Shroomheads Scalping Log

Beginner Questions
21

An error this morning has cost me most of my small gains so far, timing is key with scalping and I got it wrong today. Not sticking to the system properly was the problem, I need to pay attention to the turbo CCI. I’m not having a good week, although the account is technically still in the green.

I’ve also had a couple of BE trades, one which saved me yesterday and one which made me miss out today. That’s the thing with tight stops I guess, it’s double edged.


edit: oh yeah the turbo cci needs to hook over 100 to play a 0 bounce, what was I thinking with that trade? Blinded by the strong up move I think.

-6 pips so far, let’s hope the afternoon fairs a little better.

Edit 2:
Patients is definatley the key. There were other small trades to be made today but after the loss I wanted to wait for a very strong oppertunity. I finally made an excellent trade after hours of waiting, +9.3 pips & +£60.20 (1.2%) for the account. Below is the trade at opening, including SL and TP, and the where I took my profit, right at my TP.

22

Interesting that you think there are no scalpers here. :slight_smile:
“purplepatchforex” is one, I am one for a few years already and posted the system too. There was a time when lots of us where scalping, I guess it comes and goes.
Some of us are or where using Oanda since they had .9 spread but that was then this is now. Oanda is bad in the meantime, either the platform crashes conveniently on there end (java) or the spread is going up to 10 or both.
I am still full-time scalping, same system, just adjusted a bit for the spread and got used to it too. :slight_smile: Also, over time you find “YOUR” style of trading, once this happens, you realize you are on your own and always will be.
Babypips is the best learning site there is. So keep on going.
Happy Trading Oskar

23

Hey Oskar, its always nice to see another scalper. I didn’t mean that the site is totally absent of scalpers, just that they appear to be few and far between (at least on the newbie island). Babypips seems to have a dominant number of fib and s/r traders in my opinion (which isn’t a bad thing), we need to bring scalping back.

I’d be interested in reading about your scalping technique, if you’re willing to share.

24

Another frustrating day today, no trades to report so far. It wasn’t all my fault, the market was mean to my system this morning and gave nothing for about 4 hours. Then 2 trades came along and I failed to take them again, I’m at my wits end! I’m suffering from a total trading paralysis just as I was edging closer to going live with this method, I really don’t know what to do!

I think I’m going to re-evaluate my trading strategy a little, I’m only going to look for one type of trade, the CCI hook trend continuation (no divergence trades or trend line breaks). I’m going to couple this with the ADX indicator so that I only take trades which are in a strong trend. Trading example:

I know chucking on an extra indicator is not a particularly wise idea, but I think I need the confirmation for the time being. The ADX will go once I get back on form (unless it proves extremely useful). I really need to solve this physological problem I’m having and fast.

On a more positive note I’ve found an updated CCI indicator which sends an alert every time the turbo and main CCI cross the 0 mark, Double CCI with Alert.zip (5.91 KB). No more staring at charts for hours waiting for a crossover :wink:

25

Just a quick note, I’ve been following this with interest ~ I’ve decided that I’ve got to learn a bit of scalping first for the quick learning feedback that it provides, as I won’t really know if I’m good or bad at swing trading until 2013 or 2014… probably best to get good at Something and then move to longer timeframes.

I tried my hand briefly at MoneyNVRSleep’s system, but this one is a bit simpler… I may go back to studying his if I can get this one down.

Ultimately I’d like to just cruise along for months at a time like gasanvill but I’ve backtested it, and found that backtesting by hand on a simulator is maybe… within 5% of real trading for me, basically, enough to learn coarse strategic methods but not really enough to hone that last bit of real market edge. Perhaps this isn’t true for everyone but after the 80th trade in just one hour, slamming through years at a time, after a while it’s sort of like playing Fallout New Vegas. Died? Go back to checkpoint and try again… of course forex isn’t like that.

26

well longer time frames are supposidly easier to trade as trends, candles and S/R are all stronger, with short time frames scalping (especially M1) there appears to be a lot more “random” activity and you have to content with the spread. So I wouldn’t say short time frames is the best place to start before moving up to longer time frames, it’s probably the other way around.

I only trade M1 because i’m too impatient and cowardly to trade 15M or 1H, I like to be in and out because I like taking profits when I see them and cutting losses really quick. I’m not trying to put you off scalping, but just be aware that it is difficult.

I think the best idea to learn scalping is just open up a demo account and get cracking. The benefit of scalping is that you won’t have to wait around all day to make some trades and make some progress. Feel free to PM or skype me too if you want a brief walkthrough of my thoughts/technique, I’m quite happy to share.

