An intraday trading style of taking many rapid, small-profit trades within seconds to minutes to capture tiny price movements.
Scalping is a high-frequency intraday trading style where a trader enters and exits positions within a very short window, often seconds to a few minutes, aiming to capture small price movements repeated many times over a session rather than waiting for one large move. In Indian F&O markets, scalpers typically operate in the most liquid instruments, such as Nifty and Bank Nifty futures or near-the-money weekly options, where tight spreads and deep order books allow quick entry and exit without significant slippage.
Because each individual trade targets only a small tick move, scalping depends heavily on leverage and volume rather than on any single trade’s size, and it requires constant screen attention, fast order placement, and low-latency execution, many scalpers use hotkeys or algo-assisted order entry to react within a fraction of a second to price ticks on the order book or a five-second chart.
Risk management in scalping is unusually tight compared to swing or positional trading. A scalper typically defines a very small stop-loss in absolute points, often using a trailing stop-loss to lock in gains the moment a trade moves favourably, and consistently evaluates each setup against a strict risk-reward ratio so that a string of small losses doesn’t outweigh the frequent small wins the strategy depends on.
Transaction costs matter disproportionately to scalpers because profits per trade are small. The bid-ask spread alone can consume a meaningful share of a scalped trade’s target profit, and brokerage plus statutory charges like STT add up quickly across dozens of trades a day, which is why serious scalpers usually trade only the most liquid contracts and factor total cost per round trip into their target before entering a position.
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