Scalpers profit from tiny price movements and the bid-ask spread. Excellent timing and prompt execution are key to successful scalping. Scalpers think that taking profits quickly limits the risk.
Scalpers like high volume stocks because they can enter and exit quickly. Some investors try to avoid penny stocks. However, scalpers aren’t concerned about power or penny stocks as long as they see an opportunity and the target stock offers the liquidity they want. Scalpers follow current news and assess future events to gauge stocks that can make them money.
For scalping to be rewarding, traders look for commission-free brokers because transaction costs can erase any scalping profits made. Scalpers seek direct market access to be able to capitalize on the bid-ask spread. Also, scalping requires sophisticated trading tools to be able to execute trades in the blink of an eye. Robinhood, despite offering commission-free trading, may not be useful to investors seeking to apply the scalping trading method.
View more information: https://marketrealist.com/p/what-is-scalping-in-trading/