Mastering short timeframe scalping

Hi.

I have been checking out different traiding styles on shorter timeframe.

So far i havent achieved the results required to put any system live.

so my questions are:

1: how to spot a tight ranging market?
2: what are the hours where the market tend to range within a tight limit? (non trading hours)
3: What trend is the one to follow, for me it seems logical to not go against higher timeframe trends, but if you are trading 1min or 5min chart, how relevant is the 30min and 1 hour trend? is there a rule of thumb saying to use the trend in the 2 higher timeframes or something like that?
4: Doing backtests it seems like stochastics are really reliable to catch small movements, combining stochs for current timeframe and next higher timeframe, but when forward testing it is not so brilliant, any recomandations on reliable technical indicator to catch small price movements?


I have to admit my patience havent been at top, so i have to blame myself maybe more then any systems.

My questions isnt limited to those over here, but for now, those are my biggest ones.

Thanks

Hi,

I have worked at this for more than five years, and it can be achieved. The answer for me anyway lies in the use of moving averages, combined with MACD, or Stochastic if you wish, but I prefer macd. I'm not going to tell you exactly which moving averages I use because it will be best for you to experiment with them, but stick to round numbers like 20, 50, 100, 200, choosing simple, exponential, or some other. I enter trades on a 10 second TF, and use 1m, 5m, 20, H1 charts to help me with market direction and where to get out. The trick is to wait until you have a favourable set up on the 10sec, 1m, 5m, though the higher frames don't often help with the entry as they can only really help you with the main picture for the day. What I found is that having multiple time frames can be a blessing or a curse, because if you let for example the 20 min or even the 5m chart influence your entries too much, you will end up missing loads of perfectly good opportunities on the 1m chart. I say 1 min chart, because I relly wait for the entries on this chart, and then zero in onto the 10 sec chart to get the best entry that I can. I seldom use more than a 15 pip SL, so a good entry is key. For my exit, I also use the moving averages, either when the price reaches a certain one upon which I have set my TP, or when it looks as if the price may stalling, and narrowing moving averages will help you determine this. Either way, I always try and get something out of a trade if I can, and am a great believer in technical analysis. Like the pilot who flies at night, you have to have absoluter faith in your instruments , in this case your indicators, and try to avoid your ' gut feelings' at all costs. If your indicators are reliable, and they tell you there is more room for the trade to move, then stick with it.

MACD - helps if you are going long, and say the 1m ribbon is rising from below zero, but MACD cannot be used in isolation, it has to correspong to what is happening with price.

One more piece of advice - always look for a favourable candlestick before entering, there will usually be one, and it is what other traders are looking out for. So, for example, if you are about to go long, wait until you see a candlestick that has left a longer wick than its body, the so called hammer, as this is a signal. And if trading off the really small TFs as I do, you have to be quick, no hesitation allowed, because even a moments hesitation can see the price move quickly away from you and out of your risk tolerance range.

Good luck.

Thanks for this ver informative post

you'll have to observe the market you're trading. Most of the times it acts in the same manner because the market maker is the same guy but they are smarter. What's their game - to make money from comissions. Where's most the comission - hedging. How long does it take to buy a scrip and pass it to the next guy - its too short. How long should your scalping trades last - 3mins is enough for me, 10mins if trade has potential.

You'll have fun scalping if you can summon the inner sadist. You have to take my word for it.