What are the most important features on a Scalping system?
Should the indicators take into account large, short or a mix periods of data?
Are closing prices more important than high and lows? Or for the contrary?
Does momentum indicators have the same importance as oscilators?
And how about moving averages?
How should stop losses be defined? Pip value, % of average price variation?
And how about trailing stops. Does it fit well into a scalping system?
All the help appreciated.
Thank you!
I dont trade with indicators so I cant help you with those, I have a couple WMA’s on my chart but I dont use them for entry signals, I just use them to see where I’m at over a period of time/trend direction.
if I’m trading the 15 minute chart, I look at the hourly (possibly even daily) look for S&R levels, trend lines, etc… I would get my general direction off the daily or hourly, and then wait till the 15 minute goes counter trend, and then wait for it to reverse, after it shows signs of reversal I look at the 1 minute chart to enter, or if its moving really fast (and dosnt matter) I just enter. (If such an opertunity isnt available I do try to trade with just the dominate direction, but latley thats been a bit iffy, with no real momentum)
My SL is at a point which my initial assesment (eg reversal) isnt true, and my lot s are sized accordingly so if its 150 pips away, I may trade only 10 units, if it were 15 pips instead I’ld trade 100 units. The pips away counting a little extra, the exact value that I’m wrong dosnt really matter, it always needs a ‘bit’ extra, how much that is varys dramatically according to time frame, pair, liquidity, market sentiment, etc…
on very short term scalpes/trades (eg 5 or 1 min, possibly even 15 min) a trailing stop probibly wont help you, if your likley to only get 30 pips, then a 15 pip trailing stop would only get you 15 pips, and if it was a 30 pip trailing stop, yould be lucky to break even. OTOH, if you expect the market to make a run for it, then by all means a trailing stop would help you but thats more of a swing trade (which technically is what I do, i guess) not really a scalping trade.
As far as price I look at the entire price action of a given time frame, its open, its close and the high and low (actually I look at what heiki ashi tells me, but when I did use candle sticks… )
I use the high and lows to tell me its volitatlity, and how much room I’ll need is usually told by that. I look at the body of the candles to see how large they are, the longer the more directional it is (usually accomponied by smaller or no wicks/tails) and I look at the overall direction, has it been making higher highs and lows, or lower highs and lows? or is it entering a triangle of some sort?
Hope this helps!