Go to XTB
|Excellent 24-hour customer service. More than 3000 instruments to trade. Regulated broker.(*) Warning: Your capital is at risk. 80% of retail CFD accounts lose money.|
Scalping: Yes, XTB allows scalping.Demo Account: Yes
Minimum Deposit: 0 €/$
Trading Platforms: xStation5, iOS App, Android App.
Execution: Market Maker / STP
Regulation: FCA, CNMV and IFSC
Web Page: https:/www.xtb.com
Go to Pepperstone
|Very low spreads on over 1,200 instruments. 24/7 support, fast execution and no requotes.(*) Warning: Between 74-89 % of retail investor accounts lose money when trading CFDs.|
Scalping: Yes, Pepperstone allows scalping.Demo Account: Yes
Minimum Deposit: 200 €/$
Trading Platforms: MetaTrader 4, MetaTrader 5, cTrader, TradingView.
Execution: STP / NDD
Regulation: FCA, ASIC, CySEC, BaFin, DFSA, CMA and SCB
Web Page: https://www.pepperstone.com
Go to XM Group
|Bonus of $30 without deposit and bonuses of up to $5,000 per deposit. Trade Forex with ultra-low spreads.(*) Clients registered with XM Group's EU-regulated entity do not have access to the bonds.|
Scalping: Yes, XM allows scalping.Demo Account: Yes, unlimited
Minimum Deposit: 5 $
Trading Platforms: MetaTrader 4, MetaTrader 5.
Execution: Market Maker
Regulation: CySEC, FSC and ASIC
Web Page: https://www.xm.com
Go to IC Markets
|True ECN account with ultra-low spreads and ultra-fast execution designed for scalping and automated trading systems.|
Scalping: Yes, IC Markets allows scalping.Demo Account: Yes
Minimum Deposit: 200 $
Trading Platforms: MetaTrader 4, MetaTrader 5, cTrader.
Regulation: ASIC, CySEC and FSA
Web Page: https://www.icmarkets.com
Go to Exness
|Low spreads as low as 0.0 pips. No swaps on most instruments. Instant withdrawals.|
Scalping: Yes, EXNESS allows scalping.Demo Account: Yes
Minimum Deposit: 10 $
Trading Platforms: MetaTrader 4, MetaTrader 5.
Execution: Market Maker / ECN
Regulation: FCA, CySEC, FSCA, FSC, CBCS, FSA and SDL
Web Page: https://www.exness.com
Go to Eightcap
Scalping: Yes, Eightcap allows scalping.Demo Account: Yes
Minimum Deposit: 100 $
Trading Platforms: MetaTrader 4, MetaTrader 5, TradingView.
Execution: STP / ECN
Regulation: ASIC and SCB
Web Page: https://www.eightcap.com
Go to Axi
Scalping: Yes, Axi allows scalping.Demo Account: Yes
Minimum Deposit: 0 €/$
Trading Platforms: MetaTrader 4.
Execution: STP / ECN
Regulation: FCA, ASIC, FSA and DFSA
Web Page: https://www.axi.com
Go to RoboForex
|$30 welcome bonus with a minimum deposit of $10 and bonuses up to $50,000 per deposit.|
Scalping: Yes, RoboForex allows scalping.Demo Account: Yes, unlimited
Minimum Deposit: 0 €/$
Trading Platforms: WebTrader, MetaTrader 4, MetaTrader 5, cTrader, iOS App, Android App.
Execution: STP / ECN
Web Page: https://www.roboforex.com
Go to FP Markets
Scalping: Yes, FP Markets allows scalping.Demo Account: Yes
Minimum Deposit: 100 €/$
Trading Platforms: MetaTrader 4, MetaTrader 5, IRESS.
Regulation: ASIC, CySEC and FSP
Web Page: https://www.fpmarkets.com
Go to OANDA
|Deposit bonus up to $5,000.|
Scalping: Yes, OANDA allows scalping.Demo Account: Yes, unlimited
Minimum Deposit: 0 $
Trading Platforms: MetaTrader 4, MetaTrader 5.
Execution: Market Maker
Regulation: FCA, ASIC, NFA, IIROC, MFSA, BVI FSC
Web Page: https://www.oanda.com
What are the best brokers for scalping?
Scalping is an exciting, intense and electrifying way of dealing with the financial markets. But it has a number of special requirements. We will explain in a simple, point-by-point manner what scalping is, which factors are decisive for success, and which financial instruments are the most suitable. In addition, we will give you the keys to finding and selecting a good broker for scalping.
