Hybrid scalping system

Trading Systems Free Forex Trading Systems
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Hello fellow traders!

IMPORTANT! NEW SYSTEM HAS BEEN DEVELOPED, OLD SYSTEM BASED ON STOCASTIC, TMA and ICHIMOKU IS NO LONGER USED. NEW SYSTEM V2 EXPLANATION IS ON PAGE 12 and 13. FEEL FREE TO USE V1 SYSTEM BUT I WOULD ADVISE TO USE NEW SYSTEM AS IT HAS BETTER RESULTS.

My name is Jan, i am currency trader for solid 5 months and i have been trying to test and learn pretty much anything i could find over past months (like most of you probably:D). After quick checking different systems, from MAs, EAs, realtime indicators, volumes, all indicators combined in either possible way in mt4, checking out the most popular systems online, i have come down to three systems that are in my view the most reliable and give decent signals that you can hold on as a technical trader.

Bare bone of this system are: Ichimoku, TMS (trading made simple system), Steven Hopwood 10.2 system and PA (old plain candlestick price action). NOTE BEFORE USING THIS SYSTEM YOU DO HAVE TO USE LEARN ALL OF THREE SYSTEMS WRITTEN ABOVE BEFORE STARTING WITH TRADING IT. Simply by typing in google any of keywords should give you pointers straight away.

I DO NOT CLAIM OWNERSHIP OVER ANY OF ABOVE SYSTEMS, ALL KUDOS GO TO AUTHORS OF SYSTEMS

Are you wondering why modifiyng any of those great systems? Well simply becouse from my trading experiance doing changes here and there makes them much more powerful, or with other words combining some of their features and excluding others improved results a lot.

Here are some changes made:
-TMS itself is great system but after using Haiken Ashi candles or any other simplified candlestics used for TMS give much worse perspective over price action and S/R levels. Yes they do create less stress in trading but they also give weaker signals and more stress on entries. Probably the biggest advantage of default japanese candles is that you can get much better and cleaner entries compared to Haiken Ashi candles as HA candles are simplified.

-Steven Hopwood 10.2 system is great, but the peak of it for me was 10.2 slope indicator .I have been using this indicator since i started trading and it is for sure one of best indicators i have seen. Only by using of this indicator you can use it to determine your tp level. The rest indicators of this system were not that useful thats why i excluded them completly.

-Ichimoku is very powerful system, yet while testing it i have figured out two things. First you do not need any other line except KIJUN line. Just dont bare with other lines, it only messes your chart. There are only two valid signals with Ichimoku for this system, one is cross of kijun and PA and second is breakout now this is important -ON BREAKOUT PRICE AND KIJUN HAVE TO BE VERY CLOSE TO USE IT AS VALID SIGNAL, THE CLOSER THEY ARE THE BETTER THE SIGNAL. IF PRICE IS FAR AWAY OF KIJUN ON CLOUD BREAK, SIGNAL IS NOT VALID.

The main advantage of this system over Ichimoku, TMS or PA used aloane is that you simply get more signals, better confirmations and you get better idea how long should you stay in trade.

The system is meant to be traded on M1 and M5 charts. But any other tf would do as well.

Rules of system:
-For entry try to get at least two decent signals (for example PA and 10.2 slope indicator signal)
-The more signals you have on your side the better the entry

TP:
For tp there are many different ways how you can do it. How i like to do it is either to use certains specific systems signal or use resistance or support for it. What i mean for specific signal is for example you look only for kijun and PA cross as exit signal, or you use 10.2 slope indicator power as guide when to exit trade. I preffer the most 10.2 to exit trade with support of PA.

Sl:
Resistance and support + Ichimoku Kijun crosses are best to use.

Signals to look for with this system:
-Ichimoku breakout
-Ichimoku Kijun and PA cross
-PA (all possible PA patterns - pinbars, morning star etc…)
-Oversold or overbought stocastic (especially look for clean stocastic swings)
-10.2 slope indicator change of bull or bear power.
-10.2 slope indicator increase of bull or bear power.

I am making this thread simply to give something community back as there would be no progress on my side without it.

Note that briliant thing about this system is that it works on any time frame and you dont have to use it for scalping only, it serves just as well on high time frames.

The best currency to trade is without doubt EUR/JPY. It has strong liquidity which is needed when you are trading of 1 minute charts. As second option GBP/USD and EUR/USD are good pairs too, any other pair is less reliable.

