scalp trading
Scalp trading means buying and selling shares many times in one day to grab tiny profits from small price moves, again and again.
In plain English
At Mile 12 market, there is a woman who buys pepper by the basket at dawn and sells it off in small heaps before nine in the morning, moving on price differences of maybe ₦20 or ₦30 a heap, but doing it hundreds of times before the sun gets too hot to bear.
She is not waiting for pepper to become expensive next week. She wants her small small profit now, fast, and then she wants to do it again with the next basket.
Scalp trading on the stock market works the same way. A trader watching Zenith Bank shares on the NGX might buy at ₦38.50 in the morning and sell at ₦38.70 twenty minutes later, then buy again when the price dips slightly and sell again when it ticks up.
Each trade earns almost nothing on its own, sometimes just a few kobo per share, but the trader is doing this ten, twenty, fifty times a day, and the small amounts add up if the timing is right.
This is different from someone who buys MTN shares and holds them for three years hoping the company grows. The scalper does not care about MTN's five year plan. They care about the next fifteen minutes.
In London, a trader glued to screens showing FTSE 100 movements might scalp Lloyds Bank shares the same way, in and out several times before lunch, chasing pennies rather than pounds.
A trader buys 5,000 shares of Access Holdings at ₦22.00, spending ₦110,000. Twelve minutes later the price moves to ₦22.15 and they sell, pocketing ₦750 before charges. They repeat this pattern many times through the trading day.
Questions people ask
Is scalp trading profitable for an ordinary Nigerian investor?
It can be, but it demands constant attention, quick decisions, and money you can afford to risk, because transaction charges and taxes eat into those small profits fast. Most people with a full time job find it hard to scalp trade well since it needs your eyes on the screen most of the day.
How is scalp trading different from day trading?
Day trading also closes positions before the market shuts, but a day trader might hold a stock for hours chasing a bigger move. A scalper holds for minutes, sometimes seconds, chasing tiny moves repeatedly.
Do I need special tools to scalp trade on the NGX?
You need a broker with fast order execution, low fees, and real time price feeds, because delays of even a few seconds can turn a planned profit into a loss when you are working with such thin margins.
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