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Scalp Trading Stocks For A Living

Scalp trading is a quick in and out style of trading by which traders trade stock within a time frame of seconds to minutes transacting a lot of trades during the day. Although your goal will be for gains of only 1 or 2 cents per transaction/trade, when you consider the high volume of shares you will be executing, the profits can add up nicely. In addition, you can still make a profit even if your trade ends up flat. Why? Because if you add liquidity to the market, the ECN will rebate back to you a portion of the trade. Focusing on this alone can generate a good income. In short, scalp traders trade in between the bid-ask spread. They buy a stock on the bid then right way sell at the ask. Because this method of trading does better with low priced stocks that don’t move much, scalp traders build their account by transacting large volume. Scalp trading has no homerun profits, yet there are lesser not being profitable and so it is a safer method of trading the stock market. However, scalp trading is not easily done. There are tools that are necessary and you must have discounted commission rates. It requires deeply discounted scalp trading rates and privelaged access to the NYSE floor. Both of which you would have a hard time finding at most discounted brokers. So how can you do this? There are proprietary trading firms that accept you as an experienced trader. And if you are not, you will need to find a proprietary trading firm that will educate you.

Looking for the right proprietary trading firm is about locating a firm that allows you to trade their money and offer very low trading rates. Most prop trading firms will let you join their group with deposits as low as $5,000. With that,For that, they will let you trade with $100,000 or more if you have a profitable track record. It’s not unusual for a proprietary trading firm to take risk deposits of $10,000 and provide you with the ability to trade with $300,000 but you must know that they will want a percentage of your profits. Many will take 10 to 50% but that will depend on your experience. The more profitable you are, the less they will require.

An important point to consider when looking for a prop trading firm for your scalp trading method will be transaction cost and order routing advantages offered. Ask them how many floor routes they have access to and if they can assign personal access to a floor specialist. Many proprietary trading firms will do this if you are a large volume trader. Next, see what their commission rates are. Ideally, you want to find a firm that will charge .0005 to .0007 per share. On a 3,000 share trade, that would be 1.50 to 2.10 dollars per roundtrip trade; much better than your $8.95 per trade rate at Scottrade. Also make sure that they pass the rebates back to you because as you will learn, the rebate is just as important to profitable scalp trading.

Many courses are available that instruct the the specifics of scalp trading. Become educated so you don’t trade uninformed. Furthermore, if you are looking for a place to trade, the proprietary trading firm below offers the above rates, direct access to the floor and a solid training program. Successful trading.

Article Source: http://www.ezinearticles.mk

Anthony is the COO of the Affinity Trading Group. Affinity is most know for their trading seminars that range from 2-day online courses to live hands on 5-day trading labs. One of their newest currency trading events is the forex trading course that teaches Ichimoku.

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