What are you looking at when you trade?

Trading Systems
1

This is my GBPJPY scalping chart.

I look to take advantage of the volatility and the spread.

I enter a trade and immediately enter my TP at 5 pips.

This means the price only has to move 5 pips in my direction rather than 5 + the spread for me to make a profit.

The TRO MULTI METERS in the upper right hand corner show me the trend in various ways.

I compare the price to the open of the current candle, the HEAT, the open 5 candles ago, the WMA(6) and the WMA(240) on 9 time frames.

For this scalp, I use the M5 and H1. It is foolish to trade against the H1 and if you do, it must be a quick scalp.

I leave lots of pips on the table but I would rather be in/out quick then be exposed to the risk any longer than I have to.

The Blue dots are dynamic support and the Red dots are dynamic resistance. I can trade reversals or breakouts at these levels. I usually prefer the reversal trade. Look at the chart and you’ll see why. I wait for HORIZONTAL support or resistance and the appropriate candle color to enter the trade.

I have the moving average lines displayed just because that helps me see the “waves” (thanks to jjrvat).

The trend lines are plotted automatically and help keep me on the profitable side of the trade.

The HEAT is my trigger to trade. If the previous HEAT bar is red, then I want the current HEAT bar to be green for my long entry. Vice versa for short. Of course, I coded an indicator to sound the alert when this condition happens.

The Price Compass tells me where price is in relation to the daily open, current & previous day’s midpoints and whether the price had made a higher/lower high/low. I usually like to trade with the day’s candle direction.

The Range Compass tells me the hourly range, the average hourly range over the last 24 bars, the high and low range, how many times the range has been above/below the current range and average range in the last 24 bars. I use this to sometimes squeeze out more pips when I am scaling out.

I showed you mine, now you show me yours…LOL! :smiley:

2

Do you use any type of filter with the Heat indicator like trading with the trend etc? I’ve been messing around with it a lot. Do you look for only “bright” red/green candles to look for entries or will any color change signal an entry for you?

I guess I had just been focusing on this for longer time periods (1H 4H). Since I don’t really scalp FX is there anything you would suggest managment wise for longer time periods?

3

The “filter” would be my multi meters as explained above.

Just need the color change.

But for longer swing trades you might want to remember the squence is:

red > dark red > yellow > dark green > green.

So you might enter long from red > dark red and short green > dark green.

Waiting for any green to any red would be a safer confirmation but might cause you to enter later.

4

This means the price only has to move 5 pips in my direction rather than 5 + the spread for me to make a profit.

I don’t get it … how do you avoid the spread? If you buy at 203.50 and the sell price is 203.44 and you set a TP at 203.55 … you still have to wait for the sell price to go up 11 pips to your TP, right? What am I not getting?

Also to get that red-green bar thingy at the bottom of your charts, I need to email you?

5

I trade with Online Stock Trading | MB Trading Direct Access Brokerage Firm

They are an ECN. THERE IS NO FIXED SPREAD IN FOREX. Tell them THE RUMPLED ONE sent you.

You can google and find out what I really think about “FIXED SPREAD BANDITS”.

I’ll leave it at that so I don’t get banned.

How do I avoid the spread?

I explained this to someone yesterday in an IM.

With EFX you pay a commission rather than having a “FIXED SPREAD”.

It’s “apples and oranges” so don’t try to compare. “THE MATRIX HAS YOU” and you need to “FREE YOUR MIND” to understand what I am about to explain.

Let’s say the current bid/ask is 1.5010 x 1.5015

The current spread is 5 pips.

You want to SHORT.

You SHORT at 1.5010.

You set a TP at 1.5005.

Bid/Ask becomes 1.5005 x 1.5009 and the current spread is 4 pips.

At EFX, you will get filled if the bid is 1.5005 and someone TAKES your offer.

Bid/Ask is now 1.5004 x 1.5009 and YOU HAVE YOUR PROFIT.

Note: the ASK never reached 1.5005. THIS IS IMPORTANT!

If you entered this order at a FIXED SPREAD BANDIT, whoops I mean broker, your order is STILL OPEN!!

The bid/ask must become 1.5000 x 1.5005 and your order HITS the Ask.

DO YOU GET IT?

If not, then read this over and over and over again until the LIGHT BULB goes off!!

The day I found out about EFX is the day I opened an account there and stopped trading with FIXED SPREAD BROKERS.

6

Still don’t get it. I understand that you are trading with en ECN, so when you SHORT and the set you TP at 1.5005 then the Bid becomes 1.5005. Fair enough. However, why would the Ask move to 1.5009? Maybe there is something I still don’t understand about price movement. Can you explain that part?:confused:

7

The simplest thing to do is to load up a demo account at EFX Group and see it with your own eyes.

I really don’t know what you are asking.

When you place your TP Bid offer at 1.5005, your bid is displayed on Level II.

The point is with EFX your offer gets hit.

With FIXED SPREAD BROKERS you have to wait to hit their offer.

