Attachments: M1 Countertrend Scalping Strategy

M1 Countertrend Scalping Strategy

#201
Dec 10, 2022 8:42am Dec 10, 2022 8:42am

charli86
| Joined Jan 2017 | Status: Trader | 816 Posts

Great thread, one needs a lot of screen time to get used to it, if I may, if someone wants to try, apply a channel,ma 200 with this lvls,different for all pairs, and make decision-based on it as well, and apply Abade and cfleger and other guys' approaches as well, maybe can help someone, I am using it and make decisions based on it...If not, move on and forget this post

...All the best

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Make your own rules and stick to it.

#202
Dec 10, 2022 11:31am Dec 10, 2022 11:31am

Abade
Joined Aug 2016 | Status: Trader | 536 Posts

Quoting RieseP

Disliked

Can anyone recommend a good broker for thisn system?

Ignored

- IC Markets is a good option: Low spreads, trusted, 1:500 leverage. The only bad thing is that they may have abnormally high spreads during the weekend. The customer service is not the best neither.
- Blueberry Markets is also a good option, although the spreads are a bit higher. The customer service is very good.

The King uses a standard account (no commision = higher spreads), cpfleger uses a commision account (lower spreads for extra cost per trade). Costs are a VERY important factor when trading the lower timeframes. I personally prefer standard accounts for higher timeframes but commisions may be best when taking a more conservative approach with scalping. It's a tough choice for sure

#203
Dec 10, 2022 11:36am Dec 10, 2022 11:36am

Abade
Joined Aug 2016 | Status: Trader | 536 Posts

Quoting Chucun

Disliked

I'm new to this thread and new to forexfactory. I've been using KOF strategy for almost 2 years. I have both the Full EMA strategy and 1% strategy. @Cpfleger, I like how your indicators look. So glad I found traders alike. KOF is the real deal!!

Ignored

Welcome aboard! Feel free to share your knowledge, variations and trades

2 years is a lot of time! Have you been successful with the original strategy?

#204
Dec 10, 2022 11:37am Dec 10, 2022 11:37am

RieseP
Joined Nov 2016 | Status: Trader | 908 Posts

Quoting Abade

Disliked

{quote} - IC Markets is a good option: Low spreads, trusted, 1:500 leverage. The only bad thing is that they may have abnormally high spreads during the weekend. The customer service is not the best neither. - Blueberry Markets is also a good option, although the spreads are a bit higher. The customer service is very good. The King uses a standard account (no commision = higher spreads), cpfleger uses a commision account (lower spreads for extra cost per trade). Costs are a VERY important factor when trading the lower timeframes. I personally prefer...

Ignored

I normally use IG markets. Low spreads. Only issues is they don’t offer a high leverage. Only 1:30 for indices

#205
Dec 10, 2022 11:46am Dec 10, 2022 11:46am

Abade
Joined Aug 2016 | Status: Trader | 536 Posts

Quoting RieseP

Disliked

{quote} I normally use IG markets. Low spreads. Only issues is they don’t offer a high leverage. Only 1:30 for indices

Ignored

I see! That may be a big issue when applying cost averaging.

If you use Blueberry Markets you can use up to 200:1 according to this info that I got from support:

https://blueberrymarkets.com/support...-do-you-offer/

Hope this helps

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#206
Dec 10, 2022 12:03pm Dec 10, 2022 12:03pm

Abade
Joined Aug 2016 | Status: Trader | 536 Posts

Quoting charli86

Disliked

Great thread, one needs a lot of screen time to get used to it, if I may, if someone wants to try, apply a channel,ma 200 with this lvls,different for all pairs, and make decision-based on it as well, and apply Abade and cfleger and other guys' approaches as well, maybe can help someone, I am using it and make decisions based on it...If not, move on and forget this post ...All the best {image} {image}

Ignored

Welcome aboard Charli86! I was thinking of adding the standard bollinger bands as well. I believe it may work just as good as support and resistance to trigger the first trades. It looks so good in the Dax BTW:

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How would you use the slower band? (200).

#207
Dec 10, 2022 2:39pm Dec 10, 2022 2:39pm

charli86
| Joined Jan 2017 | Status: Trader | 816 Posts

Quoting Abade

Disliked

{quote} Welcome aboard Charli86! I was thinking of adding the standard Bollinger bands as well. I believe it may work just as good as support and resistance to trigger the first trades. It looks so good in the Dax BTW: {image} How would you use the slower band? (200).

Ignored

I am trying many approaches for this method, just a quick example, here if I enter a trade I would get burned, so maybe wait for ema50 to brake the channel and return inside and then trade, also I am watching rsi, using rsi 60 with lvls 68 and 31 for extremes sometimes (this is one idea from a long time ago).....Also, this indicator smbionics candle provides a good picture of the market and the current candle but can give you a lot of burns, try it, maybe you can find it useful....

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Make your own rules and stick to it.

#208
Dec 10, 2022 2:41pm Dec 10, 2022 2:41pm

charli86
| Joined Jan 2017 | Status: Trader | 816 Posts

Attached File(s)

smBionicChart-Histogram_v1.ex4 9 KB | 389 downloads

Make your own rules and stick to it.

