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M1 Countertrend Scalping Strategy

  • #421
  • Dec 14, 2022 8:21pm Dec 14, 2022 8:21pm
an example of waiting where most people would close at a loss, I have a very high risk tolerance but I do not recommend for most traders yet, until they learn to read the Market as KoF says.
cpfleger
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  • #422
  • Dec 14, 2022 8:23pm Dec 14, 2022 8:23pm
Quoting Abade
Ok guys so: a) cliffjaded would have used hedging to manage the losing positions. b) cpfleger would have used better timing for entries using supply and demand zones. c) RieseP would have accepted a daily loss and stop adding new positions. I want to share an observation I have made for EURUSD, GBPUSD, Ger-30 pairs in different timeframes: {image} {image} These images may trigger a big "duh", but could this be one of the key factors for surviving mid and long term trends using cost averaging, or am I going insane? (I know the spread is high in Ger-30...
I don't have enough history on my MT4 broker (Pepperstone). I think because it changed symbol from GER30 to GER40. Let me download 1 year worth of tick data from TickStory and see how I would trade that particular trend. Probably out of my ass lolx.
Leave the Gun, Take the Armani
  • #423
  • Dec 14, 2022 8:30pm Dec 14, 2022 8:30pm
Quoting cliffjaded
{quote} I don't have enough history on my MT4 broker (Pepperstone). I think because it changed symbol from GER30 to GER40. Let me download 1 year worth of tick data from TickStory and see how I would trade that particular trend. Probably out of my ass lolx.
Hi cliffjaded! If your broker allows it you should use MT5 as it will download more M1 history data than MT4 for most instruments, and it has REAL spread history for backtesting as well!! hope this helps! Blueberry markets has good data BTW! But spreads are a bit too high to scalp the M1 (may need to go back to ICM)

It doesn't matter if you use cheese or hindsight to get out of that trend, let's try to find a set of rules to save ourselves from future scenarios that are similar to that one.

Thanks! Best regards!

Quoting cpfleger
an example of waiting where most people would close at a loss, I have a very high risk tolerance but I do not recommend for most traders yet, until they learn to read the Market as KoF says. cpfleger {image}
I bought here as it matches our criteria:

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Let's see how it goes!

Edit: I just noticed you are using 6 EMA (shift = 2) instead of the 9 EMA, now I don't know how to manage a possible loss using the rules I posted (edit: I will use the 20 EMA, as this is a volatile instrument anyways).

Quoting josh1111
Thanks for letting us know KOF is live!
Bro! Download the cpfleger's template and join us .

I recommend a demo $10,000 USD account (max leverage 200:1? 500:1 = best), and use 0.10 lots per trade.

Best regards.
  • #424
  • Dec 14, 2022 9:03pm Dec 14, 2022 9:03pm
Sounds good I will jump in with you guys and show some results.
Thank you as well Abade for starting this thread.
I have already been experimenting with cpfleger's indicators.
The HA candles are challenging for me after so long of using OHLC's but the rest is very straight forward which is nice.
KOF Rocked it again today and made over 2K in profits in less than two hours with a real Live Feed.
I followed him for the last part and had all successful trades.
Who else wants to join us for an experiment??
  • #425
  • Dec 14, 2022 9:04pm Dec 14, 2022 9:04pm
Quoting Abade
{quote} Hi cliffjaded! If your broker allows it you should use MT5 as it will download more M1 history data than MT4 for most instruments, and it has REAL spread history for backtesting as well!! hope this helps! Blueberry markets has good data BTW! But spreads are a bit too high to scalp the M1 (may need to go back to ICM) It doesn't matter if you use cheese or hindsight to get out of that trend, let's try to find a set of rules to save ourselves from future scenarios that are similar to that one. Thanks! Best regards!
MT5 is a dream for backtesting. Especially if you use EAs. Multi-threaded, multi-currency testing with real tick, real spread and slippage simulation. Even trading on it feels significantly smoother.

I still use MT4 because some stuff I use are only available for MT4. My EAs and scripts i wrote are also for MT4. I'm in the process of converting over to MQL5. MQL4 is a lot easier to program but porting over to MQL5 isn't massively complicated either. Just need to get my ass on it.

I want to use MT4 because i can use my nifty hedging/averaging visual order tool to quickly test that that 17 August 22 period for GER30. It's unfortunately not available for MT5.

