Simple Price Action Scalping

Trading Systems Free Forex Trading Systems
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First and foremost, credit to John Kurisko for laying the foundation of this strategy.

Going to share one of the most basic intraday price action scalping strategies out there. This strategy works best on major equity indices and the EURO.

5 Simple Components (in no specific order, b/c they are of equal-importance):
Market Direction (Control)- Prevailing trend? M15 chart = moving averages. Price beneath- want to be a net seller.
X Marks the Spot- The convergence of two patterns. Light blue channel pullback, w/in larger pink descending channel. Convergence creates an “X” pattern. This is the entry point.
Bollinger Band- Std. Deviations tend to produce a “snap-back” effect. Markets are mean-reverting. What that means- sell the upper band.
Stochastic- 2 STOCH indicators. 1) 14, 3, 3 2) 40, 4, 4. Both need to signal OB or OS conditions. Be careful of embedded levels (indicator staying pinned to the upside or downside).
Support / Resistance- Straight-forward, if you see a level break, and the market rally back into that level, look to sell as former support should now act as new resistance.

When everything aligns, take the position. Everything mentioned above (strategy-wise) is specific to this exact style of trading. In other words- “selling the upper band of the BB” doesn’t mean you sell the upper band of the BB 100% of the time while using any other strategy. It means for this specific style of trading, you sell the upper band when everything else is lined up.

Can you see a trade below?

This is the chart setup:
M15 w/ 20, 50, 96 MA. ATR 14. VOLUME.
M3 w/ 2 STD DEV BB, FAST STOCH 14, 3, 3, FAST STOCH 40, 4, 4. SHOWTIMETOEND INDI.

TRADING MONITOR (002).jpg700Ă—394 36.2 KB

HD link to image

Alongside that, you’ll want to watch the DXY or FXCM USDollar if trading EURO (Whatever you can access) for signal confirmation. For equities, watch the JPY and other risk-on markets; your choice.

You need to be quick-in, and quick-out. This is a trading strategy, not an investing strategy. Not going to get into the “why” behind each component b/c quite frankly, this type of trading doesn’t really require that knowledge. It works simply b/c you’re waiting for an edge and putting the probabilities in your favor- especially if you can correlate other major-market moves (i.e. breadth).

Jake

1 Like
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Nice Jake, would make an interesting Expert advisor,

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Tryed making an EA, problem is I have to list at least 15 look backs at Stoch because they dont break on the BB median line at the same time, so I was trying to make the OB/OS static till the cross, I cant get it to work at 5 lookbacks, it didnt do to bad, and that was without the 15M confimation. BUT, Ive never looked at bands before, but testing something out right now that I put together.

I need an EA, Im weak minded, to manual trade without wanting to punch myself in the face 5-6 times a day…

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The funny thing is, the first 24 hours of finding forex back on Sept 26th, 2010, Was to create an EA, because I was weak minded, and couldnt possibly manually trade consistently enough to be successfully over the long haul.

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This strategy requires discretion though- you need to have some fundamental awareness, as well as ability to properly mark significant trend-lines and spot patterns.