Scalp Trading Overview
Status: Scaffolded - Content pending Last Updated: 2025-12-11
What Is Scalp Trading?
Scalping is the fastest trading style — you're in and out within minutes. The goal is to capture small price movements repeatedly.
Typical Trade Duration: 15-30 minutes max
Key Characteristics
| Aspect | Scalp Setting |
|---|---|
| Timeframe | 1-minute bars |
| Lookback | 2 days only |
| Bars Shown to AI | 20 bars |
| RSI Window | 9 (fast) |
| EMAs | 9 only |
| SMAs | None (too slow) |
| MACD | Yes |
Why these settings?
- 2 days of data = focus on TODAY's price action
- 9-period indicators = react quickly to changes
- No SMAs = moving averages lag too much for minute-by-minute decisions
Stop Loss & Target Rules
| Element | Scalp Range |
|---|---|
| Stop Loss | Guardrail: typically $0.50 to $1.00 below entry (STOCKS). Stop should be anchored to support/resistance + volatility. |
| Target 1 | $1.00 to $1.50 above entry (exit 50%) |
| Target 2 | $2.00 to $2.50 above entry (exit remaining 50%) |
| Time Stop | 15-30 minutes max |
If neither target nor stop is hit within time stop → Exit at market.
When to Scalp
Good Conditions:
- High volatility with clear direction
- Strong volume at open
- Clear support/resistance levels within range
- Trending market (not choppy)
Avoid Scalping:
- Lunch hour (12-1 PM ET) for small caps
- Low volume periods
- Major news imminent
- Wide bid-ask spreads
Asset Types for Scalping
| Asset | Scalp Support | Notes |
|---|---|---|
| Equities | ✅ Full | Standard scalp approach |
| Options | ✅ Full | Targets 0DTE when available; otherwise nearest expiration + flag it |
| Futures | ⚠️ Limited | Price action + volume + session context |
| Crypto | ✅ Full | 24/7 market, hour-based time stops |
Scalp-Specific Risks
- Slippage — Fast moves = worse fills
- Overtrading — Many small losses add up
- Commission Impact — Frequent trades = higher costs
- Pattern Day Trader Rule — 4+ day trades/week requires $25K