I agree that it’s frustrating, but as long as you have good MM it’s no big deal.
I’ve had an 8 trade winning streak with scalp lines before, so I’m willing to put up with a losing streak as well. 
If I did scalp line trades on USD/CAD I would have taken that trade as well with a pending order. There was nothing wrong with it, it just turned out to be a loser.
If you were around to take a reversal trade it was a perfect setup. You’d have made your lost money back plus a good profit, but if you’re doing scalp lines set-it-and-forget-it style then you did everything right, it was just a loser.
Matt and Phil,
I took this one too and lost out, but I wish I had stayed up a few hours longer to confirm the reversal and take it. That leads me to my question…
With this type of grouping pattern reversal, with several indecision candles at the top of a trend, do any of you feel safe setting an arbitrary reversal pending order at the low of one of the grouping pattern candles? The reason that I’m asking is that historically this works out statistically well, just looking through the 4hr charts for various pairs. But you never really know when the reversal itself is going to take hold and start moving. Would you run a high risk of getting faked out by a long wick on a future indecision candle, prior to the good reversal move?
Cody
I’d safe that’s absolutely safe, in fact it’s what I would have done if I traded this pair.
A short pending order a few pips below the IB’s at 1.1585, with a stoploss back above the wick at 1.1660.
I would have set alarms to watch the price manually after the trade hit though. There is no good place for an automated TP with this trade. I would have watching the price around the break of the trendline around 1.1540, but since it flew right through there I would have gotten out at 1.1465, after it bounced off the S+R area.
Matt,
What was your entry price for the short? Mine was not triggered. I have a big cushion on USD/CAD; 9 pips + half of the spread (I’m on Oanda, so the average of bid and ask is graphed). This pair has a tendency to poke beyond scalp lines pretty frequently.
Cody
Just FYI – if you go to Add Study in Oanda’s platform, and turn on High/Low Bid/Ask (all four), then when you mouseover a bar it will show all that info in the upper left corner. In other words, if you’re setting a long order, you can see what the High Ask was for the candle you’re basing the scalp on rather than trying to guess at spread and all that.
Orpips,
That’s right, I remember you mentioning that in MH’s blog a while back and I completely forgot about it. Thanks for the reminder.
Cody
154.06 is the only one I consider a good scalp line.
there is absolutly no reason to trade anything less than an a+ setup. When you risk capitol you should never settle for less.
for me im going to only paper trade this method till end of summer.
having said that i will definatly be eyeing the 154 level
I think you should reconsider that outlook. If you only trade when the perfect storm comes along, you will very rarely trade, you will very rarely make any money, and sometimes you will lose money even on the A+ set up.
I agree, whatever method you are trading you should have a certain level of confirmation, but there is no sure thing or A+ set up that is always a winner. There is only probability. If a trader can’t accept risk then they shouldn’t trade.
I’m with johnnyK on this one - A+ setups have the highest probability for earning the most pips and running the longest. I know this thread trades just the one pr but sticking with A+ will give the most bang for the buck and keep one out of low probability trades. d.
ThePhoenix has a good point, but I don’t think it applies to NickB scalp lines.
If you win 100 1:1 trades with a 60% win rate then you will make more money than if you traded 10 1:1 trades with a 100% win rate.
If you’re scalping a 1M or 5M chart then you’re going to want do to what ThePhoenix is suggesting, but if you’re trading longer TF’s then you want to wait and get the A+ setups.
I disagree with ThePhoenix on how many trades you need to take to make good money, mainly because we have different opinions on what “good money” is.
I only take a few (around 3-5) trades per week and I make around 3-5% per week. To me that’s “good money,” but to more aggressive traders it may not be.
What I was getting at with saying, if you only ever trade the perfect storm or A+ set up, is that most new traders that think like that are looking for a perfect formula of indicators or candlestick patterns or whatever. They think if they all line up just right, like written in some book, that will guarantee a win…because that is the A+ set up.
They want to rely on an A+ set up to make all the decisions and take all personal discretion out of the trade. It just doesn’t work like that. There is no A+ forumula that always lines up exactly the same way and doesn’t take some amount of personal descrection and judgement.
You and I both know by now, there is no such thing as A+ set ups.
Even on nickB’s system there is much personal discretion and judgment allowed and even implied in the instruction, as far as how many candles to count for reversals or between scalp lines and things of that nature.
Even you yourself have taken lines successfully that nickB has not considered valid.
That is true, there’s plenty of room for personal judgment when it comes to placing scalp lines. But I do still say there are A+ setups. An A+ setup is a line that’s so good that it would be a scalp line based on anyone’s judgment.
Anyone can see that 154.04 is a perfect scalp line setup. It exceeded, by far, all the criteria needed to define a scalp line. There’s not one NickB scalp line trader around that wouldn’t agree that’s a good scalp line, so it’s an A+ setup
Does being an A+ setup mean it will be a winner… Of course not! But a line like that has the best chance of winning, so it is the “perfect” setup.
Yes, of course, but that is not the only set up you would ever trade.
The, “only A+ setups,” type of traders would wait for that AND ONLY that set up. They would end up missing out on a lot of winning trades that were not A+ but had a high probability in their favor. As a result, they would rarely trade and rarely make money.
See what I’m saying?
Yep! I see what you mean.
I do agree you would rarely make money, but it’s not how often you make the money, it’s how much you make. If you traded one scalp per month at 2% risk and won 70% of the time you could still make about 10% per year.
That’s a low number in the forex world but still a good return on an investment. Really good considering it only takes a few minutes per month to do!
+50 on both of the last 2 scalp lines! 156.62 and 154.04
Finally some luck!
Yeah, I would have been stopped out on this one. I did not set a pending order for this one mainly because I’m having a look at using a support & resistance zone on the USD/CAD instead of defined scalp lines, since it seems that there’s a range of where candles hit and reverse.
I’m sorry to hear that you lost out on this one. I’m looking at putting together Nick’s S&R and scalp line trading that I’ve been doing and incorporating trend lines the way Phil has been doing. I’m seeing that some of the times that I’ve lost out on false breaks I could look back and see it was more of a S&R zone than a defined line that the false break stopped in, and other times where price has seemed to reverse for no particular reason I’ve been able to find a bounce along a trend on the 4hr charts. Hopefully a bit more visibility that way will help out, and I’m planning a few trial trades this week based upon this expanded method.
Did you get in on either of the scalp breaks on GBP/JPY last evening?
Cody
Actually, I didn’t take 154.00 because I neglected to set a limit order. I’m not certain why, but I guess I can’t count it as a loss so it’s not too bad.
At least we’re early in the week. You could certainly still come out ahead before all is said and done on Friday.
Cody
Woot! Quality reversal as well! I got in at 154.37 and got out with 58 more pips. It could have been 90 pips, and still going, but 158 pips is a good day for me. I’m closing the charts.