Stock Market · Trading Systems

Scalping

Scalping is the practice of taking many tiny trades for small profits per trade, often holding positions for seconds to minutes. It's the high-frequency end of retail trading, and the most expensive way to participate.

What scalping looks like

• Hold time: 30 seconds to 5 minutes
• Profit target: ₹1-5 per share, or 0.1-0.5%
• Stop loss: similar magnitude
• Trades per day: 20-100+

The promise

If you can make ₹0.50 per share on 50 trades per day, that's ₹25 per share daily. ₹25,000 per day on a 1,000-share position. Sounds amazing on paper.

The brutal reality

1. Costs eat the edge: brokerage + STT + GST + slippage = ₹50-100 per round-trip even at discount brokers. On a ₹0.50/share target, this destroys the strategy.

2. Slippage and spread: market makers fill you at worse prices than mid. On illiquid names, this alone destroys profitability.

3. Speed: institutional algos respond in milliseconds. Retail mouse-click latency is 200-500ms. You're competing on a battlefield where you'll always be late.

4. Cognitive load: 50 decisions per day is unsustainable. Quality of each decision degrades rapidly.

> Scalping is one of the LEAST viable strategies for retail. Yet it's heavily marketed because it generates massive volume, and broker commissions.

Where scalping marginally works

• Highly liquid instruments (Nifty futures, Bank Nifty futures)
• Discount brokers with sub-₹20 brokerage
• Trader has 5+ years of experience and razor-sharp execution
• Daily volume well below the institutional algorithmic threshold

Better alternatives

Same effort, more sustainable: swing trading (multi-day hold), positional trading (multi-week hold). Lower cognitive load, lower costs, higher win quality.

Takeaway. Scalping (30-second to 5-minute trades for tiny profits) is heavily marketed but rarely profitable for retail. Costs, slippage, and institutional algos make it unsustainable for most. Swing or positional trading is almost always better for retail.