Strategy and performance
Scalping
Taking many short-duration trades for small individual gains. It depends on tight costs and reliable execution, because the spread and commission are a large share of every result.
GFN’s figure
GFN permits normal short-term trading, with one condition that applies to every programme: every trade must stay open for at least 2 minutes. Commission is $3.50 per side, $7 per lot round turn.
- Minimum hold time
- 2 minutes, on all three programmes
- Round-turn commission
- $7 per lot
- Not permitted
- Exploiting latency, pricing errors or platform errors
In detail
Scalping,explained
Scalping is the style most sensitive to the fine print. A minimum hold time, a round-turn commission and a spread that widens at the wrong moment can each remove the edge on their own.
It is also the style most often confused with prohibited activity. Legitimate short-term trading is permitted almost everywhere; trading that targets a pricing delay or an error is not, and the difference is in what the strategy relies on.
Related
Terms thatcome with it
Most rules only make sense next to the ones they interact with. These are the entries this one depends on.
Tick scalping
Taking positions for a handful of ticks at a time, often held for seconds. Where the profit comes from a pricing lag rather than a market view, firms treat it as exploiting the environment.
Day trading
Opening and closing positions within the same session, carrying nothing overnight. It avoids swap costs and weekend gap risk, and concentrates all of the account's risk into the daily loss limit.
Commission
An explicit per-lot charge for executing a trade, usually quoted per side. Two sides make a round turn, so the quoted figure has to be doubled to get the cost of a completed trade.
Round turn
One complete trade - the entry and the exit together. Commission quoted per side has to be doubled to get the round-turn cost, which is the only figure worth comparing between firms.
Latency arbitrage
Trading on a price that is known to be stale because a faster feed has already moved. It profits from a delay in the environment rather than from any view about the market, and it is prohibited industry-wide.
Also governed by /rules/scalping
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