An Example Of A Scalping Trade.
A scalper finds a broker with an average spread of 1 pip for the EUR/USD, JPY/USD, and GBP/USD pairs. The pairs currently sit at 1.0124, 1.0431, and 1.9321 respectively.
He proceeds to open 350 orders from 8am to 12pm, and sets a trailing stop for 2 pips and a sell limit order for 1.0130 (EUR/USD), 1.0437 (JPY/USD), and 1.9327 (GBP/USD).
At the end of the session, he loses 200 trades and wins 150—a fairly noticeable difference.
However, he has made 900 pips and lost 400, plus a total cost of 350 pips in spreads. This ends up being 900 pips made against 750 spent, which equals a total profit of 150 pips in two hours, all because of keeping losses tight with stop-loss orders and ensuring the sell limits make up for the possibly lost trades.
Please note the importance of using stops to make the trades as predictable as possible, and the importance of choosing the lowest spreads possible.