Easy Eyes Renko

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.

AS I SAID ABOVE. THIS STOP LOSS METHOD IS ONLY FOR WHEN THE CANDLE FINISHES OUT OF YOUR FAVOR DIRECTLY AFTER YOUR ENTRY CANDLE.

Attached Image (click to enlarge)

ANOTHER EXAMPLE LIKE THE ABOVE POST

Also I said about a 5 pips range. I said that because anything below 5 is too choppy and too fast. I stay between 5 and 10 for currencies.

This chart is to show you how the small losses are acting.....near that 200 exp. Once you get a small loss/breakeven/spread loss and you get another signal not too long after and its near the 200....be leery.....it may act the same way again. I would not trade them depending on how quick the signal comes again.

Attached Image (click to enlarge)

Also as I said before. Let 5 consecutive candles or greater be the leader for the system, BUT if you can look back a little on the chart and see 4 consecutive candles being the better consistent flow, you can use that cautiously.

Here we have a good full chart of information to explain. We had one good trade then things went against us. Lets say for a beginners sake, you took all 3 of those losses without one possible break-even and a trade that was near the 200 shortly after a loss....you see the two wins at the end???? This system allows you to take out a couple losses with those moves at the end....even if you have to close the trade after you hit 20 pips in profit.....it cancels those losses out...we were initially down 25 pips with the first win and 3 losses after.....the last trade is all money. Nice money pips.

The above post is education to show you that when you have these smaller losses....you have to learn that this system WILL ALWAYS have pips that deduct from your trade even if it is a winning trade because of the exit method........this is why YOU HAVE TO cancel out those little losses when you can....also the above post shows you the entry on the second 4 candle pullback...the reason we would ok 4 candles is because the previous move had a 4 candle pullback....it is showing consistency.

If you feel there is something to increase the odds of this strategy feel free to post...the only rule is, keep it simple. Trading doesn't have to be complicated. We just need little edges and small odds in our favor. And I will manually back test your added info.

Error

I am also testing a method where we would get one candle in our favor and and then would need 3 candles to stop us out above/below the entry candle the and if price moves back we HAVE TO take the break even....but after a 2nd candle finishes in a row(3 of same color including the entry candle)...the regular rules apply for the spread loss/break even....I will test this.....it may have promise to keep us in trends better. We will see. I will post some pictures on this test because I'm noticing price likes to range a bit before moving up and down. A break even or spread loss may be better than blindly exiting with a loss.....hopefully it works out.

all these areas show where we could have been profitable or break even instead of using the one candle out method....need to test more. These would have been small losers/spread losses guaranteed with the one candle exit method.......interesting.....lets keep going.

update.....just noticed the third box from the left would be a breakeven spread loss following the new rules.....didn't want to update the image.

I need to clarify the new method i'm testing....3 below the entry candle to stop us out.....testing.....these could have came back and took profit or break even....

As you see we follow the regular exit rules when 3 candles form off the entry candle in your favor.....the new rules being tested allow a breakeven or profit when we don't get the 3 below/above the entry candle. No blind exits.

I will also have to test fast price moves and how the candles form for entry because we need to get in on that first candle or near it. We should have time seeing 5 or 10 pip moves don't always happen in a flash.....but sometimes.....We need to make it perfect. Having more instruments to trade always is a big help.