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Trading Lab 101 · Lesson 4
Scalping – Ultra Short-Term Micro Moves
Learn how scalpers read order flow and tiny price changes to capture micro-moves again and again—without letting one loss erase a day of progress.
Lesson Overview +
Lesson 4 drops students into the fastest environment in the entire chapter—scalping. Instead of caring about multi-day trends, scalpers care about the next few seconds: the spread, the size on the bid and ask, and how quickly price is filling through the book.

Learners examine how scalpers select “scalpable” stocks, how they read order flow, and why rule discipline matters even more when dozens of trades are taken in a single session. The goal is to show that scalping is not “random clicking”—it is structured micro-decision-making that lives inside a very tight risk box.
Lesson Walkthrough
Lesson 4 – Scalping
Watch this walkthrough to see how scalpers think about liquidity, spreads, and risk when every trade lasts seconds, not hours.
Full Lesson Text +

Informational Text – What Is Scalping?

Scalping is the fastest-paced trading style in the chapter. Instead of holding for minutes or hours, scalpers often hold for seconds. Their goal is to capture very small price movements—sometimes just one to five cents per trade—and repeat this process many times throughout a session.

Scalpers work only in highly liquid stocks with tight bid–ask spreads. They don’t care about the long-term trend; they care about the micro behavior of the order book: how many shares are stacked on the bid, how quickly the ask is being hit, and whether large orders are appearing or disappearing.

Because each win is small, discipline is critical. A single large loss can erase dozens of successful scalps. For that reason, scalpers follow strict rules about maximum loss per trade, maximum loss per day, and when to stop trading.

Scenario Example – MicroChip Co. in a Tight Range

MicroChip Co. is trading in a tight band between $20.00 and $20.05. The bid is stacked with large buy orders at $20.00, while the ask at $20.04–$20.05 shows smaller sell sizes. This tells the scalper that short-term demand is slightly stronger than supply.

The scalper places a buy at $20.01. As buyers hit the ask, price quickly prints through $20.04. When the visible buy size thins out and new sell orders appear, the scalper exits at $20.04. The profit is only three cents per share—but repeated 40–50 times, that edge can add up.

Process Summary – How a Scalper Thinks

  • Scan for scalpable candidates – High liquidity, tight spreads (1–2 cents), and active order flow.
  • Read the order book – Which side is heavier? Are large buy or sell orders supporting a level?
  • Plan the micro-trade – Exact entry level, exit level for a few cents of gain, and a tight stop.
  • Execute quickly – Use hotkeys or very fast order entry; hesitation often means missed fills.
  • Respect the stop instantly – No “give it room” thinking; a small planned loss is acceptable, a big emotional loss is not.

Key Vocabulary

  • Order Flow – Real-time buying and selling pressure visible in the order book.
  • Bid–Ask Spread – The difference between what buyers are willing to pay and sellers are willing to accept.
  • Liquidity Pool – A cluster of open buy or sell orders at a specific price level.
  • Tick Size – The smallest possible price movement in a market.
  • Fill Rate – How quickly and completely your orders are executed.

Lesson Flow – How the Session Unfolds

Learning Target: I can explain how scalpers use order flow, tight spreads, and strict rules to capture very small price moves repeatedly.

Bell Ringer: Students see two screenshots of an order book and identify which one looks more “scalpable” based on spread and size.

Mini-Lesson: The instructor introduces the idea of micro-moves, reviews key vocabulary (spread, liquidity, order flow), and contrasts scalping with day trading and swing trading.

Guided Practice: The class walks through the MicroChip Co. example and identifies where the scalper enters, where they exit, and where the stop would go.

Independent Practice: Students use the activity panel to design a “micro-trade plan” for a sample chart: where they would scalp, why, and how they would manage risk in real time.

Closure: Learners answer a quick question: “Why can a single undisciplined loss be more dangerous for a scalper than for a swing trader?”

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Trading Lab 101 · Lesson 4 Activity
Design a Micro-Trade Plan for a Scalper
Choose a “scalpable” setup, define the micro entry and exit, then review whether your plan protects you from one big loss wiping out many small wins.

Imagine you are responsible for planning one scalping sequence like a professional. Use the panels below to describe the candidate, define the exact rules for entering and exiting, and reflect on how you would protect yourself in such a fast-moving environment. When you are finished, generate your summary, optionally print/save a copy, and submit your work to your instructor.

1. Scalping Candidate Snapshot +
2. Plan vs. Execution (Entry & Exit Logic) +
3. Key Data & Risk Metrics +
4. Speed & Emotion Check +
5. What Keeps the Edge / What Destroys It +
6. Next-Trade Adjustment +
Generated Summary (copy, print, or save):
Mastery Check
Fill in all six sections with thoughtful responses. When everything is complete, this badge will glow to indicate that you’ve designed a structured micro-trade plan that respects scalping risk.