Scalping
A trading style focused on capturing very small price movements by opening and closing positions within seconds to minutes, often involving high trade frequency.
What is Scalping?
Scalping is a high-frequency trading style where traders take many small trades, each targeting a few pips or ticks of profit. Positions are typically held for seconds to a few minutes.
Why prop firms have mixed policies
- Simulated environment concern: Very fast scalps can exploit differences between the simulated spread/execution in the challenge environment and live market conditions
- Toxic flow concern: Extreme scalping strategies can be hard to hedge on live accounts
- Risk management: Very short hold times can mask strategy quality
What is typically restricted
- Minimum hold time rules: Some firms require positions to be held for at least 1–5 minutes
- No-HFT rules: Banning strategies that open/close positions in under 1 second
Scalping in futures
Futures prop firms (like Topstep and Apex) generally have more flexible policies on scalping because futures markets have centralised exchange execution with transparent, fixed spreads.
How Firms Apply This Rule
FTMO: scalping allowed with some restrictions. Funding Pips: scalping friendly. Topstep (futures): scalping permitted. Always check the firm's minimum hold time rule.
Related Terms
News Trading
A strategy of trading around high-impact economic news events. Many prop firms restrict or ban it due to extreme volatility and slippage risks.
Expert Advisor (EA)
An automated trading script (bot) running on MetaTrader 4 or 5 that executes trades based on pre-programmed rules without manual intervention.