My trading is centered around scalping. So, when I look at prop firms, the first thing I’m curious about is, “Can I scalp?”
However, as I looked into it a bit more, I realized that this question alone isn’t enough. The important thing isn’t “Is scalping allowed?” but rather “What kind of scalping is allowed?”
Scalping is a style where you make many trades, aiming for short price movements ranging from a few seconds to a few minutes. Since it ends in a short time, you don’t have to hold positions for long. This seems to be a good match for prop trading.
On the other hand, the number of trades tends to increase. Because of that, the impact of spreads, commissions, slippage, and execution speed also becomes significant. Even if it’s small for one trade, it cannot be ignored when it adds up to dozens or hundreds of times.
Furthermore, in prop trading, there are things to check that are separate from regular FX.
Is there a minimum holding time? Are there restrictions on short-term trading? How are trades around news events handled? Can EAs or automated trading be used? Are there any actions prohibited as high-frequency trading? These things vary from company to company.
Therefore, just because it says “scalping allowed” doesn’t mean you can rest easy yet. You only really know once you’ve checked if your method fits within that company’s rules.
Another thing I’m concerned about is the compatibility with loss rules. While scalping makes it easy to keep individual losses small, small losses also accumulate as the number of trades increases. While in a slightly off state, you might approach the daily loss limit while thinking, “one more time,” or “just one more.”
Just because it’s a short trade doesn’t mean it’s safe. Because the turnover is fast, it can also go in a bad direction quickly. It’s quite fair.
Conversely, if your rules and the prop firm’s rules match, there are parts that are compatible. Making decisions in a short time. Limiting losses. Deciding on a daily limit. Stopping if the conditions aren’t met. This way of thinking overlaps with the risk management of prop firms.
In the end, it doesn’t seem to be a matter of “it’s suitable because it’s scalping” or “it’s not suitable because it’s scalping.”
In my case, since I do a lot of short trades, I’ve stopped judging by just the phrase “scalping OK” when looking at prop firms. I look at my holding time, number of trades, distance from news, order method, and how losses occur, to see if my style and rules clash with theirs.
It’s closer to the task of confirming my own trading habits rather than choosing a prop firm.
Prop trading and scalping. There is probably compatibility. But the answer isn’t decided by the company alone. I think you can only judge once you understand what kind of scalping you are doing.
Instead of “Can I scalp?”, it’s “Can I do my kind of scalping?”. That is probably what you should be asking.