Whilst I’m here i’ll post 2 of todays trades.

Only 6 pips, but that’s plus 0.73% on the account. :slight_smile:
The second trade was a break even.


(edit: bummer I just looked back at the chart and the price reached my TP target, damn!)

By the way I have now added major psychological price levels on to my chart to use in conjunction with my system. CCI divergences at these levels will be taken as counter trend trades with the next price level as the profit target, standard trades occuring around these levels will use the price level as a SL. Example:

I’m going to write up a PDF of this system so that I’ve got a hard copy for myself. I’ll post a copy here once it’s complete.

27

Looking at your charts and location I presume you are trading during the working day in the UK?

I’m in California which leaves timing a little challenging for that (I do need sleep) though I do tend to catch London Open late at night (for me). Any sense of when this strategy is effective? Asian session doesn’t seem to have enough price movement, generally.

I’ve rebuilt your setup in MT4, well, just using the basic CCI so far and have managed my first “CCI hook” scalping trade, on demo of course. Ironically, also, while waiting for setups I’ve finally managed my first semi successful VSE trade a la purplepatch on the London Open that just went by… though it was a countertrend one so I’m not sure it qualifies.

You’ve got a lot of great material here; my main enemy is local distraction. But once I’m out of stupid question territory (as defined by: stuff you already have written up, that I didn’t manage to simply soak up by reading it) I’ll definitely try to bring something to the table.

Simplicity really has been key; I’ve tried to absorb everything that ICT has been teaching, but it’s like Thai chili ~ so many subtle flavours that it’s easy to get not~quite~right when you are trying to make it yourself. VSE makes a lot of sense to me as well but I couldn’t see a clear setup for weeks, until recently. Also Gasanvill’s stuff, which I nearly wore my forex simulator out on, but my personal ‘holy grail’ is actual, confirmed, successful, consistent live trading. Which requires a little bit faster feedback than the daily charts. And it seems you’ve just about done that on demo.

The interesting question: would this system scale to greater timeframes? If so, experience rapidly honed in the tough world of scalping could apply to a more relaxed, longer term, less stressful trading experience over time. I’m thinking of breaking out the simulator once I get good at live scalping, to see. Though it may be a while before I’m good at it.

28

Yes this strategy definatley works on longer time frames as the theory behind it, ‘price exaustion’ (that’s what I’m going to call it anyway), appears at all time frames. Pullbacks and divergence reversals appear on every time frame, so using this tactic on a high time frame would be quite easy. Take a look at todays M15 and the recent H4 chart, plenty of trades using CCI hooks and divergences.

And you are right, simplicity and is definatley the key. VSE is a strategy with some sound logic behind it and Gasanvill seems to have a working strategy too. To be honest there are lots of strategies which can make money from forex, but success depends whether or not it suits the trader who has to press execute. :slight_smile:

29

I’ve had another frustrating day of trading today, it’s getting to the point where I seriously want to give up. I lost 1% on the account today and even though the account is still in profit I’ve failed to make anywhere near enough trades or pips to meet my targets. I’ve only made a measly 1% in a whole week, which I have previously been making easily in a day.

Something is seriously wrong with my trading at the moment, but I can’t for the life of me figure out what it is!

edit: I just made another stupidly quick decision based on my own frustrations, down goes the account again. Time to walk away, have a beer and forget about forex for the day.

30

Very sorry to hear you had a bad day; it strangely coincides with a rather remarkable run of CCI ‘hook’ scalp successes on my part. Maybe I just got lucky… I did do a few that I expected to fail (against trend and so forth) and sure enough those generally did. Hooray for demo…

Of all the strategies I’ve tested so far in the last number of months, this has been the most immediately successful. And I think I can explain why. The ‘why’ has to do with the graphic representation of something that I can’t see so easily on the candle chart: a depiction of momentum on two CCI timeframes. Yes, that information is in the candle chart, but it just plain processes faster if you can see it separately, even within the last several seconds of the chart.

For the math wonks out there, it’s about like seeing a plot of a function, the derivative of the same function and also the second derivative. Sure, all that information is in the curve of the original function. But it’s so much easier to see and understand instantly when separated out.

I’m not personally worrying about my demo account balance now; it’s a bit of a red herring to me at this stage. What I am doing with it is seeing if I’ve actually learned anything, and am not afraid to try variances and learn from them. It will take time to get good at this, I think.

