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Perhaps a lot of us already know how important it is to let our winners run.  However, scalping is totally the opposite of that idiom.  And it works for day traders.

Almost every stock can move a few percentage points every day. The stock market consolidates 60-70% of the time, during which most stocks chop around.  Choppy moves are the biggest enemy of the traders who like to ride winners. However, scalpers love choppy moves since they try to capture very small moves only. For example, it is very easy for AAPL or BIDU to move up/down 1% during any time frame.   A good scalper might capture a 0.5% move within a few minutes and then repeat it over and over again. Not only are smaller moves easy to capture, but they are a lot more frequent than bigger moves as well.  For example, AAPL might chop around 5-6 times a day and each chop moves 1-2%.  But it might have only one big move of 3-4% during the whole day.  Small profits add up very quickly.

A good scalping trade is profitable right after your entry.  So you will be closing your position in the next few minutes.   This kind of rapid firing makes your trading stake less exposed to risk. This also solves one problem for some people who can never hold onto winners

There are 2 hurdles in scalping though.  One is the accuracy of your day trading rifle assuming your marksmanship is a constant.  The other is that it is a bit of exhausting since you might need to aim and shoot more than 20 times a day.

As for me, I used to be a scalper (strictly day trader) before 2008. I did pretty well back then.  I averaged 6k-7k per month in profits for 7 moths in a row in 2007 running a 50k account.  And it started to go down hill from Jan 2008. I lost 10k in that month alone and stopped scalping immediately after that.  That quick and solid damage control really saved me.  

One single best thing about scalping is that you can trade any stock you want since all of them have multiple small moves of 1-2% every day.  Now I am determined to pick up scalping for day trading again. I will need to look at my previous trades again to see why I made those good solid scalping trades and why I failed in Jan 2008. 

See the daily charts of my glorious days of scalping  DRYS, RIMM, FSLR and VMW.  Of cousre, there were many other more stocks I day traded.    Each dot is a trade I took back in 2007.

Click on them to have a better view

VMW

DRYS

 FSLR

 RIMM

Of course my swing trading is all about “let winners run”.  I hope you are all doing well.