Hey guys, I have been in search of a scalping strategy, something that is simple and requires minimal indicators, I am just looking to take 2 pips profit per trade, I got a spread of 0.3 and $7 per lot charge, so I still profit with 2 pips.
I have been testing with fractals and the TMA indicator.
I have backtested this a good bit on EURUSD on M1 charts and 99% of trades turn out winners, and I have been forward testing it for the past week with success.
Here is my setup.
[B]Indicators[/B]
TMA Madlen - Settings 56, 6, 2.5
Bill Williams Fractals
[B]EURUSD M1 Only[/B]
Red arrows indicate a sell. I only do sell orders by the way, no reason, I just feel more comfortable selling…
Open sell on break of candle AFTER fractal, so Fractal candle, signal candle, then open candle (3rd candle is the candle we open on).
What I would like to know is how can I make this better, how can I gain more pips, say we hit a 5 pip run, is there any other indicator I can use to tell me how big the move could be or the strength of the move? Maybe that is asking for the holy grail, but any ideas would be appreciated
TP is 2 pips
SL is above previous fractal (I know that may be 6 pips, but, it very rarely gets hit, and I can get about 10 - 15 trades per day with this, making about 20-30 pips daily.
Sorry to dissapoint you but this system wont work.I already tried it, fractal strategy laggs 3 candles. 5 candles backwards and 2 forwards + must wait for the current one to close to its 3 in the future.That means that by the way you get the signal the price already moved 3 candles in that direction so its very low chance that it will continue, especially on M1 where a microtrend is only 4-5 candle.So you should redesign your strategy on high timeframe, it will have a better win rate trust me
Scalping is a lot of fun and very rewarding if you know what you are doing. Unfortunately you see the drawback which is somewhat devastating if you don’t give it a break.(of course this might be only true to me but concentrating with such high intensity just blasts life out of you not to mention all those psychological aspects).
Now the best way to back test anything is to install Forex tester 2 or similar softwares that recreate market conditions for you and let you trade as if it was live.
I have been testing this strategy on demo for the past week, and it is working, I always hit 1 pip TP, and 99% of the time hit 2 pips TP, thing is, costs, it costs £5 per 1 lot, and with 1 pip, I made £6 profit, so basically I only get £1, which, well is not worth it in my opinion, which is why I am aiming for 2 pips or more.
Hey Kasravi, I use MT4 and just load a non working EA and play the text in visual mode at the speed which it really happens and I watch for setups I would trade and see how they work out.
That’s the thing, using a software that has tick data loaded with actual real time floating spreads and trading facilities where you would place trades with a history will make a difference in any present or future evaluations.
But since you are trading it for a week and made money then I wish you the best!
:rolleyes::rolleyes: This is the classical “1 pip system”, here it goes again.Let me explain why you will fail.
You see, i dont know what stoploss you have , but lets just assume its like 50 pips.Which is 1:50 Reward risk, now, for this system to work, you will need exactly “[B]99.9989%[/B]” [B]win rate (to just break even, for good profit even bigger)[/B].I just calculated it for you, which i dont think you can have, otherwise it will fail in the long run.Dont believe me? Calculate it yourself and you will see, math is never wrong.
Lets take a nother scenario 1 pip takeprofit and 10 pip stoploss, then your winrate should be atleast “[B]99.9910%[/B]” [B](to just break even, for good profit even bigger)[/B], not that much of a difference, but yeah, pretty unrealistic ey? Not that, if you can achieve so high win rate then applauses for you, if not then better rethink the strategy.Just an advice.
EDIT: The calculation was made with 4 decimal precision, so the margin of error is ~ 0.0001% that means that i`m pretty sure that you have a 99.9999% chance of failure in the long run, if you dont achieve that high winrate,which is practically impossible anyways
OP said his profit is 2 pips and and usual SL is 6 pips. So he only need 75% win rate to break even. Lol. Very different. don’t be so negative. OP don’t listen to negatives like this.