The experience recalls that of learning to ride a motorcycle; at least a fast one. Like forex, one slip will wipe you out, likely permanently… and there isn’t a demo mode for a Kawasaki. I spent many a day in quiet streets, and months of extreme caution. It all paid off later on. Wherever you end up with forex, Shroomhead, you’ve likely inadvertently helped me as much or more as any expert on this forum and didn’t realise it. I’m finally getting some immediate traction and solid rapid feedback from my trading.

31

Interesting that you (and the strategy) should be having a good day whilst I’m suffering, there’s definatley something going on in my head!

You’ve hit the nail on the head, this is exactly why (in my opinion) this strategy is quite easy to pickup and still has a high success rate. Data which would usually require extra analysis (and ruin your scalping ability) is laid out for quick interpretation.

It’s nice to know that I’ve been of some help. If you ever make a million don’t forget me :p.
Anyway, keep up the good work.

On another note I’m going for a 2% target today and giving myself 3 1/2 hours to do it in. Lets see what happens :slight_smile:

32

Best of luck! I’m up way late myself but about to turn in ~ if I make a million I won’t forget you! But, don’t wait up late on that one, it may take a while…

33

Ha I think I need to rename this thread, how to ruin an account in an hour.

I’ve never traded so badly in all my expierience; took impulse trades, ignored everything I’ve learned over the past 6 months and completly forgot about my system. Today I could have given a lesson in exactly how not to trade. This has been coming though, I’ve been growing increasingly annoyed at my trading this past week and a bit and the rage definatley boiled over today.

I’m done with trading (at least for now), I need to have a long hard think.

34

Tossing in my two cents of recent experience here ~

  1. I found that trading anything that wasn’t a strong trend was somewhat disastrous.

  2. Trading a strong trend has allowed me to do very well with this strategy. As in: 14% gain per night on a good night (London Open is midnight for me).

  3. I’m highly encouraged. In fact, I think I’ve ‘got it’ ~ and wondering what the catch is. Well, the catch is: you’ve really got to trade during the right conditions.

So the question for me wasn’t so much how to trade, but, what are the right conditions and what do they look like?

I went a bit indicator~mad in order to rule out bad trading conditions.

First thing I did was lock the scale of my chart to four minutes by 5 pips per square on the chart, no matter what. Scale really, really, really matters as it’s impossible (for me) to scalp EURUSD during most asian sessions with the CCI, the range is simply too small compared to the spread.

To further clarify things I added Bollinger bands just to give a sense of when the range was too tight. No other reason; I just look for it not to be a narrow channel.

And… what was a trend? I added Cleopiptra’s GRaB colors and 34 EMA wave to the chart ~ this kind of nails things down so I know if there’s a clear trend there. Solid green, or solid red, then that’s a trend. Pretty mixed colors? Don’t trade. Anything even remotely not steep, don’t mess with it. Do something else.

Finally, the one I don’t have a good indicator for, is the whipsawing, though I’m sure there has to be an indicator for it somewhere. Lots of whipsaw? Don’t trade. This one is really critical. I’m using a 5 pip emergency stop, but about a 2 pip ‘mental’ stop ~ Oanda won’t allow a stop that small.

What does ‘small enough’ whipsawing look like for decent trades? Well I caught an image of it, the nice downtrend in this picture here (presuming I can get this to load).

This trend, and another similar one the same night from a few days ago netted me 14.4% in 17 trades over about 2 and a half hours, just catching the downtrends. 14 gains, 3 losses, 48 pips or so to the positive. And during that two and a half hours I wandered off a few times.

I’m not sure how important the indicators are, in good conditions like in the graph. Perhaps any basic strategy would work then?

So far, this has been my ‘big break’ in forex studies. I’m going to try to repeat this over and over on demo until I get really competent at it. Probably for some months. I am rather surprised at being a ‘scalper’ ~ and even more so at the ‘indicator soup’ ~ but the pretty colors and lines help a slow thinker like me to clearly identify the ‘stay out!’ times.

Perhaps as time goes by this will apply on larger timeframes. Much thanks to Shroomhead for introducing the CCI method here. For some reason it clicked with me, though I wouldn’t call myself good or disciplined quite yet.


35

hey Desmond, firstly I’ll have to congratulate you on managing 14.4% in 2 hours, keep up the work like that and you’ll be rich in no time :smiley:

On a more serious note you’re right about having to find the right conditions, if you look back at most of the trades I posted previously all the “hook” trades I took were in trending markets or formed after a lower/low or higher/high (signals of a developing trend). Whipsaws were a problem i found too, I just sat them out once I saw the candles going a little nuts. Divergences and CCI trendlines breaks add some nice variety to the mix, but if you’re profitable with just hooks then why bother.