Here is example trades that could be taken on 28.1.2013 (picked day randomly) of 1 minute chart.

Green line represents what should be start of trading day on 9:00 GMT. This is ofcourse what suits me best, but the main point here is try to avoid trading asian session as signals in that session are far worse.

#1.Enter long at 122.050 after closing of engulfing bullish candle. Additionally 10.2 slope indicator shows that bulls are still in good control, which is good for longs, stocastic just bumped of 20 level and oversold area, which is good for longs too.TDI indicator has crossed bullish but note that this is very weak cross. TDI crosses are good signals only when crosses happen after bit longer time or so called clean sharp crosses.

#2.Exit long at 122.155. We have very clean TDI bearish cross, stocastic just passing overbought 80 level, which is good for shorts, and 10.2 slope indicator shows that bulls are cooling off.

Enter short at 122.155. All previous signals that were good for exit of long positions are practically good signals to enter short position.

#3.Exit short at 122.100. We have bullish cross over kijun line, bullish clean TDI cross, and stocastic oversold. All good long signals and bad signals to still carry in short.

Enter long at 122.100. All previous signals explain it.

#4.Exit long at 122.163. Stocastic and TDI did not give good signals this time, 10.2 slope bulls are decreasing in power, when reversal of power on 10.2 slope indicator is appearing this is good signal to start looking for exits or entries. PA did formed nice bearish signal, two strong body candles, previous had wick on up side and got rejected by resistance, bearish has more full body which indicates the way south.

#5.Enter long at 122.040. Clean TDI bullish cross, stocastic oversold and passing 20 level. 10.2 slope indicator is against us in this entry, but note that color is not yet strongly red which indicates only slow pressure of bears.

#6.Exit long at 122.100. Bears are starting to press which indicates stronger red color on 10.2 slope indicator. Bearish Ichimoku breakout which indicates that you should be always on guard for bearish breakouts, after kijun was crossed with bearish candle this indicates we should defenetly exit.

Enter short at 122.100. All previous signals indicate strong short entry.

#7.Exit short at 121.750.Pinbar indicates that downtrend might be over. There is still decent pressure of bears and entering against this pressure is always a bit risky. TDI and stocastic both gave no good signals.

Enter long at 121.750. Enter due to possible end of down trend (pinbar).

#8.Exit long at 121.910. Pinbar formed, which aloane is strong signal. Stocastic is additional confirmation while being overbought. TDI is still showing moving upwards but in this case we should ignore it.

#9.Enter short at 121.89. Two body candles with stronger wicks up which confirms rejection from resistance is decent bearish signal. All indicators in this entry are showing no clear picture, which means that this trade should be watched closely for any breakouts.

#10.Exit short at 121.81. Stocastic oversold and just passing 20 level, TDI has decent look of bullish cross even that it later didnt happen as clean. 10.2 shows bears are in charge but the power is yet not strong.

Enter long due to all signals above.

#11.Exit long at 122.02. PA confirms full body candles, bullish candle has wick above which indicates rejection of going higher, and full bear candle shows possible down movement. We have also very clean TDI cross after being long without any cross, stocastic passing over 80 level in nice arch.

Enter short at 122.02. In this case 10.2 indicator is against us, it shows that bulls are still very strong, actually over our short position being opened their power increased, but yet all previous signals are strong enough that it should be valid entry. Again the point of this system is using some of the most reliable indicators - systems together and pick as much as decent signals possible to decide on entry.

#12.Exit short at 121.85. Full engulfed bullish candle after downtrend, good PA signal. Very clean bullish TDI cross, stocastic oversold and going up from 20 level. 10.2 shows bears are still pressing but there is more signals going in side of bullish movement.

Enter long due to signals above.

#13.Exit long at 121.85. This would be breakeven long (not considering spread). Full body bear candles show for down movement, clean bearish TDI cross, stocastic overbought. 10.2 shows increase of bears, practically no reason to stay in scalping long anymore.

Enter short due to reasons above.

#14.Exit short at 121.70. We have clean TDI bullish cross, stocastic going up from oversold, 10.2 slope shows that bears are loosing power, PA shows that bearish candle had strong wick down and there is quite decent full body bullish candle.

Enter long for signals above.

#15.Add to long position. Price got rejected by kijun, PA shows clearly that as both candles spawned wicks down towards kijun, clean TDI cross shows bullish movement, stocastic is going from heavily oversold up.

