NickB's 4H Scalping Method

[phil838]

Is anyone here looking at the GBP\JPY chart?

I have a scalp line at 156.45 and the price is 156.22 now.
We are going to have or a breakout up, or a reversal.
I have checked the news today and it seems that the USD will go strong today in two more hours. I am quite new to all this business so there is a chance that I am saying a dumb thing - If the dollar goes strong than the Yen will weaken. If the Yen will weaken so the Pound will go a bit strong. Makes any sense?
I thought about it cause I remember phil showing me that all the charts with the Yen look very similar, so the USD\JPY and the GBP\JPY chart may look the same. That is the reason I hear people say that the USD news have an effect also on other currencies?

Ben

I have no idea!

All that fundamental analysis stuff isn’t my thing. I completely ignore it except for the most major news announcements (like the US announcing a new stimulus package, or the monthly NFP report).

I’m not saying you shouldn’t watch it though. If you’re into all that then it would definitely help you out! I just prefer to ignore it and keep things simple.

[benji533]

I have no idea!

All that fundamental analysis stuff isn’t my thing. I completely ignore it except for the most major news announcements (like the US announcing a new stimulus package, or the monthly NFP report).

I’m not saying you shouldn’t watch it though. If you’re into all that then it would definitely help you out! I just prefer to ignore it and keep things simple.

Umm…I am just trying to prevent making winners into losers cause of news like yesterday…isn’t my thing either, but I can give it two minutes to check the calender each day

Ben

[tnederlof]

Hey, I am new here to this forum but have been Forex trading (in practice accounts) for a month or so. I like this strategy a lot and its been working since I started using it. I look forward to following all of this. Right now I went long after it broke the 156.43 line I had… so far so good.

[Roberto_Dinero]

I like this strategy too, another set and forget type thing.

Can I ask, has anyone tried this on other pairs? My broker has a 7 pip spread on GbpJpy and with a relatively tight stop loss I’d prefer to be trading something with a little less spread.

Also, are you counting the swing low at 152.30 as the lower bracket now or sticking with the major swing low at 146.70?

RD

[benji533]

I like this strategy too, another set and forget type thing.

Can I ask, has anyone tried this on other pairs? My broker has a 7 pip spread on GbpJpy and with a relatively tight stop loss I’d prefer to be trading something with a little less spread.

RD

RD, I do not think that anyone had back tested it enough time, but like Phil said. the all the JPY pairs are very similar with their movements…about 95% the same (check your charts).
So I will suggest you trying it on USD\JPY or EUR\JPY if the spread is smaller on those pairs.

Ben

[Roberto_Dinero]

RD, I do not think that anyone had back tested it enough time, but like Phil said. the all the JPY pairs are very similar with their movements…about 95% the same (check your charts).
So I will suggest you trying it on USD\JPY or EUR\JPY if the spread is smaller on those pairs.

Ben

I’ll test it out, thanks Ben

[phil838]

The 156.43 line broke and was a winner. I watched it as it happened and ended up getting 55 pips.

How did everyone else do?

[phil838]

Hey, I am new here to this forum but have been Forex trading (in practice accounts) for a month or so. I like this strategy a lot and its been working since I started using it. I look forward to following all of this. Right now I went long after it broke the 156.43 line I had… so far so good.

Welcome tnederlof,

Looks like the 156.43 trade was a winner! I’m glad you got some pips on it.

[phil838]

I like this strategy too, another set and forget type thing.

Can I ask, has anyone tried this on other pairs? My broker has a 7 pip spread on GbpJpy and with a relatively tight stop loss I’d prefer to be trading something with a little less spread.

Also, are you counting the swing low at 152.30 as the lower bracket now or sticking with the major swing low at 146.70?

RD

It should work on any pair, I just think it works best on GBP/JPY. If you trade other pairs you’ll probably have to adjust the SL and TP numbers, but it should work.

I’ve got both 152.30 and 146.70 on my chart as valid scalp lines. If price drops down low enough I’ll trade them both!

[benji533]

Welcome tnederlof,

Looks like the 156.43 trade was a winner! I’m glad you got some pips on it.

Phil, if the price won’t keep going up at least 200 pips above 156.43, that won’t be a good scalp line anymore and we need to remove it, right?
And the R+S line that was broken will stay there as it is an historic line…hope I’m right.

Ben

[Roberto_Dinero]

I’ve got both 152.30 and 146.70 on my chart as valid scalp lines. If price drops down low enough I’ll trade them both!

Ok, so using that logic I just put 160.35 as my next buy order. Is that about right?

Taking a quick visual scan of the other pairs you are right, it does appear that Gbpjpy trades in such a way that this is the best pair to use.

Thanks for your help. RD

[phil838]

Phil, if the price won’t keep going up at least 200 pips above 156.43, that won’t be a good scalp line anymore and we need to remove it, right?
And the R+S line that was broken will stay there as it is an historic line…hope I’m right.

