What is Scalping?

Scalping in trading, whether it’s Forex or CFDs, refers to a style of trading where investors enter a position for a very short time frame.

What is scalping?

The definition of scalping differs to the industry and the context the word is used in. Just like scalpers who resell concert or sporting tickets at a large or quick profit, the term can be applied to forex trading. Scalping in trading, whether it’s forex or CFDs, refers to a style of trading where investors enter a position for a very short time frame. Traders may enter a position for as little as a few minutes before liquidating once the price or value rises by a few pips. Some scalpers will open the position for only a minute, while others keep the position open for up to 5 minutes or more.

Why is scalping used?

The strategy is aimed at reducing risk and reducing potential losses. But at the same time, any profits made from a trade will be significantly smaller. Scalpers rely on small and frequent gains, opposed to buy/sell and holding strategies used within swing trading. In order to make a noticeable profit, traders must be patient, allowing small positions to accumulate over time. Scalping requires more attention than long-term trading due to the frequency and faster time frames involved. An individual’s accuracy and speed when entering and exiting the market also contributes to profitability. Whether it’s scalping or another method of trading, investors are still vulnerable to losses if the market doesn’t move in their favour.

Is scalping allowed?

Scalping is a popular trading method used by many investors across different markets. As long as traders are speculating on price changes, and not manipulating the market, scalping is permissible with EightCap.



Level 6, 360 Collins Street
Melbourne, VIC
3000 Australia

Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with EightCap, and seek independent advice if necessary. Forex and CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing substantially more than your initial investment). A Product Disclosure Statement (PDS) and a Financial Services Guide (FSG) for our products are available to download from our Legal Documentation page. You must assess and consider them carefully before making any decision about using our products or services.

EightCap is a registered business name of EightCap Pty Ltd (ABN 73 139 495 944). We are regulated by the Australian Securities & Investments Commission (ASIC) - our AFSL number is 391441. This licence authorises us to provide financial services to people in Australia.

The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.