I had the idea to post a thread of this nature after visiting forexfactory a while back. I was always told to trade higher TFs as a beginning trader, I don’t beleive I’m any less of a beginner now than I was before however I’ve come to the point where I’ve found my niche. I just CANT trade longer TFs.
Before I move on further, I’d like to put a disclaimer out first. I AM IN NO WAY CLOSE TO BEING A PRO, as is evident by my failure of a first try going live. Almost a blown account but I’m not going to try and play it off.
I screwed up
Furthermore, I have decided to place this thread here in the Newbie section because it is not a system. It is not a set method. Instead I hope to enlighten some of the new traders, and even some that have been around for quite a while, that trading LOW timeframes is possible. If this ends up not working, it’ll be some proof that is VERY HARD to do so…or that I just suck at trading in general
There is [B]NO SYSTEM[/B] in this thread. I’m looking to hopefully find other traders who dabble with 1 minute charts and see how they trade.
[B]I will be posting regular trades and go through why I took the trades after I get through explaining what and how I trade[/B]. Most are based on technical analysis if not all. On such short time frames I stay away from fundamentals, including news releases. As I’ve learned the hard way, it is to stay out of the news times.
In the following posts I will go into more detail with my trading style and in the coming days will begin to post trades I have taken.
For those newbie’s who’ve heard of scalping and want to give it a shot, may I suggest you take everything here with the grain of salt. Be familiar with what you’re going into. Do not go live right away and expect to be profitable.
I’m not going to say I have the BEST way of trading, because it is far from it. We’ll see if through the course of this thread whether there is a way to trade profitably on the 1 minute TF.
Acronyms I’ll frequently use in the thread to make things easier:
[B]TF[/B]: Timeframe
[B]EU[/B] EUR/USD
[B]UJ[/B] USD/JPY
[B]BE[/B] Break Even
[B]SL[/B] Stop Loss
[B]TP[/B] Take Profit
[B]S/R[/B] Support and Resistance
[B]MC[/B] Master Candle
(I’ll add more to the list as they come up)
Now that the little intros are out of the way, lets get to the meat.
If you want to scalp, you need a few things in general; the specifics are left to the individual trader:
A broker that allows it (Scalping policies)
A broker that allows it well enough to be profitable (spreads)
An understanding of price action and what candles mean as they form
I use Oanda. I’m not saying you SHOULD, but their definately better than most. Yes their charts stink, but when all you’re looking at is naked charts, you don’t need much more.
In the previous post I stated only two acronyms which referred to currency pairs. This is because both with Oanda have LOW spreads and move during the time of day I trade.
I look to trade when the European and North American Markets open. Specifically between 06:30EST - 11:00EST. Both allow ample trades during the day.
The above graphic is an idea of the setup I have on the monitor. 1 Main chart, 4 sub charts. I’ll explain their nature/use to me in the next post.
This chart is used for deciding the direction of the trading day.
Setting it up.
This is how I set up the chart to become useful to me. Not everyone needs to but it can provide quality trades with this extra step.
First I go to the Daily TF and plot major S/R Lines.
Then to the 3HR TF and plot major S/R Lines.
Then down to the 15MIN TF and plot major S/R Lines.
With these major lines marked, I can move this chart to the 5MIN TF where I watch the move of the day. This helps to show the outlook for the day, while also give ample time to view possible breaks of the major S/R lines plotted earlier.
THIS IS THE ONLY USE for the chart, trades are not taken from the 5M, only on the 1M Charts which I’ll explain in the next post.
I view price action from these charts. The image posted is what I watch for the UJ, the exact same is also used for EU (See the 3rd post for complete setup image.)
The first of the charts is a 1MIN chart with no indicators i.e Naked. I find most of my trades placed from here.
The second chart is zoomed out a little with the Ichimoku Kinko Hyo indicator placed overtop with settings 7, 22, 44. I know that is not traditional but Oanda had it preprogrammed and I read somwhere that the traditional numbers used are based on a 7 day trading week. I’ll have to find out where I read that.
Both of these charts are used together to help me decide whether a trade is worth entering or whether it is safer to let it play out.
I think I’ll leave it there for now for people to comment and tomorrow when I’ve got some spare time I’ll post how I choose where to enter, criteria for entry/exit, and TP/SL numbers targets per trade.
I trade two main types of price action which help me enter a trade. Both of these still require a feel for the market and if there is no [B]MOMENTUM[/B], I don’t take the trade. This is another major reason I only trade in times when the market is most liquid. There’s no need to wait 10 - 15 minutes to close a 2 pip trade when it can be done within seconds.
I’ll state here, my daily pip targets are quite low. I only look to take 5 pips total profit per day, no more. Greed is a forex trader’s nemesis, if I can stick to this it’ll be great training for sound trading. Each trade targets 0 - 3 pips. If the market moves quicker than I can close, more profits are always welcome :p.
Now, the key to trading this and making money is leverage. I would like to thank [B]PurplePatchForex[/B] here in specific for opening my eyes to the power of this. A system which has a high probability of winning coupled with high leverage does NOT need 30 pips a day or more. Hence I target low pips but stay highly leveraged.
[B][I]ENTRIES[/I][/B]
The first entry to watch out for is the [B]MASTER CANDLE[/B]:
Master candles are formed when a major candle with much movement (including wicks) forms, and at least 4 following candles are within that candle’s wicks. The breakout of this major candle (Master Candle) is the trade. As soon as price breaks, a quick finger with the BUY or SELL button can net about 1 - 4 pips in a moving market within a few seconds/minutes.
