Scalping (trading)

Arbitrage or market manipulation Scalping, when used in reference to trading in securities, commodities and foreign exchange, may refer to either a legitimate method of arbitrage of small price gaps created by the bid–ask spread, or a fraudulent form of market manipulation. Arbitrage Scalping, in the arbitrage sense, is a type of trading in which traders try to open and close positions in very short periods of time in markets such as foreign exchange and securities, with the aim of making a small profit from the trades. How scalping works Scalping is the shortest time frame in trading and it exploits small changes in currency prices. Scalpers attempt to act like traditional market makers or specialists. To make the spread means to buy at the Bid price and sell at the Ask price, in order to gain the bid/ask difference. This procedure allows for profit even when the bid and ask don't move at all, as long as there are traders who are willing to take market prices. It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. The role of a scalper is actually the role of market makers or specialists who are to maintain the liquidity and