#209
Dec 10, 2022 2:45pm Dec 10, 2022 2:45pm

charli86
| Joined Jan 2017 | Status: Trader | 816 Posts

Also,Adabe, the time of the day is vital as we all know, this kind of set ups appears I would say mainly during the NY season, the thing is to find the optimal setup and implement it inside NY window.

Make your own rules and stick to it.

#210
Dec 10, 2022 3:19pm Dec 10, 2022 3:19pm

RieseP
Joined Nov 2016 | Status: Trader | 908 Posts

Quoting Abade

Disliked

{quote} Welcome aboard Charli86! I was thinking of adding the standard bollinger bands as well. I believe it may work just as good as support and resistance to trigger the first trades. It looks so good in the Dax BTW: {image} How would you use the slower band? (200).

Ignored

Abade pivot points and yesterday high/low is even better than BB. You could take less trades and just be more clinical with trades. Dax is really good because it’s a choppy instrument

#211
Dec 10, 2022 3:42pm Dec 10, 2022 3:42pm

Abade
Joined Aug 2016 | Status: Trader | 536 Posts

Quoting charli86

Disliked

{quote} I am trying many approaches for this method, just a quick example, here if I enter a trade I would get burned, so maybe wait for ema50 to brake the channel and return inside and then trade, also I am watching rsi, using rsi 60 with lvls 68 and 31 for extremes sometimes (this is one idea from a long time ago).....Also, this indicator smbionics candle provides a good picture of the market and the current candle but can give you a lot of burns, try it, maybe you can find it useful.... {image} {image} {image}

Ignored

Thanks for bringing this tough breakout as an example charli86!

I want to point out a few things with images:

1) You won't get smoked if you are using cost averaging with small position sizing and the following logic:

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2) GBPUSD chops much better than AUDUSD, that's why I didn't add AUD pairs to the recommended list (compare both charts from the same day and judge):

a) GBPUSD with lots of chops (good):

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b) AUDUSD has more of these linear movements in the lower timeframes (bad):

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Heres an example of a well handled breakout using the original system:

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Those candles you are using look very interesting

. They show price action weakness very clearly, that's a nice addition to the system.

#212
Dec 10, 2022 4:01pm Dec 10, 2022 4:01pm

Abade
Joined Aug 2016 | Status: Trader | 536 Posts

Quoting RieseP

Disliked

{quote} Abade pivot points and yesterday high/low is even better than BB. You could take less trades and just be more clinical with trades. Dax is really good because it’s a choppy instrument

Ignored

I am very grateful for bringing the Dax 30 to my attention. I was scanning it for a few weeks and it chops really nicely!

. To be honest it may be a much better option than the USD pairs (more testing needed).

I agree that we need horizontal levels, BB aren't good enough by themselves, and they lag

(missed oportunities). Although I am a bit reluctant about decreasing the number of setups. I know a clinical approach may work very good (cpfleger) but I like to start with the most aggresive approach and then add refinements to it when needed. Truth is that there is no filter/set of rules that can save a trader from bad entries 100% of the time, we can only get close enough to such goals.

#213
Dec 10, 2022 10:20pm Dec 10, 2022 10:20pm

proprop
| Joined Nov 2022 | Status: Trader | 2 Posts

Hi @Abade,
Thanks for share this interesting method. I am new in forex, still search and trial in demo account.
Just trying some methods using higher time frame, I'm impatient with it.
I laready readd all page and take some rule to try this methode.

Hi @cpfleger
i saw your trade was simple, and profitable.
can you or anyone explain what does the number come from and mean?

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#214
Dec 11, 2022 1:41pm Dec 11, 2022 1:41pm

Abade
Joined Aug 2016 | Status: Trader | 536 Posts

Quoting proprop

Disliked

Hi @Abade, Thanks for share this interesting method. I am new in forex, still search and trial in demo account. Just trying some methods using higher time frame, I'm impatient with it. I laready readd all page and take some rule to try this methode. Hi @cpfleger i saw your trade was simple, and profitable. can you or anyone explain what does the number come from and mean? {image} BR

Ignored

Welcome Proprop!

Make sure you backtest everything before you commit with real money, specially your position sizing in relation to your account leverage and balance. Test at least 200 different setups.

As I mentioned in an early post, I wouldn't use cost averaging in the higher time-frames, that's a lot of time you could be trapped in a huge drawdown (not good for your wallet/mind). I trade the higher time-frames with single position systems.

I am not familiar with the template in that image. Looks like a pip counter (gains?) from a Zig-Zag indicator. I don't recommend the use of Zig-Zag for entry signals as it repaints after the fact, but it's a great tool to study and learn market structure.

Hope this helps! Feel free to post your trades and thoughts.

