Scalping

What it is

Capturing small price moves on the 1-5 minute timeframe.

Scalping describes attempts to capture small changes over short intervals. Because the intended price change is small, a spread, fee or execution delay can form a large part of the result. A two-tick cost is 20% of a ten-tick gross target, but that ratio does not establish expected profit: win frequency, adverse outcomes and all costs would also be needed.

Market conditions that matter

Liquidity and spreads vary by venue, instrument, session and event. A small spread observed in one period is not a permanent property or a reliable profit opportunity. Compare observations over stated dates rather than assign universally favorable trading hours.

Study context

A study of how spreads, fees and latency affect short-horizon calculations; not a suitability recommendation.

Limitations

Simplified fills and generated candles do not reproduce order-book priority, partial fills or intraday liquidity.

The steps

• Choose one instrument and explicitly fictional entry, exit and cost inputs for a short-horizon worksheet.
• State the chart interval and whether the observations are provider history or generated practice candles.
• Calculate the effect of a worse fill and a wider spread before comparing gains and losses.
• Record all selected cases, including unfavorable ones. TradeHQ supports manual market orders; planned stops are worksheet assumptions.

Worked example

Hypothetical one-BTC worksheet: buy at $95,120 and compare exits at $95,210 and $95,080. Before costs, these are a $90 gain and a $40 loss. At TradeHQ's 0.1% fee on each side, the entry fee is $95.12. Selling at $95,210 adds a $95.21 fee, turning the gross gain into a $100.33 net loss. Selling at $95,080 adds a $95.08 fee, making the net loss $230.20. The exit prices are assumptions, not resting stop or target orders; a real fill can differ.

The numbers behind it

For the same one-BTC example, cash paid is $95,120 × 1.001 = $95,215.12. Net sale proceeds at $95,210 are $95,210 × 0.999 = $95,114.79, so the round-trip result is −$100.33. The fee-only break-even exit solves exit price × 0.999 = $95,215.12, or approximately $95,310.43 before any additional costs. A higher assumed win rate cannot make this selected $95,210 exit profitable after those fees. These are hypothetical prices, not a return forecast.

How it fails

• Comparing a gross target with a result after fees as if they were the same measure.
• Treating a generated candle as evidence of an actual order-book fill.
• Changing size or exit assumptions after seeing the result and combining the changed rule with the original sample.

Scope and source limitations

No universal win rate applies. Track your own simulated win rate, payoff ratio, costs and drawdown over a sufficiently large sample.

Educational simulation only — not financial advice.