To help this method be a little better with probability of winning, I only take the breakout in the direction of the 5 minute trend on the MAIN chart. If there is a ranging market, I look to jump out with even 1 pip profit. Again, any one of these trades are invalid if I feel there is not enough movement/momentum to take the trade into profit quick enough.
The second entry I look out for regards S/R Lines. These are either the lines I plotted on the 1Day/3HR/30MIN charts, or they are intraday levels I deem to be MINOR S/R throughout the trading day. Take an example from this 5MIN chart of today’s UJ chart:
The [B]yellow line[/B] represents the line I felt would be a level that if reached and crossed, there would be a trade possibility. Just so there is more understanding to this, the line was plotted at 07:00 on these charts. I wait for the slight retrace for me to consider it possible for a break and continuation of the previous move/trend.
Now, these will form later in the trading day, after some movement has occured. The nice thing about these is that even in a trend (I use the term loosely), there are slight retracements. As we know a trend moves in waves. Once a slight retracement occurs, essentially I’m looking for the trend to resume. The last swing high/swing low of the trend needs to be passed for me to enter.
At times of trading, I may approach lines which were plotted from much higher timeframe. These need more caution but can yield many many more pips. Some of these may even create extra volatility so I only trade S/R breaks, and not S/R retraces.
May I suggest 2 threads that are excellent if you want to scalp.
MMTT from Ruilima22 and Petefaders MadScalper.
Yes, I also use NickB’s MasterCandle on any of my charts.
What I don’t use from MadScalper are the pivot lines, they crowd the chart too much.
Instead I have the MTF from Rui system on the chart and the BBstop. I got a different BBstop that has a built in Alarm too and it makes the line thicker, otherwise exactly the same, I overlaid them.
This is the setup in MT4, M5-chart, but the trading is done in Oanda.
The chart on Oanda is always set to 1H timeframe, so, before I trade I can see the general trend too.
I don’t want to intrude in your system, it’s just what I am using live. Thanks and I apologize if anybody disagrees with me.
I hardly ever take trades BASED off these charts so why have them up? The main reason is just some extra confirmation on the trades I may take on the 1MIN naked charts. The ‘‘cloud’’ on Ichimoku charts represents a S/R ZONE. These zones help me filter out when a trade is worth taking or not.
Above the cloud, I look for LONG.
Below the cloud, I look for SHORT.
Within the cloud, I will NOT trade.
Since the cloud is a zone of S/R, a trade may go either way, and especially when scalping highly leveraged, I don’t like seeing minus numbers.
I’ll mention here I haven’t fiddled with SL and trade without them. Mainly because I watch the trade all 3 minutes it is open. If I see it not going in my direction, I close it immediately usually around 3 - 4 pips in the wrong direction.
Not at all this is meant to become a discussion on scalping and LOW TFs so feel free.
I’ve actually followed both you mentioned and tried them both out. I’ve collected a lot of different pieces from many systems and ideas and put them together to what works for me. So far this is the better trading I’ve been able to do.
Are you a scalper also or do you find home on the larger TFs?
I am intrigued by the idea of using master candles on such a tiny TF. That certainly would be one way to do it, taking into account other variables as you do.
I posted the link below in another scalping thread that got no response, but would like to know what you think of it. I was checking out various scalping threads - and videos on YouTube - and found this from BKForex called Big Bar Scalping.
They have a YouTube video (click here) that describes the strategy, working off the 5m charts.
I forgot one thing I use iSession and underlay it for trading hours. DarkBlue is the time 2Hrs before NY and NY, Blue is the London.
I post 2 charts, the first one is the working horse one, the second one is just to show the TF iSession.
I am Scalping even down to 1 pip (very seldom) but whenever I am in a trade, I let it run till I get the opposite arrow of the BBStop.
If it is above the MTF from Rui then it will be his Countertrend.
The volume I like to see too, but the Stoch I actually could do away with it.
I see the use of that strategy, I’ve definately seen this in the markets actually but never really thought of how to make use of it.
Only reason I may stay away from this for a while is because news is really what moves those candles. Past few times I’ve traded the news I’ve been horribly wrong and have kept myself to NOT trade the news. Not to say I won’t, maybe this is something one could employ during those times when news is out, though depending on spreads at the time of the news release it may still be hard to trade.
I’ve tried scalping with many indicators before but I just like the simplicity of having things clean. Too many items too check off on the checklist puts me off haha.
Thats just me though. How long have you been trading the way you do now?
I tried my first big bar scalp earlier today on GBP/JPY. I was only going for a TP of about 10 pips, but it really took off and I let it go to +60 pips. I thought it might continue to the mid-boll on the 4-hour chart so I’d let it ride after moving the stop to BE. But instead it fell back and I ended up closing it at +14.
If one could get the hang of it, scalping with larger lot sizes is where the money is at for us po’ boys stuck with micro accounts.
I actually started January with the MadScalper system and stayed with it. Then Rui came and I just integrated his BBStop and MTF into Madscalper. I was not to happy with the Pivot lines. They crowded the chart too much. At the same time I like the M5 chart with some sort of S/R lines and the MTF’s are just perfect for that.
So I actually still mainly trade the MadScalper system and it works for me. Was looking into PurplePatch system too since I was intrigued to have just a system for Oanda but I don’t get the “hang” of it.
Yeah it’s lower than other brokers who offer 100:1, I’m using 50:1 right now. In terms of margin per trade I’m using 90% of available margin per trade. Managing only one trade at a time.
