I would like to post my trading system-strategy to give something back and to know what you think about it. I must say that all the information came from hours and hours of forum reading right here at baby pips. So here is it:
SET UP
I only trade with EUR/USD, don’t know if it works with other currencies. (It should but have not tried myself)
I work with 2 time frames. 5 minute chart and 30 minute chart.
On 30 minute TF chart I use a very well known strategy from “james” in which i set up standard PARABOLIC SAR and standard MACD. This is to find out the way of the trend. When SAR is bellow candle and MACD have crossed upward the trend is up, and the opposite for downward trending.
On 5 minute chart I use the EMA’s step system, also very well known on this forum.
EMA (1)
EMA (5)
CCI (20)
LINES DRAW (GREEN BOTTOM (20), RED UP (80))
SLOW STOCHASTICS (14,3)
LINES DRAW (GREEN BOTTOM (-100), RED UP (100))
I DO NOT USE BOLINGER BANDS (Hate them, I don’t know the psychology of it, but the two months they were drawn on my chart I lost money like there is no tomorrow)
RULES (Here is when becomes interesting)
If and only if TREND is UP on 30 TF and an a buying entry point of the EMA step is forming, ITS BUYING TIME.
If and only if TREND is DOWN on 30 TF and an a selling entry point of the EMA step is forming, ITS SELLING TIME.
You can download the specifics of the EMA STEP here: www{dot}mediafire{dot}com/emastep
But remember I DO NOT USE BOLINGER BANDS
I Scalp, against almost every thing I read on this forum I scalp, no shame in it. I risk as much as 30% of my balance on each trade. Now here is why.
When the conditions of the 2 systems meet (an average of 5 per day) there is a 90% chance of the price moving the way you want, only if there is some crazy news the price will go against the system. It will not go this way for ever but after 3 months of testing 90% of the time it goes at least 15 pips, not much pips; that’s why I scalp.
I trade (or better said), I look for signals between 1:00 am to 3:00 am (GMT -5), this is when London opens. And the second time i look from signals is between 8:00 am to 11:00 (GMT -5), this is when London and New York overlaps. At this times the fluctuation of the price its strong enough for our 15 pips reward. I live on Quito-Ecuador, South America, that’s why estrange schedule.
Scalping its a dangerous strategy. My stop loss its also set to -15 pips, and as soon as the price is +5 pips I move my stop loss to -10 pips and so on, because there is always that 10% of the times when you are waiting for the 15 pips and all goes to hell, SO NEVER NEVER NEVER move your stop loss at a higher point just because you want to stay on the wave, THIS IS SCALPING.
The +15 pips of each trade mostly happens in 4 or 5 of candles (5 minute candles, sometimes just seconds) which is basically the ride between the GREEN BAR at (20) STOCHASTICS to the RED BAR at (80) STOCHASTICS (In any direction). If the +15 pips is taking longer or the line has arrived at one of the mentioned lines on STOCHASTICS, consider taking the +10 or what ever pips you already should have and get off the trade, or move up you stop loss. Remember once again if your scalping there is no fooling around waiting for hundreds of pips.
Well that’s basically it. Let me tell my experience with this system. When I started on my demo account 6 months ago, nearly empty the 50,000 fictitious dollars, first just buying anything, then applying systems as I read them, and so on, then a couple of months ago find out that this modified, tropicalized system was the system that better applied to my personality. When I was confident enough I went to the real money mini-account with 200 bucks. I been working on this system for 5 weeks and I already have 4122, so I truly believe it works, with almost no loss if you constantly upgrade the stop loss.
The bad thing about this system is that for the time your trade is ON, you enter a rollercoster of emotions especially if each pip is 25 dollars or more, and you must monitor the trade constantly (GLUED TO THE SIT). The good thing is that the trades don’t take to much time.
Well let me know what you think, or questions, examples or wahtever.
Bye
Happy Scalp Trading
This was today’s +15 pips at 25.00 each pip, got 375 bucks
As you can see on the chart a few minutes after I got off the trade the price went up like a rocket. BUT the thing IS that this kind of lift after it hits the (RED or GREEN) bar only happens 65% of the times. So I prefer to take what I got for sure and don’t look back.
Anakin thanks for explaining your system could you explain how you use the parabolic sar and macd on the 30 min charts before you decidde to go to the 5 mincharts.
The 5 min charts ema step system document is very detailed so I did’nt have any problem understanding the 5 min part
but I couldn’t understand the 30 min part as there was no explanation. You said you use the James system for the 30 min part. Do you mean the James IB system?
thx for sharing the strategy.I wonder if you had any signals at the eur/usd so far today??
although i have a question about the macd on the 30 min.
Lets say you have a sell signal at the 5 min and the psar is above the 30 min candle and the macd is negative but the bars of the macd histogramm dont make lower lows.instead they getting smaller towards the the zeroline and the macd mas are not falling any longer.They turned direction to the upside but havent crossed yet. what do you do in that case.is that still a valid signal from the 30 min?
Btw…I although have it run on the gbp/usd and that looks very good as well.
In such a case I usually prefer not go in a trade. (Like today on the EUR/USD at 10:00 am GMT -5) Because 5 minute chart signal might be a false one, changing the course of the STOCHASTICS in the middle of the fall. Since the method uses scalping, the scenario mentioned becomes very risky.
You can always catch the next signal and is better to wait for when there is not big uncertainties.