Ben

I think you’re getting S+R lines and scalp lines confused.

You need to remove the 156.43 scalp line now. Scalp lines are only used one time and then they’re gone.

Historic S+R lines are different though. Historic S+R lines stay on your chart even after they are broken, but if you’re going by NickB trading rules then you don’t trade a recently broken S+R line. That’s the “200 pip” rule-of-thumb you were referring too.

Also, remember not to let my sometimes conflicting advise confuse you. When I post about S+R [I]lines [/I]in this thread everything I say is by NickB’s rules, but on my other thread when I talk about S+R [I]zones [/I]those are my rules. I could care less if a S+R zone was recently broken for my method, but it’s important to watch for Nick’s method because of the differnt ways the SL’s and TP’s are done.

[phil838]

Ok, so using that logic I just put 160.35 as my next buy order. Is that about right?

Taking a quick visual scan of the other pairs you are right, it does appear that Gbpjpy trades in such a way that this is the best pair to use.

Thanks for your help. RD

Right! 160.35 is the next line on the upside.

I’m sure another line will form before the end of next week though, so I doubt that 160.35 will really be the next long trade. But it is the next one on the chart right now.

[benji533]

I think you’re getting S+R lines and scalp lines confused.

You need to remove the 156.43 scalp line now. Scalp lines are only used one time and then they’re gone.

Historic S+R lines are different though. Historic S+R lines stay on your chart even after they are broken, but if you’re going by NickB trading rules then you don’t trade a recently broken S+R line. That’s the “200 pip” rule-of-thumb you were referring too.

Also, remember not to let my sometimes conflicting advise confuse you. When I post about S+R [I]lines [/I]in this thread everything I say is by NickB’s rules, but on my other thread when I talk about S+R [I]zones [/I]those are my rules. I could care less if a S+R zone was recently broken for my method, but it’s important to watch for Nick’s method because of the differnt ways the SL’s and TP’s are done.

Thanks Phil, that make sense

I think I also need to pay a bit more a attention for on which thread I am posting. All the threads look like a big one discussion for me cause I check it every time I get an email alarm so I do not go to each thread manually lol :o

Ben

[Roberto_Dinero]

Right! 160.35 is the next line on the upside.

I’m sure another line will form before the end of next week though, so I doubt that 160.35 will really be the next long trade. But it is the next one on the chart right now.

Yes, I thought that would be the case, unless it just carries on up without retracing at all!

I suppose a good rule of thumb is to use the last swing high or low but to include the larger swing high and low points that didn’t get broken as well.

[zekelogan]

Does anyone who’s been trading this method consistently have any stats on consecutive losers or drawdown? All looks great so far, just preparing for ‘those’ times. I noticed some followers had spoken of an unusual losing streak lately & was wondering what exactly defines ‘unusual.’

[phil838]

Does anyone who’s been trading this method consistently have any stats on consecutive losers or drawdown? All looks great so far, just preparing for ‘those’ times. I noticed some followers had spoken of an unusual losing streak lately & was wondering what exactly defines ‘unusual.’

The most detailed records of this system can be found on Metalhawks blog at forex4noobs.com/blogmh. Just hit the “2008 stats” and “2009 stats” links at the top of the page.

His records haven’t been updated since May and the losing streak was in June though. It was, for me at least, a 6 trade losing streak.

I’d define unusual as 4 or more losing trades in a row for this system.

[zekelogan]

Thanks Phil.

…checking it out right now.

4-6 sounds VERY doable. Easy on the ego…

[coolpixel]

Hey Phil838!

Many thanks for bringing to attention the Nick B method. Since venturing into forex a few months ago all I do is read, read read. In the end, certain pieces of info tend to repeat themselves, one of which echoes here too - make it simple, scrap indicators and learn to trade on price action. I think with the right indicators e.g. for trending, they can be useful and even though I’m new I’m no scalper and have absolutely no interest in it - 4H and Daily time-frames suit me just fine! I would like to know about approaches and simple strategies as they also seem to stand the test of time. Recently I came across a strategy called ‘3 Ducks’ - I’m sure most traders already know about it but it’s a perfect example - one SMA set at 60 (I believe), confirmed on 3 charts…etc
Anyway, great site and forum, have a good Friday everyone!:):)

[zekelogan]

I’m finding that I use moving averages on the daily charts to see what other traders may be thinking. You know the 34ema & 200sma are HUGE trading points for institutional folks.

I obsessed over indicators for a full year, and I think it’s necessary. It shows a newbie a visual of what overbought/oversold & rally/range conditions look like.

Essentially they’re off my charts now, but in my head I can roughly picture where a stoch, cci, rsi, macd, etc… would be while watching price action, and I think that helps. But also, by removing them it allows my judgement to guide me, rather than a colored squiggly line. Plus, their behavior in live markets can be extremely unnerving.

Sorry to get off topic, but it does temper the NickB style.

Hope that helps!