Renko also sucks ass on MT5 due to the custom symbol nonsense.
Leave the Gun, Take the Armani
  • #426
  • Dec 14, 2022 9:12pm Dec 14, 2022 9:12pm
Quoting josh1111
Sounds good I will jump in with you guys and show some results. Thank you as well Abade for starting this thread. I have already been experimenting with cpfleger's indicators. The HA candles are challenging for me after so long of using OHLC's but the rest is very straight forward which is nice. KOF Rocked it again today and made over 2K in profits in less than two hours with a real Live Feed. I followed him for the last part and had all successful trades. Who else wants to join us for an experiment??
I am glad to hear that my friend! Follow cpfleger and KoF and you will make the moneys!

Quoting cliffjaded
{quote} MT5 is a dream for backtesting. Especially if you use EAs. Multi-threaded, multi-currency testing with real tick, real spread and slippage simulation. Even trading on it feels significantly smoother. I still use MT4 because some stuff I use are only available for MT4. My EAs and scripts i wrote are also for MT4. I'm in the process of converting over to MQL5. MQL4 is a lot easier to program but porting over to MQL5 isn't massively complicated either. Just need to get my ass on it. I want to use MT4 because i can use my nifty hedging/averaging...
Yes! That's where I backtest my automated systems.

There is a big problem with renko in MT5. It considers ALL the imported data to be M1... Therefore it will calculate/optimize VERY slowly (just as if it was running a M1 test), it's a pain in the butt. Have not found any way around that but using shorter periods and removing the time stamps.
  • #427
  • Dec 14, 2022 9:57pm Dec 14, 2022 9:57pm
Quoting Abade
{quote} My friend, I am trying to create a template using your indicators to share with everybody, however one of them is causing a lot of issues on the platform (it's completely frozen), how do you manage that?
Just want to say i'm very happy to have come across this thread! I appreciate everyone here i feel like this was meant to be me stumbling across this especially when i've been watching Kings video for a while but life things happened and my discipline to keep trading fell off. I'm back on and now have other like minded people to bounce ideas around with. Lets get this cash!
  • #428
  • Edited 10:11pm Dec 14, 2022 9:57pm | Edited 10:11pm
Starting with 0.1 lots for theoretical $10 000 balance. Using 100ema for trend and 8ema for momentum.

1. Counter-Trend to Downsloping (Pink) 100ema
Using 8ema as a rough guide for momentum shifts back to 100ema. I use a rough step 100 points before i consider adding an averaging order. After 6+ orders, i will up the position size by 0.1 lot.
Eventually 100ema changes to uptrend. I would continue to hold till 100ema till it changes back to downtrend. Exit when 100 turns pink again (goes back down).

Total Loss: $-179.50
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2. Pro-Trend with Downsloping (Pink) 100ema
Same idea. Using 8ema as "trendline breaks" within the downsloping 100ema. Stacking all the way down with 0.1 lots. I don't increase lots because if the trend were to reverse, I don't want to be caught with a bottom-heavy averaging situation. Exit when 100ema turns green.

Total Profit: +$292.10
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3. Counter-Trend to Upsloping (Green) 100ema
Previous basket of Pro-Trend sell trades in point 2 has been closed. 100ema has turned green and is now sloping up. Take Counter-Trend trades.

Total Profit: +$10.50
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4. Pro-Trend with Upsloping (Green) 100ema
100ema is green. Stack pro-trend trades till it turns pink again.

Total Profit: +$11.50
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Net Profit: +138.60

Easier said than done and plenty of hindsight. But it's a proof of concept. It's essentially combining KOF's EMA + 1% strategy.

P.S. The last Pro-Trend basket in point 4 should not be considered as you would still be averaging the Counter-Trend trades in point 1. You could but it would start to get very confusing. Only trade 1 basket of buys and sells at any one time to maintain sanity. If you want to trade pro-trend in number 4, you would definitely need a trade manager that can filter by magic numbers.
Leave the Gun, Take the Armani
  • #429
  • Dec 14, 2022 10:07pm Dec 14, 2022 10:07pm
Quoting cpfleger
Abade, excellent news. cpfleger {image}
much gratitude for sharing brother
  • #430
  • Dec 14, 2022 10:37pm Dec 14, 2022 10:37pm
Just started yesterday following the strategy... Whooping profit of +5.88 USD with micro lots... I am gaining more confidence gradually. Many Thanks cpfleger and Abade!!

