While the gain from any single trade is small, this method aims to build up profit by repeating trades many times over. It is positioned as a variant of day trading with a particularly short trading cycle.
Features
Because trades are repeated frequently, costs such as commissions and the spread (the difference between the bid and ask price) tend to accumulate, and the level of transaction costs has a relatively large effect on overall results.
Benefits and points to keep in mind
This approach requires continuously watching price movement throughout trading hours, calling for a corresponding level of concentration and experience. If misjudgments accumulate over a short period, losses can also grow quickly, so having a money-management and risk-management approach worked out in advance is considered necessary. Compared with other investment styles such as day trading or swing trading, neither approach is inherently superior — each has its own characteristics and points to keep in mind.