Hello friends. Big Phil back with a possible strategy to keep it simple. I have moved away from my heiken scalping strategy to test this one. My heiken scalping is working good, but this may have more promise from my back testing. I'm looking for the ultimate scalping strategy to go along with my regular TMS system that allows me very little screen time. Boredom will get to you sometimes. This is a manual backtest. For some odd reason tradingview doesn't allow back testing of renko. What are the keys to this system?
200 exponential ma
Low Spread
Renko Boxes that are adjusted to 5 pips. Depending on your broker and charting software you may have to change the currency price size as I do on tradingview to get a 5 pip box for different currencies.
We only trade up above the 200 exp. We only trade down below the 200 exp.
We need 4 or 5 consecutive boxes in the opposite direction and then a reversal candle to finish in the trend direction. I say 4 or 5 because you have to analyze the chart to see what is more valid from the past movements. If unsure; just use 5.
We don't trade the reversal candle when we break the 200 exp
We CAN trade a bounce of the 200 exp as long as it doesn't break above/below
If we enter a trade and you get a candle that goes AGAINST you and FINISHES DIRECTLY AFTER your entry candle, we need ONE MORE candle to finish against you to confirm the stop loss. I say this because it may be a range. If you have the chance to get out break even or a small profit after the first candle finishes out of the money. Take it. But ALWAYS follow the profit candles. Don't blindly exit if you are in consistent profit.
If we enter a trade and we get a 1 or MORE candles in our favor after entry, the above rule is gone. You look to take profit/break even/small loss if the opposite candle finishes.
Also, if you lose a trade and are moving toward the 200 and get another signal to enter. Do not trade it. It may be a continuation of the trend against you.
Now a small bit on the psychology of the system and trading in general:
The more price moves in one direction without a pullback....increases odds of a price reversal. That is the whole reason behind waiting for 4 or 5 consecutive candles. When you incorporate above and below the 200 exp. That increases the odds also from following the long term trend. The key is being able to enter right after that first candle finished. If you can't catch it. Don't trade it. From my manual backtest; it seems that this entry method allows you to get out break even/small loss/profit. I'll be posting pictures to help with the visuals. But it is a very simple system that helps to put odds in your favor. I have not traded this method with my money yet, but it looks promising. Feel free to post negative or postive information on the system. I'm looking for a reliable scalping system to go along with my TMS system.
And here is the SECRET to this system. unverified but manual back tested. You will get ALOT of breakevens/spread loss with this. If you get a couple spread losses look to take profit to even youself out. either take the profit instantly or trail the winning trade with the spread amount. LOSSES will not be big. winners will always be bigger than the losers with this system. Don't let the price move against you if you can take the chance to even your spread losses out with 8 or 10 pips ect......
UPDATE: Look to post 16 for a possible upgrade to the system.
200 exponential ma
Low Spread
Renko Boxes that are adjusted to 5 pips. Depending on your broker and charting software you may have to change the currency price size as I do on tradingview to get a 5 pip box for different currencies.
We only trade up above the 200 exp. We only trade down below the 200 exp.
We need 4 or 5 consecutive boxes in the opposite direction and then a reversal candle to finish in the trend direction. I say 4 or 5 because you have to analyze the chart to see what is more valid from the past movements. If unsure; just use 5.
We don't trade the reversal candle when we break the 200 exp
We CAN trade a bounce of the 200 exp as long as it doesn't break above/below
If we enter a trade and you get a candle that goes AGAINST you and FINISHES DIRECTLY AFTER your entry candle, we need ONE MORE candle to finish against you to confirm the stop loss. I say this because it may be a range. If you have the chance to get out break even or a small profit after the first candle finishes out of the money. Take it. But ALWAYS follow the profit candles. Don't blindly exit if you are in consistent profit.
If we enter a trade and we get a 1 or MORE candles in our favor after entry, the above rule is gone. You look to take profit/break even/small loss if the opposite candle finishes.
Also, if you lose a trade and are moving toward the 200 and get another signal to enter. Do not trade it. It may be a continuation of the trend against you.
Now a small bit on the psychology of the system and trading in general:
The more price moves in one direction without a pullback....increases odds of a price reversal. That is the whole reason behind waiting for 4 or 5 consecutive candles. When you incorporate above and below the 200 exp. That increases the odds also from following the long term trend. The key is being able to enter right after that first candle finished. If you can't catch it. Don't trade it. From my manual backtest; it seems that this entry method allows you to get out break even/small loss/profit. I'll be posting pictures to help with the visuals. But it is a very simple system that helps to put odds in your favor. I have not traded this method with my money yet, but it looks promising. Feel free to post negative or postive information on the system. I'm looking for a reliable scalping system to go along with my TMS system.
And here is the SECRET to this system. unverified but manual back tested. You will get ALOT of breakevens/spread loss with this. If you get a couple spread losses look to take profit to even youself out. either take the profit instantly or trail the winning trade with the spread amount. LOSSES will not be big. winners will always be bigger than the losers with this system. Don't let the price move against you if you can take the chance to even your spread losses out with 8 or 10 pips ect......
UPDATE: Look to post 16 for a possible upgrade to the system.
Make it as perfect as you can....
