Hi all,
I am keen to try out this method, i understand the main points of the method ie trade the break of a previous swing high or low with a 50 pip tp & sl, however my main concern is that most of my trades will be taken with pending orders as i have a busy day job.
i am interested to know what the success rate is for those of you who use pending orders, I understand that there has been a bit of a losing run recently but over the longterm how does it fare, on reading nicks ebook i get the impression there is a lot more analysis that goes into his trades rather than set & forget
also on setting the pending order do you set it to trigger when price makes a clear break of the scalp line by a few pips & then the tp & stop will also have to factor in the spread therefore with an 8 pip spread on gy my 50 pip trade could easily become a 40 or 38 pip trade on the profit side but on the losing side the 50 pip sl could lose 60 pips.
I worked exclusively with pending orders in the 6 months that I worked on demo with this method, and have only started incorporating reversals into my trading having gone live in the last 5 weeks. My success rate on demo was consistent with that quoted by other folks; around 65-70% (and thatās with a few stupid mistakes along the way). I have been fortunate to have some time to glance at charts during my work day lately, but wonāt necessarily be able to do so indefinitely (Iām a contractor and may be doing very different work for different customers). I feel confident that I could succeed at targeting an average of 50 to 75 pips per week with pending orders alone, and reversals along the way are just a good bonus.
My personal entry method has been using a cushion of 6 pips on GBP/JPY plus half of the spread (I use Oanda, and they quote the average between bid and ask), which typically puts my entry 9 pips above or below my charted scalp line. I personally target 50 pips from my entry, not the scalp line and this has worked out pretty well.
what pairs have you tried, and whats the buffer pips for each of them and the target profit/sl, thanks~
Iāve used 50 on GBP/JPY since I started with the Nick B method, and I also started trading the USD/CAD with a TP/SL of 35. Based on ADR, Iāve been looking at 50 for TP/SL for the GBP/USD too. Nick has a great estimation for appropriate targets based upon the ADR of a pair; take a look into his ebook on calculating targets and stops.
thanks for the reply, when you set your stop loss would that also be 50 pips from entry or from the scalp line
I also calculate my SL from my entry price vs. the scalp line.
True; I think when I first looked at the GBP/USD pair I calculated a 40 pip SL/TP. I havenāt taken any trades on it in the last 2 weeks, though.
Scalp lines are killing me right now. Iāve watched my go live account balance spiral away. Iām thinking of looking more historically at all reversal areas for significance and focusing on defining S&R zones than scalp lines or S&R lines. Iām sure Iāll miss some trades, but itās a more conservative approach and I can still focus on ideal reversal pattern trades from those S&R zones.
Thatās exactly my thinking. I thought scalp lines would suit my style of trading at first but I like having confirmation lines and that means candle patterns, S&R, and trendlines for me. Iām not saying scalp lines donāt work and a 70:30 win ratio should be more than enough for my style.
Right. Thatās where Iām at too, and adding trend lines the way Phil is doing is showing me the same historical scalp and S&R trades Iāve taken since the start of demo in a different light. Otherwise mysterious changes in price direction start to come into focus when you see that they bounced off of a trend line.
The next question in my mind is how to proceed from here. Iāll continue to do breakout trading, but I might look exclusively at S&R on a chart from a zone standpoint and also look at the perfect storm kind of setup where a LWP bounces off of S&R and a trend line. Those have a very statistically significant success rate, but unfortunately I have to catch them in the act. Iāve enjoyed the fact that with scalp line trading Iāve been able to trade almost exclusively with limit orders.
The only two pairs other than GBP/JPY that Iāve used the the ADR-based target calculations are the USD/CAD and GBP/JPY. In both cases Iāve found that the ADR/4 or ADR/5 (if ADR for the last few days has been below the longer term ADR), have both worked out well.
I do use a buffer too, and that part is kind of arbitrary since that has to be based upon past experience. I got the 9 pip buffer I use on USD/CAD from Metalhawk, a trader on Nickās blog and itās definitely necessary there because of all of the times price will just peek above a scalp line and then reverse. I use a 6 pip buffer on GBP/JPY and Iām doing the same on GBP/USD. This buffer is in addition to accounting for the spread. Iām on Oanda which charts the average of bid and ask values, so I add half of the spread into my buffer for both long and short orders. With that said, Iām looking at going forward with a S&R zone approach to breakout trades so that will factor into a buffer between a scalp line and where Iāll set any pending orders.
Loss on long @ 152.40. My own fault for setting my entry at 152.48 instead of at a more sensible 152.53 or so, to take into account possible effect of the round number. Although I notice in retrospect that neither Nick nor Metalhawk took that into account either, which is odd (or at least they didnāt mention they did).
Orpips, I lost out on this one too and was thinking my entry was too close to the scalp too. Itās broken further above the scalp, so just about anyone would be in the trade now if they werenāt in the earlier peek above the line. I guess weāll see how it goes for them.
I took that loss as well. No biggie. There was a 34EMA break slightly below which I figured would give it the push it needed, but markets were pokey today.
The 155.30 level doesnāt look too bad; it didnāt retrace from that area too strongly but thereās another bounce from the area back on the 6th. What do people think of entry at 155.50 as a safety measure? Itās possible an entry around the 155.30 level could stall out around the psych level.
Sorry if you have discussed this already, but I do not have time to read now full 60+ pages :o
I have read Nickās books for the first time a few days ago and I have problems with spotting the S+R horizontal lines. I am getting them a bit crowdedā¦
If anyone minds, maybe he can post here the 5-10 current lines of the GBP\JPY pair please?
Or at least try to explain how he spots them? What needs to be the space of pips by those historical lines? Just to be clear, I am referring to the historical S+R lines, not to the scalp lines. It is much easier to identify scalp lines.
That is a good scalp line. I currently have 160.36, 155.34, 146.73 as scalp lines on my chart.
Iād say 152.44 is a good S+R line to trade a reversal, but Iād be careful trading NickB S+R breaks off it. It doesnāt have any good history past a few weeks (very few lines do nowdays on GBP/JPY) and itās been broken twice in the past two weeks.