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The best traders hone their skills through practice and discipline.
  • #431
  • Dec 14, 2022 10:46pm Dec 14, 2022 10:46pm
Quoting cpfleger
an example of waiting where most people would close at a loss, I have a very high risk tolerance but I do not recommend for most traders yet, until they learn to read the Market as KoF says. cpfleger {image}
On this one you would add a order right since it's now back on the ema 9 correct?
  • #432
  • Edited 11:29pm Dec 14, 2022 11:01pm | Edited 11:29pm
Quoting cliffjaded
Starting with 0.1 lots for theoretical $10 000 balance. Using 100ema for trend and 8ema for momentum. 1. Counter-Trend to Downsloping (Pink) 100ema Using 8ema as a rough guide for momentum shifts back to 100ema. I use a rough step 100 points before i consider adding an averaging order. After 6+ orders, i will up the position size by 0.1 lot. Eventually 100ema changes to uptrend. I would continue to hold till 100ema till it changes back to downtrend. Exit when 100 turns pink again (goes back down). Total Loss: $-179.50 {image} 2. Pro-Trend with Downsloping...
Interesting! How would they work together in this case (countertrend and trend-hedging)? Got a little confused in the end . I think an automation may help to visualize both in the backtester.

Quoting ausar
{quote} On this one you would add a order right since it's now back on the ema 9 correct?
KoF adds a new trade once the 9 EMA has catched up with the latest entry level. On the first post there is a video explaining it.

This trade resulted to be a very bad breakout that is still running, let's see how it's solved!

Quoting ross.d
Just started yesterday following the strategy... Whooping profit of +5.88 USD with micro lots... I am gaining more confidence gradually. Many Thanks cpfleger and Abade!! {image}
Very glad to hear it! Run at least 200 setups and you will know what's the usual performance of the system for that instrument, and will give you a lot of confidence

The KoF is getting very active on YouTube, you should check every live session he releases, he's on fire most of the time
  • #433
  • Edited 11:37pm Dec 14, 2022 11:23pm | Edited 11:37pm
Quoting Abade
{quote} Interesting! How would they work together in this case (countertrend and trend-hedging)? Got a little confused in the end . I think an automation may help to visualize the concept in a backtester. {quote} KoF adds a new trade once the 9 EMA has catched up with the latest entry level. On the first post there is a video explaining it. This trade resulted to be a very bad breakout that is still running, let's see how it's solved! {quote} Very glad to hear it! Run at least 200 setups and you will know what's the usual performance...
man I'm in it with you trading it to see how to manage it
  • #434
  • Dec 14, 2022 11:28pm Dec 14, 2022 11:28pm
Quoting ausar
{quote} man I'm in it with you lol im in it trading it to see how to
Big oopsies . Should have trusted my old research that says XAGUSD is trend/momentum-friendly, it's very lean and doesn't chop very well. We may have to wait for a 200 EMA touch, I wonder how cpfleger is handling it (may have pulled out).

Edit: It's losing gas now:

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  • #435
  • Dec 14, 2022 11:46pm Dec 14, 2022 11:46pm
Quoting Abade
{quote} Big oopsies . Should have trusted my old research that says XAGUSD is trend/momentum-friendly, it's very lean and doesn't chop very well. We may have to wait for a 200 EMA touch, I wonder how cpfleger is handling it (may have pulled out). Edit: It's losing gas now: {image}
Yeah man that was my first time ever trading that pair. I got smoked but that's why I'm on demo to learn. I slightly over leveraged could of placed better trades to average out looks like it doesn't matter though because it's still pushing up. I see what you mean about certain pairs tho. Eur/usd would of had multiple pull backs in that time frame.
  • #436
  • Dec 14, 2022 11:48pm Dec 14, 2022 11:48pm
Quoting Abade
{quote} My friend! A few videos of your trades would help a lot Thanks for sharing your whole system!
I second on this dear cpfleger, just as KOF does!! My best regards!!
The best traders hone their skills through practice and discipline.
  • #437
  • Dec 15, 2022 12:13am Dec 15, 2022 12:13am
Quoting ausar
{quote} Yeah man that was my first time ever trading that pair. I got smoked but that's why I'm on demo to learn. I slightly over leveraged could of placed better trades to average out looks like it doesn't matter though because it's still pushing up. I see what you mean about certain pairs tho. Eur/usd would of had multiple pull backs in that time frame.
Exactly my friend. KoF checks a lot of pairs but trades on EURUSD/GBPUSD M1 most of the time, those I consider to be "safe" as they chop more.

