M1 Countertrend Scalping Strategy

Chucun,
next few days we shall all have access to both of my systems and I do have a modified version of the 1% Strategy too, stay tune...
cpfleger

What is the difference between 1% and ema strategy? Sorry for my foolishness

It's a trend following strategy by the KoF. I know little about it, but here it is:



The EMA strategy is the one we discuss here: Mean reversion back to the EMAs in the lower time-frames + cost averaging money management.

Here is another video where he explains a little more:



What I understand from it (may be wrong): He has used a lot of indicators in his trading life and knows when to fade them for signals instead of following them directly, a process that would let you get into a new trend. You open a fan of trades and wait for a strong move in your favor. You are supposed to understand the EMA strategy fully to get this one right as it's supposed to be a more advanced strategy that requires a deeper knowledge/feel of the market .

Hope this helps! I bet cpfleger can describe it much better than me (maybe a few examples).

Hi Ipp! That's an interesting chart, how do you define the entry and exit points for each trade?



Looks like the newest orders get closed sooner, and the oldest a bit later. Mixed with a bit of hedging?

Best regards.

RieseP,
The 1% Strategy is really a Trend Following Strategy based off the 200 EMA as the directional bias and the EMA Strategy is really a Counter-trend Strategy based off the EMAs as support or resistant targets. Both use 1 or 5M TFs and are declared scalping systems. Both work but both require alot of patience and discipline.

KoF versions are based on knowledge in reading candlesticks and their patterns which is why most people get confused or frustrated as KoF always says he knows how to read the Market, which is true but most people fail in learning patterns. Additionally, most Traders fail to understand KoF verbal statement of he never looses but in reality he does loose a trade or two because he enters too early and he has admitted this in his older video's (the devil is in the details). Even todays video he lost the first two trades before closed for the day, so overall his scorecard is great per day.

Overall like most systems, they both work but its back to the Trader having lots of patience and discipline which enables the Trader to be successful or not.
cpfleger

my version of the 1% Strategy, slightly different than Kof...

Hi Abade,
Thank you for your interest.
The name of your thread is M1 counter trend Scalping Strategy.. return to the mean..
If you care inspect the chart you will see that all the entries are counter trend except for the 1 loss which was me hitting a Sell instead of a Buy!
The swings on the EURUSD were very small and getting 3.3pips was difficult hence my take profit being what it was.The reason for 3.3 is it allows me to cover commission and spread and so gives 4,5,6 times the cost of the trade.
If I feel that I have nailed a swing high or low I will drag that trades take profit for a much greater return and leave other trades from the same levels to hit the original TP.
I use the Depth of Market (right click chart) available in MT4 for trade entries as it is very easy to use and can be moved where ever on the chart. BE AWARE the CLOSE button will close the oldest trades one at a time each time it is pressed.
I move the terminal window to the side so only the trades P/L is showing this allows me to keep an eye on the state of play without chart space being compromised.
I normally wouldn't take as many trades but I did it as an exercise for the hesitant traders (In this thread) who are always asking for exact entries take profit and STOP LOSS.
The thing is a stop loss doesn't stop loss at all it limits the loss and I think the trader considers it someone else fault when it is hit.
When I first started trading I was told stop loss was a death of a thousand cuts foolishly I didn't believe it.

I closed the open trades with a close all script as I was being called for the evening meal NOW!

This is for all the traders nursing their 1 lot entries and willing it to their take profit which never seems to happen.
Demo accounts are there to practice entries and exits and learn what works and what doesn't and have faith in what you have observed over and over.
Make sure the demo account allows you to have the trading capital you will be using in Live trading and the leverage you will be allowed to use i.e Retail or Pro account.
If you can't get it on the demo change to Brokers who will give you a true live trading experience in Demo.
Just my opinion.
Cheers
lpp

Thanks for sharing! That's a very clear explanation.