#16.Exit long at 122.000. Full body bearish candle confirms possiblity for down movement. Stocastic is overbought and 10.2 shows that bull power is weak.

*FOLLOWING THIS SYSTEM FOR EXAMPLE CHART ABOVE 9:00 -12:00 GMT, IT WOULD PRODUCE 168 PIPS (NOT INCLUDING SPREAD) ON M1 TIME FRAME. THIS IS SOLID THREE HOURS OF TRADING FOR A VERY NICE BOUNDLE OF PIPS. *

I have made little less than 50% this week with barely any loosing trade.
This are some example trades of this week:

I will be posting live trades later on.

indicators.zip (35.4 KB)

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hi! Thanks for sharing. Looking forward for your live trade examples.

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most impressive. keep going ill try it on a demo on monday

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Jan please post the template and indicators you are using,looks intresting,will try out on demo
Regards

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Firstly Jan thank you for sharing your strategy with us and the forum. In terms of liquidity have you traded or back tested your strategy on the USD/JPY? I don’t think the forex world class EUR/JPY as a major; so liquidity could be an issue. You made reference to your performance %50 ROC in a week, so congratulations it all looks very promising… Money management between 1-2% per trade?

Regards
Richard

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Guys i wont have time to post live trades today as i am not home, as i will be trading of phone (same strategy), but i will post at night what trades i took and explanations for them. I will also attach all needed indicators and maybe a bit more explanation of using them with system later.

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Here are some trades from today. The losing trade was when journal team entered in our university and they disconnected internet for public use, so i was out of connection for half hour. Luckly i placed sl and wasnt too much in worries. If it wouldnt be for that it would be perfect trading day.

I wont be posting any trades chart i did for today becouse none trade really was nearly pefect in system rules, practically PA on EJ today has been breaking many tops and some bottoms too so i had to manage my trades over longer term after entries.

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Thanks for posting the system janpec, looks like you’re having decent results with it, which is saying something when one is talking about scalping in general! I’ll follow this thread, will give it a try soon.

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That looks… Prodigious…! Thanks for sharing :slight_smile:

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Agreed! Thanks for sharing your strategy, I’m looking forward to demo trading it. I am curious about the money management per trade as well. What is the max risk taken per trade?

Edit: Hah! I guess this is my first post in the forum. Hello All!

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Today has been very strong trading day, Cyprus and BOJ both added to equation a lot.

130% account increase today. Basically the main drive was EJ long tooken yesterday.
Here are my todays trades:

As for risk taken per trades i am not using conservative methods, i am just more agressive trader and i am trying to look up what could system give at its maximum. I am using lowest possible lot size for my account though which is 0.01. Planning to add deposit on account tomorrow.

This day has been perfect for this system, i have been only able to enter 50% of all avalible great signals, pretty much missed all entries on GU and some on EJ aswel.

Here is GU example for today, M5 chart. GU was all day very bullish thats why exit signals on TDI or PA were barelly any good. Basically Ichimoku and 10.2 TMA slope were the only reliable factor in such conditions.

1.Enter short. You could have entered right on first candle of chart shown on picture as both PA and kijun already broke cloud but kijun shown no decline yet , so safer entry would be as shown with number 1. on picture.You can see that aswel 10.2 TMA slope is showing increase of bear activity and TDI is giving very sharp falling edge.

2.Exit short. Candle closed while crossing kijun, 10.2 showing decreased activity of bears, TDI on bullish move. Note that Stocastic is already in overbought area, which indicates that while in bearish longer term move this could mean that price would fall and it did later moved down for two candles, but since this is against system rules we do exit short earlier on signal.

3.Enter long. Ichimoku bullish breakout, strong bullish activity, and TDI on decent bullish cross.

4.Exit long. Stocastic just passing 80 area as being overbought, you can notice sharp decline of bullish activity on 10.2 indicator- not that green bar become darker green, it also lost its size very quickly. TDI in extreme area over 70 area and on bearish cross. Note that normally TDI signals EVEN if in extremes on strong bullish trends are not really solid signals to look up to. However backed up with Stocastic and 10.2 it makes it cleaner picture.

  1. Enter long. Overall bullish trend, PA still above kijun, Stocastic oversold.

*I have attached all needed indicators for this system on main post. *

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great system. I also study these indi too. What’s you setting for these indi in different TFs?
I saw you use 5,3,3 for Stoch, I guess you use default for TDI, how about others? like Ichimoku.

thx

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I believe all the indicators are on default settings.

