Trading fees

There are fees related to day trading whenever you open and shut an edge . They include the broker's commission and therefore the spread, which is that the difference between the buy price and therefore the sell price of the instrument being traded.

Scalping being a more active sort of trading than day trading and swing trading, it's therefore costlier because you're taking more positions and thus pay more commissions.

For example, each day trader can earn 50 pips on one position and pay 1 pip in commission + spread. which provides him a net gain of 49 pips. At an equivalent time, a scalper can take 10 positions that he wins 5 pips whenever . except for each position he also pays 1 pip of commission + spread. which provides him a net gain of 40 pips.

Thus, the more active the design of trading, the costlier it becomes.

Liquidity

Liquidity is that the ease with which market participants can open or close an edge without the danger of slippage (you are going to be assigned a special price than your order). A liquid market may be a market where it's easy to shop for and sell. the main currency pairs (EUR / USD, GBP / USD, USD / JPY, etc.) are for instance very liquid instruments. Such markets are favorable for scalping because the scalper needs fast and precise execution.

However, an illiquid market are often difficult to quotex . generally , the spread on an illiquid instrument is comparatively wide, thus not allowing scalping. Exotic currency pairs, for instance , are illiquid compared to major currency pairs.

Volatility

We can define volatility because the nervousness of the market. For an instrument, it's the measure of the amplitude of the worth movement, over a given interval . Volatility may be a key element for the scalper.

In general, opinions are divided when it involves volatility. Some scalpers prefer high volatility, others prefer a rather calm market. the upper the volatility, the better it becomes to hide trading costs. this is often why most traders recommend scalping during active market hours (start of European session and begin folks session).

However, a relaxed market can represent huge opportunities. The market is more predictable when volatility is low, like during the Asian session for major currency pairs.