On Scalping!

Beginner Questions
61

Seriously I cannot reason out why scalping can be successful in the long run, 10 pips profit, 10 pips stop level, a whiwsaw will stop out the trade easiest, especially in current trading environment.

Again if you are successful, you are the rare few, and I have nothing against successful scalpers.

I am a system trader, usually takes profit at 100 - 150 pips, stop at 80 - 100 pips, success rate is 70% - 75%.

62

With scalping momentum or fast moving trends are the way you dont get stopped out often. If your succcessful 70% and a 1:1 ratio. Your at 2.3 profit per trade. Meaning 100 trades 1 lot 10 pip aims. 230-400 pips

64

You do not have to open if you do not wish to.

65

I PMed you and you send me an invitation to open a live account?!?!?!

Why don’t you just post your system for all to see?

66

Well, all I can say is, for the last month or so, using this system, I’ve been consistent on making 50 pips a day. But it takes a lot of time in front of the computer to do it. I don’t really know what you mean by 10 pips stop level - as soon as I make 8-10 pips, I have a window all ready, and I close the trade. Yes, you have to sit there and be at the ready all the time. I missed two trades (cross overs) by going to the bathroom. That’s the breaks! LOL!

67

I prefer the Eur/Usd. But when it doesnt look like a cross is comming. On Oanda look at pairs with low spreads, like EUR/GBP, GBP/USD, USD/JPY. Those pairs move and the setup I use works for them Remember dont trade against the next larger timeframe.

68

PabloPluto,

I’m intrigued with you scalping strategy using the 3 MAs. Would you mind a few questions?

  1. Where are your entries? Ie… Do you wait for the signal candle to close and enter at the open on the next candle? Or do you jump in as soon as the 3 MAs are properly stacked (possibly resulting in an un-cross by the time the candle closes)?

  2. Is it correct that your TP is about 8-10 pips? What is your SL, or if not a hard SL, at what point do you exit shoud the trade go against you?

  3. How long have you been using this strategy successfully on Oanda. I’m currently with MBT, and am getting annoyed with the commission. I see that Oanda offers the same spread with no commission. The only thing giving me pause: Oanda’s reputation of trade manipulations. How’s your experience with them for this method?

Thanks for any feedback you can provide.

Dahlia

69
  1. I wait for the candle to close
  2. I aim for 5-10 pips depends on the pip range. My Sl depends on the currency but its usually 7 pips on the Eur/Usd
  3. 2 years on Oanda I have only had problems with Oanda during news time and Sundays. I dont think Oanda manipulates trades but think the are the most reasonable with spreads. When they cant get it cheap you cant either.
70

Thanks Pablo,

As I said, I’m very interested in this method, so I hope you don’t mind me pestering you here. (I don’t see a PM option).

Please see attached. This is my understanding of your system… entry in the direction of the 2EMA if the cross agrees with the bigger trend (I’m using the 50 EMA as the trend indicator as TRO suggested in a different thread). I’m also assuming 7 pips TP and 7 pips SL. The arrows mark the direction, and the color marks whether the trade was profitable. Orange means that I can’t tell if it’s profitable or not from the bar.

This is the EU on 9/12/08. I picked this day because it had many different looking signals and was hoping that you would confirm whether all of these are valid entries. I wanted to be sure, since the results weren’t stellar and didn’t know if I was missing something, or was this just a bad day. I’ll continue to back test as soon as you confirm that I’m doing this correctly. How often do you have losing days? Do you have any way of knowing ahead of time when not to trade so that you avoid days like this? You already mentioned avoiding news, which would make trades C and D invalid (news at 8:30 and 10:00 that day). You also mentioned Sundays. Anything else?

This question is open to those who are using Pablo’s system too. It’s obviously working for you guys so you must be doing something right … :slight_smile:

Thanks for all your help!

Dahlia

EMA crosses.jpg700×372 42.3 KB

71

The 2SMA is has two purposes to tell momentum and to tell when its ending. On this pair I would have made a few trades before noon. Its not a touch they need to cross that would have been about 40- 50 pips before noon. On that pair.

I hope this helps Im willing to help everyone willing to experiment. Sorry if its not clear and sorry I had to use paint to edit it. You may have improvements on it.

I usually get my 7-10 pips and dont let my trades run.

S.JPG700×372 37.8 KB

A.JPG700×372 36.8 KB

72

When the MA are close together I dont trade then because there was a definate trend then when they “vibrate” (up and down real close) there is usually news comming out or a speech or something.