I think you can easily spot trends with the eye, MAs are too slow and unprecise in my opinion but if it’s working don’t change it. Also notice how the 14pt CCI stays red in a downtrend, that’s more confirmation of a trend too.

So now I have a few questions for you.
Firstly, are you trading multiple currencies now (17 trades in 2 hours is high for one pair i think)?
Secondly, what’s the exit strategy?
And finally, what sort of lot size are you trading? The reason I’m rethinking M1 is because with decent sized orders (say 1 lot) you are likley to encounter slippage when trading live compared to demo. Thus further eating away at those little profits (combined with the spread) and adding to the risk. If we can’t get bigger orders filled quite quickly we’ll be stuck making £10 a trade forever lol.

If you’re interested in where I’m going with the CCI I’ve upped the timescale to M5 (although sometimes i switch down to M1 for a closer look) and I’ve added pivot points to the mix in order to give me some targets. The main thing I don’t really like about the old style was the “shooting in the dark”, the old strategy had no real profit target so it was difficult for me to judge when to take the pips and when to let the trade run a little longer. You could also be walking right into major resistance and not know it, so I’ve found them very useful at guaging trades. BBands were ok, but it rarely ever rode a move all the way up.

Now I’m looking for CCI hooks with the trend or divergences coming off pivot point areas, combined with price action so thats tripple confirmation. The next mid or major pivot point is my profit target as that is where we are likley to encounter resistance next. I’m also keeping my eye on daily lows/highs and double tops/bottoms too. The benefit of M5 is that you can fetch 2 or 3:1 risk reward, take some time to analyse the charts and fill bigger orders without worrying about slippage or the spread so much.

Here’s an example which netted me 5% in 15 minutes (25pips):

Anway, keep up the good work and please let me know of your progress. :slight_smile:

36

To demonstrate a little more here are my two winning trades for the day. I also hit my SL hit for a 2% loss because of a foolish error which I won’t bother posting, so overall I’m up just under 6% today.

[B][I]GBP/USD divergence bounce off DS1[/I][/B]

My top tip for risky counter trend trades, get in quick so that you can manage the trade for a small profit or tiny loss if you turn out to be wrong and keep your stop tight just in case the move pulls back on you fast.

[B][I]USD/CHF CCI hook at mR1[/I][/B]

Just one or two trades at 4% each (2:1 risk/reward) should keep my account nice and healthy, I’m going to be picky but look at multiple currencies to give myself some choice. I’m calling it a day as I’m up a good percentage, hopefully my trading is back on track now. :smiley:

37

Well, that 14.4% was a combination of good market conditions perhaps more than anything; I was expecting maybe a few pips but in a strong trend sometimes price just starts moving in the right direction no matter what you do…

I’ll try to answer questions as best I can:

>>Firstly, are you trading multiple currencies now (17 trades in 2 hours is high for one pair i think)?

That was all EURUSD on what was basically one big downtrend over something like 2.5 hours, in the middle the trend paused and went the other way for about 10 minutes (kind of out of its ‘channel’) and so I quit trading for about half an hour. I didn’t really know what to think; I thought it was done at first but then saw the steep good trend continue.

>>Secondly, what’s the exit strategy?

Well, that’s a very good question. I sort of went with the philosophy of ‘you can’t go broke taking profits’ so my target is generally a few pips past the spread. So maybe 3 or 4 pips. Or even two, if it’s sort of paused there and might go the other way. What happened though, is that it gets to 3 or 4 pips positive and then just goes 5, 6, 7, 10, 15 pips… and when it paused again for a while I got out. Anywhere from a few seconds to say a minute of pause.

On the ‘bad’ side ~ if the trade went negative a couple pips I just plain got out, fast.

>>And finally, what sort of lot size are you trading?

I’m on Oanda demo, so I was at 30,000 units, 3 dollars per pip, at 50:1 leverage. That was nearly all the margin I had. I should know how many micro lots that is, but I’m embarrassed to say I don’t off the top of my head. That’s probably a warning sign of… something. I should know that stuff cold before I go live. Oanda allows ridiculously small trade sizes so I don’t have to worry about ‘one lot, two lots’ kinds of problems and I have been taking advantage of that.

One other thing, and this may sound a bit ridiculous but it’s sort of how I work ~ I didn’t trade a couple days ago because I was tired, and then last night I didn’t trade because I ate some candied pistachio nuts and… I don’t think they agreed with me very well. If I’m not feeling tip~top, alert and in the mood for trading, I’ll go do other things. Like sleep, generally, or any other sort of responsibility avoidance I can manage.

