Shroomheads GRaB Scalping

Edit: Meh, this probably isn’t the best idea, someone feel free to take it up if your looking for something to do.

Queen Cleopiptra blog post brought the very interesting GRaB 2.0 tool to my attention and I’ve been back testing a scalping technique today which I thought some of you may be interested in. This method is a combination of momentum trading and “box scalping”.

Personally, from my limited expierience with this tool, GRaB 2.0 appears very accurate at judging market momentum and notices changes in trends pretty much as quickly as I can. Using this as a quick identification tool it makes the process of scalping much quicker and easier, reducing the time taken to identify trends and buy/sell signals. For those unfarmilar with the GRaB indicator it displays three colours in place of regular candle sticks which show bullish (green), ranging (blue) or bearish (red) market momentum. Example:

I find this tool works best on 5 minute charts as a 1 minute gives too many false and/or useless signals. Again, as with any scalping strategy, tight risk management is key as the market can move quickly against us which I will explain aswell. Anyway here is the very simple setup and method.

Scalping Grid-
Shroom’s Template- (1.14 KB)

Chart Setup:
Put the GRaB2.0 and Box Scalping Grid in C:\Program Files\MetaTrader 4\experts\indicators (or wherever your platform is installed)
Put my Template file in C:\Program Files\MetaTrader 4 emplates (or wherever your platform is installed)

Then simply load the template in MT4 and you should be setup. To setup the chart manually add the GRaB Candle Long, Range & Short (3 seperate indicators), and the Grid Builder indicators to your chart. Set the grid builder “Grid Space” property value to 100. You will also need to go into charts>properties (press F8), click the “common” tab and make sure “Chat on Foreground” is unticked to get the new candlesticks to show up. Your chart should now look something like mine below.

Trading Positions:

For the purpose of this strategy Green candlesticks are now bullish, red are bearish and blue are neutral regardless of their direction, therefore a few blue candles followed by a green is still bullish and the opposite for blue and red. No trades are made based soley on blue candles as they are neutral. A trend remains constant if the colour goes green > blue > green or red > blue > red but the trend clearly changes if the colours change from green > blue > red, red > blue > green or just red > green, etc.

We ideally want to be trading these changes in colour, green > blue > green would signal us to buy into the continuting trend, where as green > blue > red or green > red would signal a trend change so go short. However this method, just like most others, is prone to fakeouts so we need a filter which is where the boxes come in.

In order to enter a position we must wait for a move to occur solidly through a box (or two gridlines) without any opposing signals. For example if we go long if the price pushes through the box with green signals following a blue or red signal, but no red signals can appear in the box. The opposite scenareo if we want to go short. The .gif and image below can hopefully explain better.

PQ5TD7.gif (1087x494)

Stop Losses should be places at the previous grid level (10pips behind entry) and you should aim to enter the trade as soon as a price hits the grid to maximise the scalp. I haven’t come up with a concrete profit taking strategy for this yet but there are three basics ways to do it.

1 - either set a constant 10 point profit target (seems to hit nearly all the time)
2 - identify levels of support & resistance
3 - stepping stop loss which moves up every 10 points (resulting in break even trades rather than +10 but will have some bigger winners)

I’ll be testing this strategy out next week and post my findings, and if anything doesn’t make sense I’ll happily explain/reword this post. If anyone is willing to help me test out this strategy let me know your results. Finally here is another exampe of the system.

In all honesty 1 to 1 rr isn’t bad but we need to figure out as you said filtering further.
What I notice is every time the price needs too pull back to find either more supply or demand the zone itself seems to be marked by a previous buy or sell signal. Look at box number 3. It provides the force for the bounce of box 4.

Box 4 is a surefire long. However this can be filtered you can see the zone was inverted when the price exited that zone so quickly.

I like I like. Shall be playing with this indi and idea Sunday.

Thanks for your input, glad you like the idea. There is definatley some lag caused by the indicator, which explains what you’re observing. I suppose you could say that the only loss in that example was a sell right on a line of resistance, so some simple S/R lines would help you filter out rubbish trades like that. Still 7 wins and 1 loss is pretty good without S/R lol

Are box 3 and 7 wins with spread?

Guys - do yourselves a favour and don’t waste your time.

Well you’d subtract the spread from the 10 pip wins and add it to the losses I guess.

Love the optimism. Back testing looked promising so I don’t see any reason i shouldnt try it in a demo and see what comes up. If its rubish then testing will prove you right, but I’ve got the time to spare.

I think they would be losers. You would be negative already and have to hit 2 or 3 pips up in the next box for that to close.

Still though, promising.

Any trader worth his salt will tell you the same thing - it’s a waste of time, I’ve been there done that, I’m talking from experience, to put it in a nice clichéd way, what you’ve not learned about this kind of tat yet, I’ve forgotten years ago!

With regards to time to spare, you have no idea how quickly 3 months of daily trading goes while you are tinkering with a system, any spare time you have you need to use it very very very wisely.

Purple I understand the intent. But how else will he learn? Just like everything else its trial and error.

Everyone has to experiment their own way.

Oh yes, but it’s like experimenting with water containers, you could have plastic containers, glass containers, even metal containers, but baskets just aren’t worth bothering with!

Perhaps they would be losers then. This is why a bit of real testing with spreads is required.

Well you seem pretty convinced that this is doomed to fail so I take your advice seriously. Just curious as to why, in your experience, methods like this aren’t worth bothering with?

For instance, look at that first buy there, it’s total garbage, your initial stop loss is going to be too high, it’s a really bad counter trend trade, with a high possibility of it just shooting down from there. You will probably also find that when you run this kind of stuff in real time, the signals don’t turn up until the move has actually gone. The second one again, just the same, bad place to enter and look at the time, you don’t want to be trading at that time, worst time of day. It’s +10 PIP trades with trades that in actual fact require a 30 PIP Stop Loss.

You’re right, its not a good trade. Like I said all I’ve done so far is back test the GRaB tool, no S/R was used to time these trades I was just seeing whether it produced winners or losers to start. You know me (a little anyway) I view S/R as very important so Id definatley incorporate that into any strategy using this.

Well 1 days testing will see if that’s a problem.

Again this is just an overview of the GRaB tools performance without any real human input, good planning and a good trader at the helm would sort out those bad trades.

Perhaps I should have tested the whole thing much more before posting the idea, my mistake. S/R and a daily plan will definatley be required to trade this strategy, just like any other sucessful method.

Remember just because a blue line crosses a red line does.not mean you should be entering the market. It just means certain variables have been filled. Incorporate s/d and candle patterns. Heck even VSA might help you :wink:

Having looked at the MT4 code the GRaB tool just changes the colours of the candles based on candle closes above high, low or close 34pt EMAs. Bah total rubbish. Might make a handy tool for visualising bounces off dynamic S/R levels if you change the code to 10pt EMAs, but that’s probably about as much merit as this tool has imo.

Altered code for 10pt EMAs with a 20pt EMA (black).

I don’t want to waste my time on attempting to create a strategy involving averages.

Edit: Or it can be coded to give a slightly nicer looking version of the origional Madscalper layout.

The best box scalping thread is by Forexcube on FF, and the thread is progressing nicely.

I’ve been reading :wink: