Is Scalping Allowed?

[Jack Harris]

I'm just wondering if scalping is accepted by brokers. I've been spread betting on the indicies by either buying or selling at a spike, then making about £1 profit when it reverses about 10 seconds later.

I've heard that scalping is frowned upon, but I've also heard that some brokers do not accept this. Is this the case?

 

[x4x]

Not sure if you are referring to brokers or spread betters, but FXCM provide both and claim to have no problem with scalpers. CMC provide spread betting and they too are happy to accept scalping clients. But having said that, these two companies probably have the worst reputation out there, so you may have to put up with some downside:

CMC: Slow fills and slipped stops.

FXCM: Spikes and prices that seem to come from outer space, and super wide spreads.

None of which are very conducive to scalping.

 

[Jack Harris]

Not sure if you are referring to brokers or spread betters, but FXCM provide both and claim to have no problem with scalpers. CMC provide spread betting and they too are happy to accept scalping clients. But having said that, these two companies probably have the worst reputation out there, so you may have to put up with some downside:

CMC: Slow fills and slipped stops.

FXCM: Spikes and prices that seem to come from outer space, and super wide spreads.

None of which are very conducive to scalping.

Yeah, I meant spread betting and I'm currently with CMC, so that's convenient. Which Spread Betters would you recommend? Obviously, switching would mean finding a different strategy, so I'll have to weigh up the pros and cons of each.

 

[x4x]

Yeah, I meant spread betting and I'm currently with CMC, so that's convenient. Which Spread Betters would you recommend? Obviously, switching would mean finding a different strategy, so I'll have to weigh up the pros and cons of each.

You are probably best sticking with either of the two big ones, IG or Capital. I have never tried Capital, but by all accounts they offer the best (fixed) spreads and very fair pricing. There is also a Capital thread here on T2W - supported by the CEO of Capital, which must say a lot about his credibility.

 

[Jack Harris]

Thanks for the help! I'll look into those two companies.

 

[timsk]

Hi Jack,
Welcome to T2W.

It would be wrong for me to say categorically that 'scalping' with a SB firm can't be done but, with little doubt, it's going to make a tough job tougher still. There's truck loads of threads on SB firms on here and, if you're seriously thinking of giving this a go, it would pay you to set aside an afternoon and read around the topic thoroughly. Check out the relevant threads in the Trading FAQ forum while you're about it. The key point to keep in mind when using a SB firm is that you're not trading the actual share or futures contract etc. You're trading something that the SB firm's own computer algorythms have generated. Technically, a spread bet is not even a true derivative product, such as the ES e-mini future which is a derivative of the S&P 500 equity index. Broadly speaking, the later will always move in tandem with the underlying, while the former doesn't have to. That's because it's a construct created by the SB firms themselves. I'm not going to get into all the usual circular arguments about what happens when the clients of SB actually manage to make money scalping, as you can read about then ad nauseum on here and elsewhere. All I would say is to put yourself in the shoes of the SB firm. If you had a client who consistently makes money and you don't have an opportunity to hedge against their trades (because of the speed of the transactions) - how would you feel and what would you do?

IMO, if you think you want to trade this way, you'd be well advised to gravitate to a direct market access broker and trade actual shares or futures etc. That way, if you are good at it and make money consistently, your broker will be your new best friend and your commissions should reduce as your trade size and account builds. You won't have any worries about the person on the other side of your trade because it's me - or the prop trader down the road - or whoever. The important thing is it's not your 'broker'.

Needless to say, if you're just doing this for a bit of fun of an evening, trading a few pence or few quid at most - then you're probably fine to carry on as you are. You might make a bit, lose a bit; either way, it's no skin off anyone's nose.

Good luck with it!
Tim.

 

[Bint_Crusher]

Brokers love you to scalp, it means lots of trades therefore lots of commissions. According to the BBC they are your BITCHES so don't be too bothered about what they think.

 

[x4x]

Brokers love you to scalp, it means lots of trades therefore lots of commissions. According to the BBC they are your BITCHES so don't be too bothered about what they think.

Most brokers don't like scalpers - they will put you on dealer intervention to stop you from scalping.

 

[wallstreetwarrior87]

Most brokers don't like scalpers - they will put you on dealer intervention to stop you from scalping.

Why???? Who told you that????

