Standard Deviation Scalping Method
I found a Scalping technique called "5-min Standard Deviation Scalp" (pattern #5 in the document enclosed). I would like to know if anybody has tried this technique.
Briefly, on a 5 min chart, you apply a 10 bar moving average and bands 1 std dev on each side. I am using Bollinger Band (10,1).
When the trend is up (slope of the bands), wait for price to dip inside the lower band and then enter long. Exit when price reaches the other band.
When the trend is down, wait for the price to touch the upper band and then enter short. Exit when price reaches the other band.
To make sure the direction of the trend is right when price touches the bands, I use 10EMA close and 10EMA open. If 10EMA close is over 10EMA open, the trend is up when price crosses the lower band. Reverse for down trend.
Sometimes price doesn't reach the other band, but crosses the middle line of the BB. The middle line can also become the exit signal. There are also false signals (fewer than good ones) and I'm not sure about the stop loss. I would think 1XATR can be a good guess since it's all based on volatility.
On the picture, I circled the entry signals. Sometimes price reaches the other band, but sometimes it doesn't, but most of the times it crosses the middle line of the BB.
Comments would be highly appreciated. If you can watch 3 or 4 low spread pairs, the result should be interesting at the end of the day.
Scalp Trading Methods.PDF
I dont see what that PDF has to do with the picture you posted, they seem unrelated. What settings do you use for that Bolly band?
Setup: On 5-minute bar chart, impose a 10-bar moving
average. From this moving average, expand an upper
and lower band exactly 1 standard deviation from it.
Entry: In an up trend, we are looking only to buy the dip that
penetrates the LOWER band, provided the slope of the
bands are still up.
In downtrends, we look to sell the rally that penetrates
the UPPER band, provided the bands are sloping
Profit Exit: Close out for profit on a 2-point gain or it the price
touches the other band,whichever is sooner.
Stop Loss: Take a 1.25-point stop loss or exit at market if the slope
of the bands changes after entry.
A similar thing could be to try envelopes, close, 0.1% deviations, m1, e/u
Might wantput another at 0.16% and 0.22%, take volume and S/R into account maybe.
Coding an EA
Sounds codable, has anyone created an EA for this?
Please attach your template.
Ok never mind i get it
Well from what i can see this doesnt occur very often since the MAs are so fast, if the trend reverses they often go flat or near flat before penetration in oppsite direction of Bands. But it seems to have something to it.
So this is how i made it
Gray MAs are just S/R
I think SL should be about 15 and TP about 10
Take a look, I also used a setup as a touch of the lower (upper) band and the trigger when it crosses back over. The theory is that it has momentum when it comes back.
Also I used a sum of the slopes of the upper, middle and lower BB for the trend determination. I think that is a poor way to do it, so I will be coding a change.. likely an RSI or StochRSI.
Standard deviation bands and Bollinger Bands aren't the same.
I have just completed a search on FF and couldn't find the SDB indi...any ideas whee it may be down loadable?
What do you suggest to use instead?
I will be making some edits so to view the latest you can look here
to use this there is a very nice tool to use
just download and install. You use it from your file browser and see differences, comments, ect... very nice for coders and for users wanting a specific revision.
Cheers, and happy new year!
seeing some promise
I found the iStdev and will incorporate that into the method. These results are with
SlopeMethod 1 // RSI_METHOD
DD: 2.86 on a 10k account
I'll upload this version in case anyone is interested. It will also be available in the location of the previous post with these comments attached.
Maybe any of you would want to put things to the test and work together
Hello, where did you get this ATR indicator on the picture of the first post ? Thanks
ATR in Pips.mq4
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