#215
Edited 2:14pm Dec 11, 2022 2:03pm | Edited 2:14pm

cliffjaded
Joined Mar 2018 | Status: Trader | 224 Posts

Hi,

decided to add to the discussion. Mean Reversion + Averaging is nothing new. There's basically 3 important factors:

Entry - Distance from MA? Bollinger Bands or Envelopes? Change in direction of faster MA (e.g. 5 EMA)
Averaging
1. Sizing - 0.01 lot per $1000 balance is a safe estimate.
  1. Constant - All orders have same lot size
  2. Additive - Each averaging order is increased by a certain size
  3. Multiplicative - Each order is multiplied by a factor
2. Step - Distance between averaging orders. Look at your chart and look for those strong trends where you will get burnt. You can determine your step from there. Or you can use % of daily ATR (e.g. 5%)
  1. Load up evenly at each step
  2. Wait for next signal after next step
Exit
1. Revert to Mean - Return to moving average. If you're using one MA, then it's simple. However, if you're using multiple MAs like in the KOF system, then it becomes more complicated.
  Wait for trend reversal - In the event that loading becomes too heavy and a mean reversion potentially cannot save the basket of trades, one can consider a flipping of MA to convert the counter-trend trades into pro-trend trades. You can consider stacking mean reversion trades again after the MA flip to helps reduce margin and increase balance so that it becomes easier to close out everything in breakeven / profit / small loss.
2. Equity Stop - Consider a hard equity stop like 30% if things really start to go south. It sucks but it gives you another day to trade instead of hitting margin call, or just be stuck in an endless meandering averaging loop. Easier on the psyche. You should be winning most trades, though, so that when the eventual hard stop comes, your balance is still green because you've made enough profit to cover that big loss.

In designing a mean reversion system, you can consider these factors. They will help to mechanise it and make it less discretionary. After that, just use a backtesting simulator to test your system.

Here's one for MT4.
https://www.mql5.com/en/market/produ...lity+Rating006

Here's an EA that helps to do averaging. Entries are still manual though. It's a paid EA (not my product) but you can still test it in demo.
https://www.mql5.com/en/market/produ...er#description

Here's a video that explains the concept of mean reversion + averaging for those who are new.

Inserted Video

Hope this helps! I'll post some charts because I want to try mean reversion again. Have dabbled with it in EA form but it always tends to blow the account but I think that's because I tend to overleverage. Let's see!

Leave the Gun, Take the Armani

#216
Edited 5:43pm Dec 11, 2022 5:05pm | Edited 5:43pm

Abade
Joined Aug 2016 | Status: Trader | 536 Posts

Quoting cliffjaded

Disliked

Hi, decided to add to the discussion. Mean Reversion + Averaging is nothing new. There's basically 3 important factors: Entry - Distance from MA? Bollinger Bands or Envelopes? Change in direction of faster MA (e.g. 5 EMA) Averaging Sizing - 0.01 lot per $1000 balance is a safe estimate. Constant - All orders have same lot size Additive - Each averaging order is increased by a certain size Multiplicative - Each order is multiplied by a factor Step - Distance between averaging orders. Look at your chart and look for those strong trends where you will...

Ignored

Thanks for your input cliffjaded, that's useful information.

I want to point out a few differences between a mechanical approach and how the KoF uses the cost averaging method:

1) Most EA's/Mechanical approaches use the account's equity or optimized grids to determine their exit points (i.e: at break-even or X pips distance win). This is not ideal as the market will never react to a single user's account status or position in the chart. Therefore, these are just random levels, and it's one of the main reasons why these mechanical approaches fail (random entries/exits = random results = account blown, sooner or later).

On the other hand, the EMA indicators used in KoF TRY to represent market-significant/dynamic levels where price may react in different ways such as "bouncing of.." or "seeking/returning to.." (the phenomenon we are trying to exploit). I am not saying EMAs are perfect representations of the "mean" value of the market because they are NOT, but they are a thousand times better than a random point in a chart (i.e. A level based in your own account equity OR an arbitrary risk/reward scheme).

2) In the original KoF system the user is supposed to focus and gauge the market movement using his own discretion and experience with the instrument. This includes gauging the market speed, volume, structure, breakout depth and weakness to know how and when to exit. It's very tough (if not impossible) to code or systematize so many variables in a mechanical system and expect a human-like performance.

3) KoF uses different EMAs because every day/week/month is different and the trader must adapt, even if he is always exploiting the same phenomenon (mean-reversion). For example:

a) If there is a significant breakout, you would expect an equally big pullback that returns back to the slowest EMAs where you would be using recovery trades and targeting the 50 and 200 EMAs.
b) If the market is moving inside a rectangle formation (range), wedge or weak trend you would expect to be making small scalps back to the 20/50 EMAs (this is the most desirable scenario).
c) Some faster/more violent and brief moves are better traded using the 9 EMA as exit!

The truth is that price geometry varies a lot, even when it's totally possible to create these helpful "if-then" schemes for certain actions.

I am not saying that a full systematization/mechanization of KoF is impossible, but it's not ideal because you are losing adaptability and may fall victim to a "fake edge" illusion (risk overfitting) created by the cost averaging method. You may want to combine rigid rules for entries and a loose (discretional) approach to exits to keep such adaptability instead.

Backtest is 100% a must of course. The user must try different markets and entry rules to match his own risk/psychological profile.

#217
Dec 11, 2022 5:56pm Dec 11, 2022 5:56pm