8

Maybe this might help:

First:

1.5010 x 1.5015

and price drops…

1.5009 x 1.5014

1.5008 x 1.5013

1.5007 x 1.5013

1.5006 x 1.5012

1.5006 x 1.5011

1.5005 x 1.5011 You may get hit

1.5005 x 1.5010 You may get hit

1.5004 x 1.5009 YOU COVERED 5 PIP GROSS PROFIT

AND LET’S CONTINUE

1.5003 x 1.5008

1.5002 x 1.5007

1.5001 x 1.5006

1.5000 x 1.5005 YOUR FIXED SPREAD BROKER FILLS YOUR ORDER.

Does that make it clearer??

9

OK I get it. Thank you. Now, what about the comission you have to pay with ECNs? How much is it? Is it a % of each trade? Really don’t know how that works. Sorry about asking so much but you know… noob.:smiley:

10

EFX: Experience Forex Freedom <<<< This is a link to their commission page and it should make it pretty clear.

11

The commision varies depending on the pair trading.

It is $.50 per 10k minilot on USDJPY. So if I gross 2 pips, I am making money.

From the EFX site:

[B]
Commission Rates

Fixed spreads are a way for FCMs to markup or markdown the best bid or offer. FCMs do this to hide their fee into the price of the currency pair instead of displaying their best quote. Common sense tells you that no one works for free, so when you see an FCM claim they have �no commission�, that should be a red flag. So how are they getting paid? Its simple: they are making money with the built-in markup/markdown in the spread.

Our FCM, MB Trading Futures, has nothing to hide. They offer tighter spreads with no markups/markdowns and openly display a low commission rate.

Commissions are based on total dollar amount traded: $5 per $100,000 traded.

[/B]

12

I found this at FF which I found a good read on the subject:

Market Makers & ECN�s, Is the grass greener?

I think I’ll stick with my broker until I get to trading live and then trading live somewhat consistenly…then look more at ECN and the real trading world if it will make enough of a difference.

:slight_smile:

13

Perhaps if you move to an ECN you’ll have a better chance at showing a profit.

The FF thread about ECNs is somewhat slanted. Anyone using a market order when trading must be in a panic!! If you use a LIMIT ORDER, then your order gets filled at YOUR PRICE or BETTER!! No reason to use a market order and be at the mercy of the market.

Why do you think slippage occurs in the first place? Because they can when a market order hits the market! They flash a price, you enter your order only to the see price move away from you by a pip or two… SUCKER!!

May I suggest you reread my long post above until it hits you like a [B]TON OF BRICKS[/B] when you should NEVER trade with a FIXED SPREAD BROKER.

14

Ok, what I think you are saying is that with an ECN broker let’s say you short at 5010 & want to buy back at 5005 for 5 pips profit.
So from the moment you short sell, you now want someone to buy these back from you for 5005. As the price drops, the bids/offers drop to 5005 and you COULD get filled because since your offer is out there someone may sell to you at that price, if the price drops below 5005, they certainly would sell it to you at your 5005 price…
So the spread is not important, it is just supply & demand between individual traders … instead of the regular broker not allowing the trade to be closed until the “right” side of the bid/ask spread is met.

EFX is a subsidiary of MB Trading, I have had an account with them & they are very customer oriented. I see they charge a fixed $5 per $100k traded & it looks like they only do full lots.
For mini-lot traders, this could eat up your account rather quickly but for full lot traders it is a lot more reasonable than paying 3-5 pips per trade which is in effect $30 or more.

I’m still trading minis but when I build account enough to trade full lots, I would certainly take a look at them … also important is speed of executions, especially around news time. I already know they are honest & their customer service is good.

So when you are trading for 5 pips with a $5 commission, your net profit is $45 per trade. I take it you do this multiple times per day?
Again, wouldn’t work for mini lot traders.

15

NO!

It DOES WORK FOR MINILOT TRADERS.

You can trade as little as 0.1 lot which is a $1k lot.

A mini lot is $10k which is your $100 cash at 100:1 leverage.

A full $100k lot is 10 minilots.

Sometimes, I do it multiple times PER HOUR…LOL!!

Once again, on the USDJPY, I can gross 2 pips and make money. The round trip commission is $1 per minilot. A 2 pips GP on one minilot is about $1.97. So I would net $.97.

P.S. 4xStar… I’m down in Tucson, AZ. Did you know the EFX offices are in Scottsdale? You should stop in and check them out.

16

Hey thanks, their website did not make it clear that mini lots can be traded. Yes I know they are located in Scottsdale, I live there (& have some friends & relatives in Tucson) but I’m in Annapolis at the moment.

I’ll give them a call. How do I get your colored bar indicator? I have the other indicators loaded from the kreslik dot com/forums site. I want to start testing this next week.

17

Annapolis?

I hope you’re dining on crab!!

18

At least twice a week … usually in Ego Alley :smiley:

19

I was really hoping that others would share a chart or 2.

Or does everyone have “top secret” charts? LOL!

20

OK, will give this a try…

The 2 indicators on the 15’ chart (in addition to the sweetspot one you gave us, rumpled, which are the yellow lines) are the T3, purple and the SHI_Channel, pink.
The 2 indicators are attached.

I like to find a trending pair, the g-y is great for this, and then you just wait for the first close above the purple line, go long at next candle open, or first close below purple line, go short at next candle open. Now that I have the sweetspot lines added, can maybe increase position size if they confirm greater probability … will have to check it out in real time next week.

MT4-Indicators.zip (11.6 KB)