Best Brokers That Allow Scalping

The Ultimate Guide to

Choosing a Broker
For Scalping

Not sure which broker is right for you?

Don’t worry - we’ve got you covered. In this guide, you’ll learn:

• Why AvaTrade scored high for scalping (Jump to section)
• Who AvaTrade is (and isn’t) suitable for (Jump to section)
• An in-depth feature comparison of the top #3 brokers (Jump to section)
• An overview on scalping (Jump to section)

Ready?

Part 1

Why Choose AvaTrade
For Scalping?

AvaTrade scored best in our review of the top brokers for scalping, which takes into account 120+ factors across eight categories. Here are some areas where AvaTrade scored highly in:

AvaTrade offers four ways to trade: Forex, Spread betting, CFD trading, and options trading. If you wanted to trade EURUSD through copy trading or other means, skip to part two.

The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.

AvaTrade have a AAA trust score, which is v. good. This is largely down to them being regulated by Central Bank of Ireland, ASiC , FSA, FSB and BVI, segregating client funds, being established for over 11 years, and much more. For comparison:

Trust Score comparsion

The second thing we look for is the competitiveness of the spreads, and what fees they charge. We've compared these in detail in part three of this guide.

Part 2

Who AvaTrade is (& Isn’t)
Suitable For

As mentioned, AvaTrade allows you to trade in four ways: Forex, Spread betting, CFD trading, and options trading.

To trade with AvaTrade, you'll need a minimum deposit of $100. AvaTrade offers a range of different account types for different traders including a micro account, mini account, vip account.

Finally, AvaTrade isn't available in the following countries: US, Belgium, Canada & Singapore.

Part 3

A Comparison of AvaTrade vs. London Capital Group vs. Oanda

Want to see how AvaTrade stacks up against London Capital Group and Oanda? We've compared their spreads, features, and key information below.

Spread & fee comparsion

Comparison of account & trading features

Part 4

Best Forex Broker For Scalping

BrokerNotes Top Forex Broker for scalping: AvaTrade

What makes AvaTrade a popular choice for BrokerNotes readers:

-Good reputation and strong history: Over 10 years in the industry
-100% automated execution to open and close trades at the current market price
-Regulated by multiple authorities including the Central Bank of Ireland, MiFID, ASiC and the FSA in South Africa
-Accounts for all levels including Micro, Standard and VIP
-Top risk management features including a guaranteed stop loss for a small premium
-Tight spreads and reliable pricing, from 1.0 points on EUR/USD
-Access to Major, Minor, Exotic and Cryptocurrency forex pairs

Find out more about their spreads, instruments and fees here: AvaTrade

What is Scalping In Forex Trading?

Scalping is a popular trading method used by many traders. Scalping refers to a method of forex trading where the trader opens and closes positions within a few minutes or seconds of each other, with the sole purpose of making small profits which can then be accumulated over time to result in more significant earnings. By quickly opening and liquidating positions in a time frame that does not usually exceed five minutes, traders hope to make small amounts of profit without subjecting their accounts to the market uncertainties which can hit trades that are left open for much longer.
For scalpers, a “bird in the hand is worth more than ten in the bush”. Scalpers prefer to take the small profits that are available to them on open trades rather than leave trades open for a long time and subject such trades to market uncertainties. Of course, there is still potential for scalping to lead to losses.

What are the Regulations Concerning Scalping?

Not all brokers allow scalping on their platforms. Typically scalping is only allowed on accounts that are operated on ECN platforms. Not only is the ECN trading condition better for scalpers in terms of execution speeds and in terms of having a no-slippage environment, it is also better for ECN brokers as the greater number of trades taken by scalpers will lead to more commissions being earned from both trade entries and trade exits.
Market makers due to their business model, generally are not supportive of scalping. As Market makers generally operate a commission-free trading structure and usually make their money from spreads as well as acting as counter parties to losing trade positions. Therefore, a situation where a scalper keeps picking off small profits that will also lead to small losses for the broker.

5 Important Factors to Consider When Choosing a Broker For Scalping

What is the broker’s policy concerning scalping?

Usually, brokers will indicate in their Terms and Conditions document whether scalping is allowed on their platforms or not. However, this is not always a concrete indication as there have been cases where brokers were ambiguous on this point and ended up sanctioning traders who attempted to scalp on their platforms.

Where is your broker located?

There are jurisdictions where the regulators of the forex industry have rules that specifically prohibit scalping. Therefore, you need to know if the broker you intend to use is located in such a jurisdiction.

ECN Scalping Broker

As stated earlier in this article, scalping is usually acceptable on ECN accounts because a commission is charged for trade entries and exits in addition to spreads. Furthermore, ECN brokers do not act as counter parties so they have nothing to lose from traders making repeated small profits from scalping. In contrast, market makers do not charge commissions on trades and act as counter parties to trades, so they stand to lose if traders keep making consistent profits from scalping. Many market makers do not allow scalping on their platforms.

Does the broker have fast price feeds?

In scalping, the speed of entry and exit is essential in setting up a trade. Your intended broker must be able to provide fast price feeds so you are sure you are getting prices which are up to date. Speed matters and delayed price feeds are detrimental for scalpers.

What does your broker specifically say about scalping?

Where you have doubts as to what the terms and conditions of your broker say about scalping, you can settle these doubts by contacting the broker directly via email or live chat. A reputable broker should be able to provide a definitive statement on whether you are allowed to scalp or not.

Terms & Conditions: What Scalpers Should Look Out For

Typically, terms and conditions contain some details in fine print which can easily be missed by anybody. Therefore, scalpers need to pay particular attention to their broker’s terms and conditions (T & C) to know what is allowed and what is not. This will help prevent problems down the road. Some main things you should look out for include:

a) Check the T&C if any mention is made of scalping and the time frame which serves as the cut-off limit for a scalp and a regular day trade.
b) Check to see if the broker states in plain language whether or not scalping is allowed on the platform.
c) Check to see if the broker’s terms and conditions specifically allow price arbitrage trading or not. If this is not allowed, it is a sign that scalping is not allowed as well. (where traders who have access to multiple price feeds may take advantage of the differential in price to enter and exit trades very quickly)

So you need to look at the terms and conditions to see what the policy of your intended broker is when it comes to scalping. Where there are doubts, contacting the broker directly before opening an account would be advisable.