After having tested and analysed numerous online brokers, the ones you can see in the table above are what we consider to be the best brokers for scalping.
What is Scalping?
In the world of trading and financial investments, the term scalping refers to a trading management style of opening and closing positions in a very short period of time. The trader tries to make small profits from minor market fluctuations by opening and closing positions quickly in the market several times a day.
Scalping trades can last even a few seconds. There is no specific time to determine when scalping ends and when other types of online trading, such as day trading (intraday positions, but with a longer duration) begin. However, as a very general rule, it could be said that a scalping position can last from a few seconds to about ten minutes in most cases.
Traders who carry out this style of trading are called “scalpers“. They use charts with a very short time scale (or time frame) (1 minute or less). Generally, the charts are usually Japanese candlesticks (as they are the most complete and intuitive). Their aim is to make a small profit on each trade, given that, in these time periods, movements in the financial markets are usually very small.
They carry out multiple operations throughout the trading day, depending on the opportunities that the market may offer them. Positions aim to beat the market by a few points. They tend to concentrate most of the time on a single financial asset (a currency, a stock, a commodity, etc.). They have a well-defined trading strategy (which is very important, as we will see shortly) and remain focused at all times.
Scalping is a trading style that requires nerves of steel and iron discipline. The movements of financial assets in such a short space of time are often volatile and activity can become frenetic.
Similarly, day-to-day financial news becomes more relevant to scalping. Traders who follow this type of operation, before starting their day, keep in mind the economic calendar, the news of the day, the times that will be published and its possible impact. It is not advisable to be in the market when a news is published, as it can react violently (unless the trading strategy is precisely to trade based on economic news).
Advantages of Scalping
In addition to the possibility of making profits in a short space of time, scalping has several advantages over other trading styles:
- The exposure to the market is very low: By holding a position for a short period of time, the trader reduces the risk of finding himself with an open position in the event of an unexpected event or news shock.
- Positions are not held for more than one day: “overnight” operations (this is the name given to those that are held from one day to the next) also have a series of disadvantages, starting with the gaps that the financial asset can make when it opens each trading session. In addition, the broker avoids the application of the Swap commission or overnight premium (characteristic of CFDs).
- Small movements occur more frequently: it is not necessary to wait for a long trend to develop, small day-to-day fluctuations can be used to profit.
In addition to this, using a broker for scalping is not at odds with algorithmic trading. A scalper can perfectly well use automatic trading programs or Expert Advisors in the development of his trading activity.
Example: How is a scalping operation executed?
It is very common to develop this style of trading in the Forex market, since there are certain currency pairs that are very active at certain times. This market has well defined movements in the “ultra short term”
A trader who intends to carry out scalping, to open a position must find a clear signal to enter the market (buy or sell), according to the indicators and technical analysis. The variables of analysis are reduced (this is one of the advantages of scalping, as we will see shortly, however, you must have some experience and knowledge of technical analysis).
Attention is maintained at all times, because the market moves very quickly. Everything is ready and the trader has a plan to face the trading day. The economic calendar has been observed and you are aware of what news may alter the price of the asset you are about to trade (and at what time it will occur).
When the time is right, it’s just a matter of a click of the mouse on your online broker’s trading platform and accessing the market. As soon as the expected movement has occurred, you quickly close the position and take your profit. And it’s back to business as usual.
What is a scalping broker?
In order to carry out scalping, one of the first tasks a trader must carry out is to open an account with an online broker. Scalping is usually done through CFDs, as they are a financial product with enough flexibility to open small trades in a quick, easy way (we will see their advantages in more detail later). Therefore, scalping brokers are usually CFD brokers.
A broker is a company dedicated to financial intermediation. Their mission is to carry out trades on behalf of their clients, following the buy and sell orders given to them by their clients. They are a necessary agent for investing in the financial markets (in any term and in any style). Traders cannot access the market directly, it is necessary to have the services of a broker who is able to place their orders in order to find a counterparty.
CFDs offer traders enough agility for scalping, however, not all online CFD brokers allow this style of trading. It is usually the ECN/STP brokers that offer this type of trading.
ECN/STP brokers are financial intermediaries connected to a network of other liquidity providers, brokers and traders (also banks and financial institutions) and place orders in this market.
In contrast, there are Markets Makers brokers. They are so called because they themselves provide the counterparty. When the trader wants to buy, they are the ones who sell; and vice versa. These brokers, by guaranteeing the liquidity of the trades, take the risk and, for the most part, do not allow scalping to their clients (for the most part).