73

Hmm… I think I’m a bit confused about what you mean by “cross” then. Please see attached. I’ve blown up trades A and F so we can see better, and it seems that in the bars you indicated as “cross”, the MAs aren’t stacked in the correct order yet… Or is that not a requirement? By your indications, by cross, do you mean that they just have to intersect at the bar?

Thanks for your patience Pablo. I hate to hijack your thread, but I hope others are benefiting from this too. If you prefer that I “take this outside”, please feel free to contact me privately.

Thanks!
Dahlia

EMA crosses 2.jpg700×572 46.9 KB

74

You are not hijacking any thread or post I dont own it I just started it. Other can see trades. By cross I mean when its in the right order like you pointed out. I do mean the cross not a meet and greet.

Trade A: I was pointing out after it closed that would be a entry. The candle says this is the time to set up your order.
Trade F: I didnt see that one That was MY fault you are right I thought I seen the cross on that candle. I didnt blow this up in enough or I jumped to it to early. I looked and started my fault. I point out the candle that screams its happening. I sometimes jump the gun. (which is horrible)

I’m always willing to help.

75

Thanks Pablo.

I think I’ve heard at least 2 other people trading your strategy, plus me in my early stages… That’s 3 people. Perhaps we can sweet talk you into starting a thread on this strategy so that we can pester you in the correct venue? :slight_smile:

In any case, thanks for all your input.

Dahlia

76

I dont think it needs a thread its simple. I know people who uses it and after talking with them for 15 min there was nothing left.

77

Okay, last questions, I hope:

  1. It seems that you�re discretionary when it comes to SL and TP, which I think is wise since sometimes the market is in tight ranges and you�d be lucky to pluck 5 pips. Other times, a 10 pip stoploss would be taken out before you can even blink. What do you use to determine SL and take profit ranges? Can you please give specific examples?

  2. I think that you said you make about 30 trades per day (5 am-11 am) and averaging about 50 pips per day. However, in my back testing, I�m seeing only about 2-4 valid trades on average per day for the EU (5 am � 11 am, minus prenews trades). Even if I add the UJ, that would be about 10 trades a day at most. Do you trade other pairs too? It seems that any other pair wouldn�t be good for this method because the spread would eat too much of your profit. Are you trading other sessions or other pairs? I can�t find any where near 30 trades per day, even if I toss in the GU for the work hours that you mentioned.

Thanks Pablo!

Dahlia

78

If the last 3 candles are in a 25 pip range I would use 10 pips as a target. if its under 20 I use 5 pips. I get stopped out on about 2-3 trades a day. Its just a warm fuzzy judgemnet that I use. Nothing in specific. The pictures you showed me were over 20 pips in range. What was stated was probably the week when the dollar and euro were in a dog fight. In the afternoon I may trade other pairs if im at home but rarely.

I make on average 10-20 trades a day I dont stick to one currency. My TP has changed to 10 pips it was 5. The Eur/GBP, the usd/jpy, Usd/chf, and the one I use less frequently is the GBP/jpy. Becasue of the spread and my ratio is way off.

I was saying it can be 30 trades a day. I get there maybe twice a month. Thats usually on days where there is alot of movement. Day to day its 10-20.

I think I answered them all but Im typing on my phone t the airport.

79

Thanks Pablo!

I’ll be doing some more testing over the weekend, and if all goes well, I’ll try it live with microlots next week :slight_smile: Thanks for all your help.

Dahlia

80

Well Pablo,

I was hoping to have some good news to report, but I’m actually quite bummed. I backtested this strategy for just the EurUsd, and I’m not getting the results you did :frowning: A random sampling provided the following:

For June 2007: 21 pips profit for the entire month for the EU
For September 2007: 0 pips exactly
November 2007 was especially brutal: 49 pips loss, even if I didn’t trade the holiday week.

I must be doing something wrong. :frowning:

Since seeing what’s WRONG in my previous examples didn’t help, perhaps it would be better if I saw real trades that are done RIGHT. Would it be too much to ask for a record of your trades for these months? You can post it here, or you can email it to me at <[email protected]>. (Of course, feel free to blank out any private info you want. I just want to see your entries and exits.) Your strategy seems to make the most sense to me, so I really want to be able to work with it. It would really help a lot if I can compare your trades with my own and perhaps see where I went wrong.

Thanks for any info you can provide.

81

I will post some when I get back to the states on the 2nd. What time frame are you using. I will look back to track down those months I might have to scan or fax it.