Here’s a picture of what the trading looked like, and you’ll see I had one go against me in there ~ it went against me a few times, but the overall trend saved me. I wouldn’t even think of trading counter trend, and you can see that I tended to trade only a bit away from support, or once it had kind of punched through support. This is on the ‘left’ screen (I have 3 monitors with an ATI Eyefinity) and my mt4 with all the colorful stuff and indicators on the right screen. In the middle screen I’ve usually got a browser up or a video game or something, or if feeling rather responsible it’s my business accounting.

severaltrades.jpg700×413 43.7 KB

38

Ha I should really hook up my other monitor too, just need another DVI to VGA adapter.
Really really nice scalping there, waiting out the pause and then nabbing the movement with the trend. You can’t go wrong with that. It’s almost like breaking the pullback “resistance” to go short again with the trend, I’m impressed. :smiley:

What we should do is come up with some criterea which really help identify times when a strong move is in progress and create an alert. The 34pt MA is probably a good start. Then we could simply wait til we hear the beep and get our scalp on :slight_smile:

What time/day was that on EUR/USD, I’d very much like to have a look back on my charts.

39

Looking back at my trading log, it was right after I’d somewhat trashed a fresh demo account I’d started that evening ~ I was helping my oldest son with physics homework and stuff, which meant I wasn’t paying attention, then I noodled around with it thinking: this will never work… then a bit after midnight I got serious again when it seemed a trend might be forming. I’m in California, looking at my Oanda logs (California time I believe, Oanda is reporting the same time on the chart right now that my phone is) that was 17 Oct 2:23 when I started, then I stopped at 3:00 because the trend broke, then the Oanda chart posted prior was something like 3:34 through 4:16. Yes I was a bit excited about it and stayed up past 4am. I won’t be doing that every night. Well, maybe if it makes me > 5% a night I would.

I’d give better charts, but what happened was by the time I thought to screenshot it later in the day, the minute chart had scrolled too far on Oanda, and I only got the second half.

This reminds me, my ‘lot size’ was actually down to 2 and 2.5 dollars per pip in the beginning and wasn’t at 3 dollars a pip until later, as I was able to increase lot size pretty fast with the gains.

I was using that double CCI indicator and used its alarm. Some were obvious no~trades (I won’t trade against the trend unless I make a mistake) but some were looking pretty likely. At 14 solid gains and 3 small losses, the odds of that being pure statistical fluke seem relatively low… I tried it again a day or two later and gained another 3%, mainly because I didn’t have a good trend and also perhaps because I had two shots of spiced rum in some juice that night. Went down well with all the indicators!

Trying it a third time I got a bit ****y and tried to trade a sideways market to see what would happen. Result: you are far, far better off to trade intoxicated, than in bad market conditions. This, I think, is my crowning achievement when it comes to research results.

I’m still a bit bleah due to whatever was wrong with the candied pistachio’s, and I think my younger son might want another Starcraft II game later tonight (he is already of sufficient skill to wipe me out if I play Protoss on any map) but certainly, I’m focused upon this scalping thing. My tentative goal is to prove (or disprove) its effectiveness by say, 1 Jan 2012 or so. And if not good enough at it by then, I’ll spend more time at it. I am in absolutely no hurry. Eventually I’ll try a 100 dollar real account and see what that’s like. By the time I get to serious cash, I’ll already have a solid idea that it will go well, based on real evidence. Going slow now, means less demoralisation and less money lost along the way…

40

At It Again…

Net result, up 5.4% in half an hour, six trades, all winners (though some just barely) and I made myself a cup of peach sherbet and ate it during the retracements. Trend may continue tonight, I don’t know but I’m sleepy.

This is just across the London Open ~ I’m terrible with GMT when tired but here in California it’s Friday 21 Oct, 12.20 AM as I write this.

This was a better result than my entire month of July (about 4% gain) accomplished with 1/100th the pain and using far less ‘smarts’ … just money management with a decent headwind, really.

I’m going to try to post some graphs.

Oanda, on left screen:

5point4oanda.jpg700×423 51 KB

Mt4 of same trend on the right screen:

5point4mt4.jpg700×437 57.8 KB

What the demo account did.

5point4percent.jpg700×211 24 KB

This may be small potatoes for the big players here, but to me it’s a very big deal. Repeatable Consistent Progress!

A few more nights of this and perhaps it’s possible to rule out “lucky” … well that’s the hope anyway.

Shroomhead, I don’t know about the rest but this has been a ridiculously useful thread to me. Would be interesting to see if anyone would get the same results. Or maybe they do and just aren’t the sort to post on forums much, perhaps.

Desmond does a happy dance, and decides to get his sons in on this if things continue to go well…