Stop Loss: Death of a thousand cuts, you got that right

Very interesting, thanks for the explanation cpfleger

Abade,
Most Moving Average Strategies are very similar to each other and if you want to view Oliver Veliz's video's he speaks about the 20 and 200 MA strategy too and Oliver preaches the 2 or 5M TF's... I prefer counter-trend trading because I love the get in and get out strategy which enables my profits in the Bank daily...

How do you want to go forward with this stream as you earlier ideas were great and we need a Plan and a Purpose.
cpfleger

Thanks! Will check Oliver Veliz approach

My current plan is:

1) Finish a secret project I am working on (takes up almost all my time). Meanwhile I am gathering observations and information on this discretional approach on my free time. May take a few months to finish the first one.
2) Will define a KoF countertrend strategy with better entries (probably, a very similar approach to yours) and share more precise rules in this thread.
3) Next it's mass back-testing of the strategy in a few instruments to prove robustness.
4) Finally we encourage other traders into weekly challenges using the main system or their own variations, I will participate as soon as I have some free time back, sadly I am not able to focus 100% right now.

Hope this doesn't disappoint . My best regards friend.

Hi Cpfleger,
Definitely interested to see what you have in store. I am a profitable trader but I always look for ways to improve myself and my decisions. One thing that I find most important is patience and studying the market. As you mentioned in another post, traders that are trying to use KOF EMA strategy need to understand that he is a very experienced trader and he is very aggressive (not in a bad way/just aggressive based on experience). They need to know to pick their entry levels a bit more carefully, and once they are comfortable with the strategy, and have experienced the majority of the situations within the market then they can start to push themselves.

@Adabe
I have experienced being in severe drawdowns, close with huge loss in one situation, but learned to better manage those drawdowns and not be as aggressive on the entry. In other situations, I have been in drawdown but learned from my previous situation to manage those trades. Trading is really the process of managing your trades. I think you have to experience those kinds of situations to build your confidence and psychology and learn from your mistakes. Also, trading on live is a must, even if it's a $500 or $1000, but demo first to get a decent understanding of the strategy.

The EMA strategy works and like KOF says it may take time for people to learn the market and the different situations of the market. Prior to trading the EMA strategy, I used to trade the 1-minute timeframe with naked charts. I learned market structure, and price action, studied the candles, and did a decent job at it but I felt like I was missing something. I think that helped me with reading the market and help with developing the "feeling of the market". Though I am not always right like KOF, but more correct than not. Furthermore, when I found KOF and looked at one of his videos and was immediately impressed and confused. I've watched all his videos 2+ times and got gems every time I watched. So for the new trader that wants to learn his strategy, watch all his videos multiple times, (I know it's a lot of videos), invest in buying his content, and be patient with the process. Cpfleger's version of the EMA Strategy is a great implementation of the KOF strategy.

Gents,
my supply demand Indicator and settings attached.
cpfleger

Gents,
if you want to know the overall Indicator configuration to my KoF EMA Strategy it is;
- SupDem (see above post)
- 4 EMAs (default)
- RSI (previous post / pages)
- Volume (default)
- 20 EMA MA inside Volume (default)
- Optional (HA Candles) (default version avilable)

Save as a Template and then decide 1 or 5M TF, I prefer 5M TF due to my old eyes (slower but steadier).
cpfleger

KoF Strategy Guide.

Gents,
you will need to practice and calibrate your mouse finger because we are scalping and precision entry and exits are the critical part of this system. So make a few errors on purpose because you must fail first to win secondly. DO NOT WATCH the money, learn the process, practice and practice 20 times before you allow any thoughts into your brain, its like riding a bicycle, you will fall but prepare for it. Your goal is 90% plus consistency first NOT MONEY.

Entry, red line and exit (repeat these simplified steps) = 90% plus performance (performance is profits - PIPs).
cpfleger

thanks for the info cpfleger, much appreciated

Cheers, Baz

cpfleger, where do you place stop loss, and what is your risk management approach? Thanks.