How to Invest Today

Scalp trading is a extremely quick method of trading where traders trade stock in a frame of time from seconds to minutes executing a lot of transactions during the day. Even though you will be looking for profits of only 1 or 2 pennies per transaction/trade, when you consider the high volume of shares you will be flipping, this can amount to healthy profits. Furthermore, profits can still be had even when your trade breaks even. how come Because when you add liquidity to the market, the ECN will provide you with a rebate. Focusing on this alone can manufacture a nice daily return. In short, scalp traders trade in between the bid-ask spread. They purchase a stock at the bidding price then immediately sell the same position at the asking price. Because this style of trading performs best on equities that are priced low that don’t move much, scalp traders profit by making hundreds of trades. 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. But wait, scalp trading is not easily done.

Low commission rates and the proper tools are an absolute necessity. It requires extremely discounted scalp trading commissions and privileged access to the NYSE floor. Both of which you would have a hard time finding at your E*trade or Scottrade broker. So how can you do this? There are proprietary trading firms that take you on as an experienced professional trader. And if you are not, you will need to find a proprietary trading firm that will educate you.

Looking for a good prop firm is about finding one that provides the ability for you to trade their capital and provide attractive trading fees. Most proprietary trading companies will allow you join them with a risk deposit of only $5,000. With that, they will provide you with $100,000 in buying power or more depending on your experience. It’s not unusual for a proprietary trading firm to take a $10,000 deposit and provide you with buying power of $300,000 but you must know that Prop firms are paid a percentage of your profits. The profit sharing scale can range from you getting 50 to 95% but that will depend on your profitability. The more profitable you are, the less they will ask for.

The most important decision when looking for a prop trading firm for your scalp trading style will be transaction cost and floor access offered. Inquire as to what floor routes they have access to and if they can provide you with personal access to a floor specialist. 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 from .0005 to .0007 per share . On a 2,000 share trade, that would be 1.00 to 1.70 dollars in and out; an improvement over the $8.95 per trade rate at E*Trade. Also make sure that they pass the rebates back to you because as you will learn, the rebate can be an added bonus to profitable scalp trading.

Courses are available that teach the the specifics of scalp trading. Get educated so you don’t trade uninformed. Furthermore, if you are looking for a place to trade, the proprietary trading firm below has deeply discounted rates, good floor routes and scalp trading seminars. Successful trading.

Affinity Trading provides Day Trader education for those seeking to become professional Day Traders. In addition to day trading courses, Affinity also offers a scalp trading program. Visit the website today for more info.