As I said before the earlier signal was a goofy one (because MACD where about to close the downward trend). There were some good signals at the middle of the night, but I was to tired to get up at 1:00 am so I miss them :p. I waited for the next signal which just happened. But as you can see on the example I could get only +8 pips out of it. Why? because what I said earlier about the schedules, at this time 12:15 pm GMT -5, the price elasticity ain’t strong enough, so I got off the trade when the STOCHASTICS hit the red bar at 80.
Only +8 pips today, but the good thing is that the system worked, yet another time
I will keep posting examples to demonstrate the system.
What broker are your charts from? It appears that, unless you have edited and pasted, you can have 2 timeframes each with different indicators and appearing together as one chart. MT4 allows vertical tileing but at least my broker doesn’t allow different indicators for the same pair unless I open another account. I am interested as to who allows this. d.
My broker is not responsible for the charts. My broker ain’t bad they gave me good spread, and they response quickly for support and withdraws, but they are technically challenged. They do not use MT4 platform, instead they use a program developed by themselves to place orders. In this program they got some charting abilities but very limited.
So I searched around for a good charting software, I found (here at babypips) a FREE charting software which is very good and allows as much windows as your monitor can handle, each window can have it’s own currency and indicators. But its just for charting purposes. The software is ChartStation, you can look at it here:
Anyways just yesterday I downloaded the MT4 program from Interbank FX, to use it (with demo account) for charting purposes instead of ChartStation since I am looking into the possibility of having the software send me alerts (mail or sms) every time a setup is forming up. ChartStation does not have anything that resembles this idea. I am learning about MT4 programing to do so, since I am a systems engineer I don’t think it will be a problem. However with MT4 I was able to reproduce my charting scheme with out hassle. Two windows each one with its currency and indicators. Here an example of it.
I think you have an interesting system, Do you use any other indicators such as RSi or Stoch to verify the trend as well? IF so what time frame? I am thinking about adding ADX on 30m to help verify the trend. Also do you mainly use the MACD and PSAR on 30m to verify the trend for the 5m ? I mean you don’t use the psar change as a main entry signal, you just make sure that the trend is still there right?
As far as executing the trade do you wait for the candle after the cross candle and do you enter right after that candle opens? Thanks in advance for your response.
On the 30M chart I ONLY use SAR and MACD, and yes this chart it’s not for entry signals look ups. It’s just to find out about the 30M trend. For example, today (right about now!!!) the SAR and MACD are contradicting each other and been acting very weird on the last couple of hours. This is telling me STAY OUT THERE IS NOTHING FOR SURE PLEASE LEAVE !!!.
“I HAVE FOUND OUT THE HARD WAY THAT THIS IS HARDEST THING IN TRADING … WAIT FOR TRUE SIGNALS, LISTEN TO YOUR OWN RULES, DON’T MAKE ANGRY TRADES. IF I HAVE DONE THOSE THINGS I MIGHT BE QUITTING MY JOB AND URINATING ON MY BOSSES DESKTOP BY NOW , SO PLEASE DON’T RUSH THE MARKET WAIT FOR IT TO TELL WHEN TO ENTER”
Well after I got that out my chest, let’s continue with the explanation. I only use this 2 indicators because they are easy to read for me and I try to KEEP IT SIMPLE. If you like or more important TRUST, ADX or STOCH, use those. The main idea is to find out the way of the trade.
As for entry points I do wait for the cross candle to finish. I put my finger on the click button and wait a few seconds, to see what the after cross candle is doing if I like what I see I click IT.
Hope I clarified it for you, If I didn’t ask me again and again and again till you are satisfied.
Thanks for the reply and also for posting your strategy. It has always seemed logical that if one traded candlestick price action then scalping, using a short TF, makes the most sense. So far I have been a terrible scalper but I can demo your strategy and see if I can make it work for me. Thanks again, D.
Thanks for posting your system and the quick clarification reply, I will look into it as one of my main scalping strategies. I like that you watch the candle for price action confirmation before pulling the trigger, too many traders don’t do this. I will also be watching for candle patterns and plotting support and resistance areas on my charts to help keep me out of trouble.
Thanx for sharing your system. it seems to be a truly Holy Grail i wana test it but i have some trobles here , please help me here… CCI is Commodity Channel Index ? if yes how can i draw lines on it ? it dosen’t give me this options… thanx for your suport, i can’t wait to test your system.
Yeap, CCI Is Commodity Channel Index. As for the lines, it depends on your charting software, or the brokers software that you use. I have some experience with the ChartStation charting software and with any MT4. So tell me what you have to see if I can help out.
By the way I am very happy that you like the system, and the enthusiasm is great but WAIT for the right signal, don’t be like me, I used to be very eager to enter a trade which generally developed into a wrong trade. So BE PATIENT YOUNG PADAWAN !!!
I traded this setup on Oanda this a.m. & grabbed +22 pips. E/$=10p; L/$=9p; & E/L=3p. I know the last two aren’t traded by Anakin but the GBP/USD is usually parallel to E/$ and the EUR/GBP is a great ranging pair but a 10 pip TP & SL seems more appropriate. I quit at 10:00 GMT-5 as this was my 1st shot and it is taxing on the nerves, at least for the 1st time. I hope others had some success too.
Oanda does not allow for a 2 window split screen setup like Anakin uses so I just note the 30M trend on a sticky and then switch to the 5M. Seems to work ok that way. d.
, SO PLEASE DON’T RUSH THE MARKET WAIT FOR IT TO TELL WHEN TO ENTER”
if yes how can i draw lines on it ? it dosen’t give me this options… thanx for your suport, i can’t wait to test your system.