time — verify current details with an official source or a qualified professional before making financial decisions.