Still, the trade isn't over until we get to the 200 EMA we'll see how it develops.
  • #438
  • Dec 15, 2022 12:15am Dec 15, 2022 12:15am
A more straight-forward and typical scenario is opening a pro-trend trade when you close your counter-trend trade @ the ema touch. Then you close out your pro-trend trade when you open the next counter-trend trade. Trading the turning points both ways, so to speak - like in your examples on the first few pages. Eventually, one-side will fail to hit TP and then you will require averaging.

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The other strategy is to average up and down - Pro-Trend and Counter-Trend. In the GER30 situation, i decided to go with the 1% strategy + ema strategy for an extreme example. As you average up and down, you're essentially creating a giant hedged order. This presents solutions and problems.

One big solution is that you actually reduce or even equalises your margin. If you open a 1 lot buy and sell trade, you bring down your margin back to zero. However, the available margin will still be equal to your equity which might have a floating loss or profit. So, bear that in mind. People forget that last point.

Another solution is that in a prolonged trend, as you stack your pro-trend trades and finally take profit, you offset a huge chunk of the loss caused by the losing basket of counter-trend trades. Once the trend reverses and you close out your winning basket, hopefully price reverses back to favourable position where you can close the losing basket at a smaller loss, thereby resulting in a net profit from the 2 baskets.

Now, the problem comes when the trend is not prolonged enough. Then you're stuck in no-man's land - the position where both baskets are in a cumulative loss. At this point, both baskets act like a hedged order with a loss in the middle and you're waiting for a break out. However, the beauty of averaging allows us to continually shift the breakeven level for each basket. In a 1 big lot size hedged position, you're stuck.

You could also come out in cumulative profit with both baskets. If let's say your sell basket is heavier with 2 lots overall and your bus basket is 1 lot and then price breaks out to the downside, with enough distance, you could close both baskets together at breakeven or a small profit. And if you're going to this, you need to use a script to use the CloseBy function to close opposite tickets so that you halve the spread and commission. I'll link my scripts here later.

By trading both ways, you get to be fluid and follow the ebb and flow of the market but also potentially giving yourself a massive headache trying to manage 2 basket of averaging trades. You would also need scripts / trade manager to close all buys and sells separately immediately. I use my own scripts which i have macro'd to hotkeys.

I'd suggest trading this way to start to get a feel for it. You also need tools to monitor each basket's floating profit/loss independently. If not, you're going to get very confused.

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You'd still end up with a loss but the trades in red will help to "etch" out some of the losses. I actually started trading both ways because i'm bored and greedy. I'm always looking to maximise capital efficiency. I used to trade seconds charts some 1 minute charts are not really that fast for me. That's I rely on alerts because i'm usually watching a podcast or something on my second monitor and I end up not paying attention to the chart. And even on a seconds chart, you're mostly not trading. Just waiting for the next setup and just drilling down to sub-M1 to get a better entry. It can be like watching paint dry.

This is by no means some foolproof no-loss method. Things can still go very wrong and get very frustrating. But you now have some more advanced tools in your arsenal, if you so wish to use them. However, this method also can bring a lot of profit in the right situations. It's like a dance - pushing and pulling.

Btw, i'm also testing it myself. This is merely proof of concept.
Leave the Gun, Take the Armani
  • #439
  • Dec 15, 2022 12:49am Dec 15, 2022 12:49am
Quoting cliffjaded
A more straight-forward and typical scenario is opening a pro-trend trade when you close your counter-trend trade @ the ema touch. Then you close out your pro-trend trade when you open the next counter-trend trade. Trading the turning points both ways, so to speak - like in your examples on the first few pages. Eventually, one-side will fail to hit TP and then you will require averaging. {image}.
The first one you described is the one I have been pondering for some time. It may work well with the averaging method, but it implies some sort of (dangerous) lot scaling. You can see the idea in action here (it's using MACD and QQE, but it's still mean reversion in action):

Inserted Video


I agree that it woud be really cumbersome to have multiple hedging positions. And what's even worse: When scaling into a trend the newest "momentum friendly" trades have lower profit potential than the earliest trades (their value lowers as the trend keeps going). I have tested this several times and the results are always the same: using a single position for trend trading is always the best option.

Another straight-forward scenario is to have a time stop. We accept the loss at the end of the session, or we stop adding blindly and close at the next 200 EMA touch. This would only work in the M1 chop friendly instruments IMHO, M5 sessions would be too long.

Edit: I am surprised! You have a lot of good ideas that can be tested, my head is hurting a bit
  • #440
  • Dec 15, 2022 3:41am Dec 15, 2022 3:41am
Adabe,
while we wait patiently for Silver to reverse upwards I have reversed engineered Silver to scalp a few Buys.
cpfleger
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