[QUOTE=“Proximus;557353”] :rolleyes::rolleyes: This is the classical “1 pip system”, here it goes again.Let me explain why you will fail. You see, i dont know what stoploss you have , but lets just assume its like 50 pips.Which is 1:50 Reward risk, now, for this system to work, you will need exactly “99.9989%” win rate (to just break even, for good profit even bigger).I just calculated it for you, which i dont think you can have, otherwise it will fail in the long run.Dont believe me? Calculate it yourself and you will see, math is never wrong. Lets take a nother scenario 1 pip takeprofit and 10 pip stoploss, then your winrate should be atleast “99.9910%” (to just break even, for good profit even bigger), not that much of a difference, but yeah, pretty unrealistic ey? Not that, if you can achieve so high win rate then applauses for you, if not then better rethink the strategy.Just an advice. EDIT: The calculation was made with 4 decimal precision, so the margin of error is ~ 0.0001% that means that i`m pretty sure that you have a 99.9999% chance of failure in the long run, if you dont achieve that high winrate,which is practically impossible anyways :p[/QUOTE]
Negative? Im just being realistic dude, im saving him of like 3-4 weeks of dissapointment.The math never lies.Ok lets calculate the 2/6 scenario then, i`m sorry i didnt see that it was only that.
So 2/6 is 1:3 RR, which means 75% win rate? In your dreams bro.It all depends on the margin of error, yes if like the margin of error is 0.1% then it may be only 75% but since its a scalping method and you will trade atleast 10.000 trades with it (if its so good as you say) then i’d use 4 point precision.
With that being said, on 4 point precision you need 99.668% to break even with 4 point precision.That means that you have a 99.9999% chance of losing if you dont have 99.668% winrate with your system.Its just that simple :).The solution would be to reverse it, use higher reward than risk, like 2:1 or 3:1, it would help you more.
I’m just talking about the numbers provided. It is wrong to say a 50:1 RR requires 99.9989. In the same way a 1:2 RR requires a 50% win rate to break even, a 50:1 requires a 98.03% win rate to break even.
Yes because the trades are not random, its not like after every 3 win trades there will be a losing one.There will be times when 99 consecutive winning trades will happen and there will be times when 3-4 consecutive losing ones will happen.Even if you play the coing tossing game, not after every tail will a head follow.It is mathematical statistics and there is a thing called standard deviation, where the unique outcome will be different by the average outcome by x*σ value.I could teach you a class of math but i`m not into it right now, just to know i did 2 years of statistics in college so you cant beat me with this.
If it would be that easy that after every 3 winning ones a losing would come then you would be a billionaire by yourself because you would skip every 4th trade because you would know in advance that it would be a losing one haha :18::18:, thats not how math works trust me.
Ok you need to settle down with the statistics. Lol. You are not using them correctly. Lol. 2 years of basic statistics is required for any engineering degree. Yes I have one too. Lol
If you take 4000 trades. You only need to win 3000 to break even. I don’t care what order they come in. Still 75% win rate needed.
No but that function is not continuous, it doesnt have a limit, or to be precise it has 2: 0 and 1.That means that you cant know that after n throws with the penny what you will get, its total random.But to have an edge you need 50+%, and then you will have a limit if you cheat 1 coin and bet on that always, in the end the balance will tip on that coins favor.Same in trading if you dont have an edge you are ****, to be sayed nicely.You goal is to make that system so good that you tip the balance in your favor.
So if you think that 75% is needed for a 3 win 1 lose situation, my answer is yes, 75 is needed to be at 50% like at the coin, 75+ is needed to tip the balance forever in your favor.But the funny thing is that, you dont trade only 1 set of those, you trade many many trades, lets say 100.000 in your whole lifetime.Now if you add up, since 75% is the actual limit of that function which is in eaned only at infinity, so if you trade infinite trades then you need 75%, if you trade only 100.000 then you need alot more.