 

[Kitchen Sink]

Scalping is for retarded monkeys only....FACT.

 

[x4x]

Why???? Who told you that????

WHY???? - because most brokers don't like it.

WHO TOLD YOU THAT???? - no one - I've experienced it.

 

[amacky]

Not sure if you are referring to brokers or spread betters, but FXCM provide both and claim to have no problem with scalpers. CMC provide spread betting and they too are happy to accept scalping clients. But having said that, these two companies probably have the worst reputation out there, so you may have to put up with some downside:

CMC: Slow fills and slipped stops.

FXCM: Spikes and prices that seem to come from outer space, and super wide spreads.

None of which are very conducive to scalping.

From my personal experience with FXCM they seem to invent their asking prices as they go and I suffered a large amount of losses by stops based on 5pips spread when all day they quote 1pip on my screen and no limit execution again on 3-4 pips spread while my screen show 2pips, they also work their stop loss and limit order on their own quote irrelevant of the actual market action.

 

[new_trader]

I'm just wondering if scalping is accepted by brokers. I've been spread betting on the indicies by either buying or selling at a spike, then making about £1 profit when it reverses about 10 seconds later.

I've heard that scalping is frowned upon, but I've also heard that some brokers do not accept this. Is this the case?

If you're doing it then you've answered your own question haven't you? Most people here are spred-bettas who haven't got the foggiest idea what scalping is so all you are getting is muddled opinions.

 

[x4x]

If you're doing it then you've answered your own question haven't you? Most people here are spred-bettas who haven't got the foggiest idea what scalping is so all you are getting is muddled opinions.

Why does someone who spread bets have a muddled opinion - that's about as ridiculous a statement as any I've ever read on T2W - well done!

It doesn't matter what you, I or anyone else thinks what the definition of scalping is - what matters is how the SB providers define scalping - and they generally consider scalping a trade that lasts less than 2 minutes, perhaps taking advantage of a pricing lag, making it difficult or impossible to balance their book - and that's why they don't like it - and that's why they slow you down by putting you on dealer intervention.

I understand you like to consider yourself an elite trader, but don't knock us spread betters.

 

[x4x]

Scalping is for retarded monkeys only....FACT.

That's a FACT is it - take a look at this retarded monkey

The forexbird

,,,,but if he is in FACT a retarded monkey I can't imagine what that makes you!!

 

[new_trader]

Why does someone who spread bets have a muddled opinion - that's about as ridiculous a statement as any I've ever read on T2W - well done!

It doesn't matter what you, I or anyone else thinks what the definition of scalping is - what matters is how the SB providers define scalping - and they generally consider scalping a trade that lasts less than 2 minutes, perhaps taking advantage of a pricing lag, making it difficult or impossible to balance their book - and that's why they don't like it - and that's why they slow you down by putting you on dealer intervention.

I understand you like to consider yourself an elite trader, but don't knock us spread betters.

You say this as if it is a fact when what you are doing is inferring from experience, as you stated earlier. Hence why I say a muddled opinion. If you have no experience with DMA then you have no frame of reference and hence have no idea what they are doing...you are only guessing.

 

[wackypete2]

Scalping is for retarded monkeys only....FACT.

I'll take that as a compliment

Peter

 

[x4x]

You say this as if it is a fact when what you are doing is inferring from experience, as you stated earlier. Hence why I say a muddled opinion. If you have no experience with DMA then you have no frame of reference and hence have no idea what they are doing...you are only guessing.

I'm not guessing - you are assuming - wrongly.

 

[new_trader]

I'm not guessing - you are assuming - wrongly.

Sure, how can I argue, you've tried every spread-betting broker and have undeniable evidence (your experience) that spread-betting brokers don't like scalpers. How can anyone argue with that...your experience...Losing trades you were convinced should have been a winners...I mean the charts, the pretty coloured lines, everything was in place and yet your dastardly broker scuppered your effort to make millions...

 

[x4x]

Sure, how can I argue, you've tried every spread-betting broker and have undeniable evidence (your experience) that spread-betting brokers don't like scalpers. How can anyone argue with that...your experience...Losing trades you were convinced should have been a winners...I mean the charts, the pretty coloured lines, everything was in place and yet your dastardly broker scuppered your effort to make millions...

OK, if it makes you feel better, they love scalpers and never put them on dealer intervention - happy now?