In any case, it is necessary to open an account with a scalping broker or a broker that is suitable for scalping. We will then look at some tips on how to find and select the most suitable broker for a scalper’s needs.
Normally, the scalping broker is the one that offers the trading platform for free. On this platform, the trader can view the markets in real time, perform technical analysis, launch trading orders and manage everything related to capital and risk (such as, for example, managing the balance of the trading account).
Most important factors for successful scalping
Capitalising on market movements on such short time frames is no easy task. It requires testing yourself. It requires full attention and the necessary means. But it is also necessary to keep in mind a number of elements that can determine success or failure.
The scalper is a fast-moving type of trader. This requires adequate computing power as well as a secure internet connection.
A failure in the equipment or in the internet connection can ruin a trade, because there is hardly any time to let it evolve. In addition, if you are not agile enough in launching orders, they may be executed later than planned. The consequences would be as follows:
- Trading opportunities will be missed.
- The market may turn around before the exit order becomes effective and a winning trade may turn into a losing one.
The same applies if you decide to carry out scalping from a mobile device. You need to ensure that you have the right logistics and infrastructure in place.
Many scalping and automated trading brokers offer their clients the possibility to install the trading platform on a VPS server (virtual private server) which is very close to the broker’s own server and therefore reduces latency to a minimum and guarantees the best availability without relying heavily on the trader’s computer equipment or internet connection.
Knowing technical analysis
We have previously mentioned that one of the advantages of scalping is the short exposure time to the financial markets. The trader observes a market and, when his strategy tells him to buy or sell, he places the order. As soon as the market has moved a few points, it is quickly closed again.
This greatly simplifies trading, as you don’t have to be aware of many of the variables. Apart from day-to-day economic news, which has an impact (especially if there are deviations from forecasts), the fundamental characteristics of financial assets (such as corporate earnings, dividend yield, political situation of the country, etc.) are not important in such short timeframes. The market is driven purely by supply and demand in these time periods.
Therefore, a scalper must know how to handle the tools that analyse supply and demand, i.e. technical analysis. He must know how to interpret the indicators and determine what the price is doing (supports, resistances, trends, moving averages, Relative Strength Index, etc.).
Without a thorough knowledge of technical analysis, you are not in a position to decide when there is an investment opportunity and when it is time to close the trade.
In addition to knowledge, a lot of experience and many hours of practice are necessary.
A well-defined trading strategy
It is not enough to know technical analysis. In order to carry out scalping, a strategy must be devised on the basis of the knowledge acquired:
- What policies will we follow to enter the market?
- And to exit?
- On which financial instruments will we trade?
- What technical analysis tools will we use?
- How much money will we invest on the day and on each trade?
- What stop loss policy (stop loss order) will be established?
- Do we or do we not trade on economic news?
- And similar questions.
Without a clear strategy, one wanders aimlessly at the mercy of the markets. But, when scalping, it is extremely necessary to have everything well defined in a trading plan. There should be no room for doubt, haste, indecision and other enemies of a scalper.
Establish a timetable
Within what would be the trading strategy (in a broad sense) the scalper must decide when to trade and for how long. Scalping for extended periods of time can be exhausting. Over-trading will deplete capabilities due to fatigue and lead to mistakes that take their toll on capital.
Typically, when scalping, traders tend to choose the opening hours of the markets, as it is during these periods that there is the most activity and, as a result, the most opportunities can be found. The price moves more strongly; and faster.
The most suitable times for scalping can be the following (according to Spanish peninsular time):
- To operate with European assets (opening and first hours of the session in Europe): from 09:00 to 11:00 hours.
- To trade American assets (opening and early hours of the session in the United States): from 15:30 to 17:00.
- It may be interesting to trade at the close of the US session: from 20:00 to 22:30.
- The Asian session coincides with the early morning hours, at 2:00 am.
The trader who chooses to carry out a scalping style of trading must be extremely orderly and act with unwavering discipline. For example, being able to withstand small losses without feeling the need to take revenge is as difficult as it is necessary. The market should be entered and exited only when the strategy indicates it.
Trading in excess of our capital level also represents a lack of discipline. In this case, the trader gets carried away by the potential gains.
In short, what is the point of a well-defined strategy if it is not maintained? In scalping, there is hardly any time to think; the trading plan must be followed without hesitation.
Choosing the right financial assets
Not all financial instruments are suitable for developing a trading style in such a short space of time. They need to be highly liquid assets, with the aim of entering and exiting the market quickly. At the same time, they must be sufficiently active to fluctuate. Assets that behave in a very stable manner, with hardly any day-to-day fluctuations, are not valid. Today’s scalping brokers offer a wide range of financial instruments so that traders can choose the most suitable for their needs.
