Scalping in Forex

If you think that you have the heart to make split second decisions, countless times a day than scalping may be perfect for you.

Scalping at its core is very similar to day trading, only done at an even more frenetic pace. The aim of scalping is to try and “skim” small amounts of profit several times a day by going into and out of positions. While with both day trading and scalping you will never hold a position overnight, with scalping you may be opening and closing hundreds of trades a day hoping to gain as little as 5 basis points each trade. Analysing tick charts and one-minute charts, scalpers aim to try and catch volatile movements in the markets caused by the release of economic data, news stories, financial figures and whatever else they have at their disposal to try and pre-empt movements in the market.

Compare share-trading options

Table: sorted by promoted deals first
Name Product Price per trade Frequent trader rate Platform fees Brand description
eToro Free Stocks
£0
N/A
£0
Capital at risk. 0% commission but other fees may apply. The minimum deposit with eToro is $200.
Hargreaves Lansdown Fund and Share Account
£11.95
£5.95
£0
Hargreaves Lansdown is the UK's number one platform for private investors, with the depth of features you'd expect from an established platform. The minimum deposit with HL is £1. Capital at risk.
Degiro Share Dealing
UK: £1.75 + 0.014% (max £5)
US: €0.50 + $0.004 per share
N/A
£0
Degiro is widely seen as one of the best low-cost share brokers, for people who are looking to trade regularly. The minimum deposit with Degiro is £0. Capital at risk.
interactive investor Trading Account
£7.99 (with one free trade per month)
N/A
£9.99 per month
Interactive Investor offers everything most investors need. Its flat fees makes it pricey for small portfolios, but cheap for big ones. The minimum deposit with ii is £0. Capital at risk.
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Name Product Minimum deposit Maximum annual fee Price per trade Brand description
InvestEngine stocks and shares ISA
£100
0.25%
£0
Offer - £50 welcome bonus for new customers. Subject to minimum investment. T&Cs apply. Capital at risk.
Moneybox stocks and shares ISA
£1
0.45% and £1 monthly subscription fee (free for first 3 months)
£0
Moneybox offers a smart and simple way to invest. Sign up in minutes and start investing with £1 via their award-winning app. Capital at risk.
interactive investor stocks and shares ISA
Any lump sum or £25 a month
£119.88
£7.99
Interactive Investor offers everything most investors need. Its flat fees makes it pricey for small portfolios, but cheap for big ones. Capital at risk.
Nutmeg stocks and shares ISA
£100
0.75%
N/A
Nutmeg offers three types of portfolios. Choose the one that goes with your investment style. Capital at risk.
Hargreaves Lansdown stocks and shares ISA
£100
0.45%
£11.95
Hargreaves Lansdown is the UK's biggest wealth manager. It's got everything you'll need, from beginners to experienced investors. Capital at risk.
Moneyfarm stocks and shares ISA
£1500
0.75%
£0
Moneyfarm helps you meet your investment goals with fully-managed portfolios designed around you. Capital at risk.
Fidelity Stocks and Shares ISA
£1000 or a regular savings plan from £50
0.35%
£10.00
Fidelity is another good all-rounder, offering a good package at a decent price. Not suited for trading shares. Capital at risk.
Legal & General stocks and shares ISA
Legal & General stocks and shares ISA
£100 or £20 a month
0.61%
N/A
Legal & General is a big financial services company which offers insurance, lifetime mortgage, pensions and stocks and shares ISAs. Capital at risk.
AJ Bell Stocks and Shares ISA
£500
0.25%
£9.95
AJ Bell is a good all-rounder for people who to choose between shares, funds, ISAs and pensions. Capital at risk.
Saxo Markets stocks and shares ISA
No minimum deposit requirement
0.12%
£8.00
Saxo Markets offers a wide access to a range of stocks, ETFs and funds. Capital at risk.
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Name Product Minimum investment Choose from Fee for a £50,000 pension pot Brand description
Interactive Investor Pension
Any lump sum or £25 a month
Over 3,000 funds
Annual fee: £239.88, fund fees: £50-500
interactive investor is a flat-fee platform, which makes it cost effective for larger portfolios. Capital at risk.
Moneyfarm Pension
£1,500 (initial investment)
7 funds
0.35%-0.75%
Moneyfarm has pensions that are matched against your risk appetite, goals and planned retirement date. Capital at risk.
AJ Bell Pension
£1,000
Over 2,000 funds
Annual fee: £125, includes fund fees
AJ Bell has two different pension options, a self managed pension and one that is managed for you. Capital at risk.
PensionBee Pension
No minimum
9 funds
Annual fee: £250-475, includes fund fees
Pension Bee is a newbie in the pension market. It helps consolidate your pension plans into one place. Capital at risk.
Hargreaves Lansdown Pension
£100 or £25 a month
2,500 funds
Annual fee: £225 (£200 cap if holding shares), fund fees included
Hargreaves Lansdown is the UK's biggest wealth manager. It's got three different retirement options. Capital at risk.
Saxo Markets Pension
Saxo Markets Pension
£10
Over 11,000 funds
No annual fee
Saxo Markets gives flexibility and control over your investment strategy. Capital at risk.
Penfold
Penfold
No minimum
4 portfolios
Annual fee: £375-455, fund fees included
Moneybox Pension
£1
3 funds
Annual fee: £225, fund fee: £60
Manage your money with an easy-to-use Moneybox app. Capital at risk.
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

Why Scalp?

Even though scalpers close trades when they have only gained 5 – 10 basis points, it can be extremely profitable due to the sheer number of trades they make and the leverage that they have when making them. If a pips value is £10 and you’re making a 5 – 10 pips each trade and you then repeat this hundreds of times a day you can start making serious profits from this process. Not every trade will be profitable and as a scalper you need to be prepared to cut your loses short as soon as you see the trade losing 2 – 3 pips without having time to fully analyse the decision.

What makes a scalper

Due to the high pressure involved with being a scalper it is a type of trading only cut out for certain personalities. If you are happy to spend hours in front of a screen, constantly switched on, monitoring data coming onto your screen than you may enjoy scalping. This fast pace trading is perfect for those who enjoy fast trading and excitement and are able to make quick decisions without taking time to assess all the implications and information behind it. If you’re someone who is easily stressed, or likes an overview of a market and delving into the facts and figures before making a decision than you should probably steer clear of scalping.

Where to trade

As a scalper you want to trade on the most active markets available and therefore Forex markets are perfect for this, with the most traded 3 currency pairs being; EUR/USD, USD/JPY and GDP/USD. As a result, the best times to trade are when the both London and New York are trading as these are the most active Forex locations. When looking for a broker to trade through remember that ideally for scalping you should be looking for the platforms who offer the lowest spreads and the lowest commissions because with the low profit margins, the higher these are the more risk you are running with each trade. Always practice on a test account before investing any money into it. Having an understanding of how the system works is crucial, as, with such little time to make decisions, even a small error could prove costly.

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