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Here is one todays trade example:

Entry long:
PA confirmed after bullish engulfing candle closed long signal, 10.2 TMA slope was on slow bullish descend but if we check previously 10.2 markings we can see that market is basically consolidation or on slower move.
Stocastic was oversold and just heading up from 20 level, TDI on clean bullish cross.

Exit long:
PA doji formed, doji itself can be good enough signal since since start target profit for this trade was only few pips.

And to answer previous questions: Yes all indicators on default settings.

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This is some random m5 chart, i have placed where entries should be placed. Just for study of this system over weekend.

1.Short
2.Exit short
3.Long
4.Exit long
5.Short (after trendline support is broken)
6.Exit short
7.Short
8.Exit short, Enter long
9.Exit long, Enter Short
10.Exit short, Enter long
11.Exit long
12.Enter long
13.Exit long

All entries would produce over 100 pips.

If you have been already actively trading this system this week you could have noticed that system itself has three cathegories of signal quallity or priority for trending markets which become most clear in heavy trending conditions such as this week.

Signal priority of system for trending markets and markets with “normal”- not sideways movement:
1.Ichimoku
2.PA
3.TDI and 10.2 TMA slope and Stoch

This means that Ichimoku signals such as breakouts or kijun crosses are strongest stignal to follow in such conditions. You could have noticed that PA tops with dojis or pinbars have been broken a lot in such conditions, TDI failed many times, 10.2 TMA after giving signal for bailing of bulls recovered the next candle.

Now here is signal priority for sideways market (no trends, pair does not pick clear dirrection of move):
1.PA
2.Stocastic
3.TDI and 10.2 TMA slope
4.Ichimoku

You can notice that signal priority in sideways market completly changes. It becomes very obvious after you are using system for 1 month but might be little surprising right on start. The best about this system is that there is no need to discard your trading day if market is moving sideways as this systems works perfectly in such conditions too, the only requirement is that moves are high enough to cover your spread and giving you a pip or two.

Just be careful with shorts on JPY pairs next week, BOJ still on Blitzkrieg mode. Weekly chart shows for EJ 130.00-140.00.

If you have any questions regarding system feel free to ask.

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Here are some todays trades. Hopefully it will serve for some learning for those who are using system. Entries from 2 to 5 were all taken leaning on Stocastic signal mostly becouse there was up trend on m5 with good bull support stocastic oversold swings are helping us for instant pullups. Entry 5 was taken a bit too quick i have been looking closely if m1 Ichimoku would decline for bearish breakout and it did before hitting nearest resistance. Entry 3 was a bit too quick too as i didnt get clear signal of TDI since i was trading all this of phone. Basically i am using pretty much the same system on phone, just 10.2 TMA is replaced with MACD and TDI is replaced with 2 MAs placed in RSI indicator window which gives almost identical behaviour but way more noise on its curves.

200% account increase for this month so far (50% for the day), i am opening additional account with Oanda today becouse it allows Paypal transactions.
If you have any question regarding entries let me know.

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Thanks for sharing.

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hello there Janpec1000,
really good job here. somehow im also new in the field, trying to pick up a stratgy that will make me finaly feel that i greap the right thing! Did you try to use this strategy on bigger time frame like 1h… 4h and how did that work out?!
sorry for mistakes, thx for the answer

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@quizo You can use this system on any time frame. Any. It can be used as agressive scalping method on m1 charts or laid back trading on h4 charts. You should fit system to what trading style suits you best. But bare in mind that higher time frames will produce you less pips or % than scalping on m1 or m5 charts. Bascially due to less signals and the fact that you cant use as high positions on higher time frames since faulty trades could cause too much drawdown. I am actually always checking in morning if there are any signals on higher time frames and if they are i place the trade, i just havent been placing them lately on high time frames as i had quite small account and couldnt even afford drawdown with smallest position. But anyways new deposit has been added yesterday so higher time frames are on table again:D

On trading side for today was good day again. Nothing to complain about. made 50 pips which is way less than yesterday but still good enough to make good profits with.

Btw if there is any setup that i find on higher time frames i will post it live.

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Actually just by quick look found setup on AUDUSD H4. Pinbar former, Stoch looks great, but before entering wait for TDI cross and 10.2 TMA indicator on next h4 candle has to show weaker bulls.