As a general rule, a scalper concentrates on a few financial assets that meet these characteristics (there is no time to follow many markets, the trader should concentrate on a few). Among others, some of them could be:
- SP 500
- Crude Oil
The importance of choosing the right scalping broker
Because of the importance of this factor, we will give you some tips on how to choose a scalping broker in more detail later on. For now, suffice it to say that it is one of the factors that must be taken into consideration in order to be successful in scalping.
One aspect to consider is the operating commissions. Scalping is characterised by multiple small trades and each trade is subject to commissions. In other styles of trading these commissions have less impact but when choosing a scalping broker you should look closely at their conditions and fees.
Best financial instruments for scalping
We mentioned earlier, when discussing what a broker is, CFDs as the most commonly used financial instruments for scalping.
In fact, CFDs bring a number of advantages to this type of trading, for example:
- You have the possibility to trade both short and long
- The trader can take advantage of all the fluctuations that occur, both up and down.
- They are leveraged products
- If you have a correct risk management (and follow the guidelines with discipline), you can make profits with small movements. If you decide to go scalping with non-leveraged products, because they are such quick trades, to achieve worthwhile returns (in terms of time and effort), you need a vast amount of capital.
- They allow access to a large number of financial markets
- They are highly liquid financial instruments.
- They enable agile and efficient trading, which is necessary for scalping operations.
- The size of the operation can vary according to the trader’s needs. They are not rigid when it comes to investing and there are multiple types of contracts.
On the other hand, there are also other financial instruments, although they do not have the same characteristics and are not able to offer the advantages of CFDs.
For example, it is possible to carry out this type of trading with the physical purchase of shares or any other asset. However, it does not enjoy the financial leverage (large amounts of capital need to be invested). Similarly, it is not so easy and quick to trade short (and take advantage of market declines). In short, effective scalping is not very feasible without the use of financial derivatives (such as CFDs).
In any case, there are other derivatives that are also used for these purposes, such as futures or financial options. However, these financial instruments are traded on an official market and require standardised contracts. The volume of the transaction, and therefore the margin to be posted, is higher.
How to choose a scalping broker?
In order to choose a scalping broker, apart from the commissions (which, as we have already discussed, is an important factor), this series of elements must be taken into account. The trader must assess a scalping broker as a whole, deciding whether it suits his needs and investment style.
Broker regulation and reliability
A regulated broker is a guarantee that it does not act fraudulently. Client funds are safe.
Online brokers must be licensed to offer their services legally. This licence is issued by the regulatory body (financial regulator) of the country in which they are based.
The regulator ensures compliance with regulations and good practice in investor relations (it has sanctioning powers). In other words, it looks after traders’ interests.
Likewise, a broker that is not regulated is not operating legally. There is no guarantee of any kind and it has the capacity to commit fraud and/or swindle.
Online trading platform
The trading platform is the centre of the trader’s business. It is where markets are analysed, decisions are made, orders are placed and capital is managed.
It is necessary to know it in depth to be able to execute effective trading, however, in scalping operations, it is even more important because you do not have time to research its functions. It needs to be easy and intuitive to use and quick to execute orders.
Available financial instruments
It is necessary that the broker offers a range of financial assets suitable for scalping. If it offers a multitude of markets, this is a plus, as you have access to a wider range of opportunities.
Scalping brokers usually make financial instruments available to their clients that are suitable for scalping.
Another key factor when choosing a broker (whether for scalping or other types of trading) is effective customer service. But what is effective customer service?
In principle, the fact that it has long opening hours. Some scalping brokers offer a 24/7 service (there are financial markets that do not close). However, it is enough to make sure that support is available at the times you choose to trade.
It is also necessary that contact is fast, via live online chat, telephone support and other alternative channels. If it is offered in the trader’s language, so much the better.
In addition, it is necessary that the broker has trained staff to offer solutions to problems that may arise or questions that need to be resolved.
Finally, the fact that the scalping broker offers a demo account is important. It is a simulator where the trader practices in a real environment, the only difference is that the capital is virtual (therefore, there is no risk of loss your money).
A demo account allows us to familiarise ourselves with the trading platform, to use it as a laboratory to design and perfect strategies, to test the broker’s conditions first hand and, in addition, it is an effective tool for gaining experience in the financial markets (completing the training process).
Most scalping brokers offer a free demo account.