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M1 Countertrend Scalping Strategy

  • #10,281
  • Dec 4, 2023 8:05am Dec 4, 2023 8:05am
that's a great question surmoose and there is no simple answer!

with regard to maximising profits, just start out with aiming for ema200 and timing your trades to suit a return, a couple of excellent recent examples of which can be found by amiraven and typek just above your post then use your reading of price action to take that further...

overcoming fear requires a solid money management plan, hedging a runaway helped me in that process, but the best advice i found was in a post i recently came across by "traderathome" and it is worded much better than i could and is exactly the best advice to help overcome fear...
every minute matters!
  • #10,282
  • Dec 4, 2023 8:07am Dec 4, 2023 8:07am
M1 EURUSD!
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every minute matters!
  • #10,283
  • Dec 4, 2023 10:15am Dec 4, 2023 10:15am
Quoting niks
that's a great question surmoose and there is no simple answer! with regard to maximising profits, just start out with aiming for ema200 and timing your trades to suit a return, a couple of excellent recent examples of which can be found by amiraven and typek just above your post then use your reading of price action to take that further... overcoming fear requires a solid money management plan, hedging a runaway helped me in that process, but the best advice i found was in a post i recently came across by "traderathome"...
Good advice. Thanks. And thank you for posting that link. I found that helpful.
  • #10,284
  • Dec 4, 2023 10:18am Dec 4, 2023 10:18am
Quoting Amiraven
{image}
Amiraven, it looks like you wait until price is considerably extended before entering. I would think that produces less opportunities but higher probabilities. Do you increase your position sizes accordingly, or do you still use KOF's .01 lots / $1000 ratio?
  • #10,285
  • Dec 4, 2023 7:35pm Dec 4, 2023 7:35pm
Quoting SurMoose
{quote} Good advice. Thanks. And thank you for posting that link. I found that helpful.
it's my pleasure surmoose, glad you found it helpful, i also found it very helpful and most pertinent to any strategy that uses cost averaging... trust in your strategy and trust in your ability to execute it is also a major factor and takes time to develop... i went through exactly what you are feeling now for many months, it is very unpleasant but also inspires new ways to overcome it - there is no choice! keep at it and you WILL find a way, best of luck to you!
every minute matters!
  • #10,286
  • Dec 4, 2023 9:34pm Dec 4, 2023 9:34pm
M1 EURUSD
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every minute matters!
  • #10,287
  • Dec 5, 2023 1:22pm Dec 5, 2023 1:22pm
Quoting niks
M1 EURUSD {image}
Very interesting, I've also been experimenting using renko (PointO type) and different type of signals:

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AUDCAD, 11 years performance, shorts only:

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Currently testing different algorithms, order distances (very tricky), brick sizes and instruments.

Some people may be asking themselves why I say it's a 11 year backtest when the timestamps show only a few days. That's because backtesting renko in the MT5 platform is a pain in the butt and timestamps have to be removed or else it crashes the whole platform when running a test. In this case 1 minute = 1 brick (fixed 20 pips). Prices are unaffected by this modification.

I am using a paid program called "Renko GenX" and tick data to build my charts.
  • #10,288
  • Dec 5, 2023 7:56pm Dec 5, 2023 7:56pm
hey abade, i had a feeling this renko overlay may pique your interest!

i am still not familiar with all the intricacies of renko charts, i didn't even know about PointO until now!

personally, i find renko on it's own impossible to work with, there is just not enough information in them for me, but as an overlay i find it very useful as the price action plays out to form the brick and then i can apply additional renko analysis on top of that...

i came across this renko generator on mql5 and post it here in case it might be useful to your endeavors which by the results you have posted look very promising!
https://www.mql5.com/en/code/19559

one thing i'm curious about though, is it really necessary to use tick data to build the bricks?
every minute matters!
  • #10,289
  • Edited 10:09pm Dec 5, 2023 9:36pm | Edited 10:09pm
Quoting niks
hey abade, i had a feeling this renko overlay may pique your interest!
And you were right! I love renkos

Quoting niks
i am still not familiar with all the intricacies of renko charts, i didn't even know about PointO until now! personally, i find renko on it's own impossible to work with, there is just not enough information in them for me, but as an overlay i find it very useful as the price action plays out to form the brick and then i can apply additional renko analysis on top of that...
I also believe that renkos don't provide much information on their own, it's just a grid that simplifies price action to some degree. However, I find that this simplification of price action is very useful for some mechanical systems and indicator readings. In other words, the imposed limitations in candle size and patterns can make these systems a lot more consistent in the long term as they don't have to deal with a million different (noisy) variations and changes that are present in regular time candles.

Through testing I also notice that PointO charts can reduce the drawdown of this type of mechanical system much better than Classical Renko. For clarification/reference:

Point Original: The "reversal bar" is 100% as big as a normal candle (that's why it's also called "Rail to Rail" renko).
Classical Renko: The "reversal bar" is 200% as big as a normal candle (the most well known renko type).
Median Renko: The "reversal bar" is 300% as big as a normal candle (it's way smoother, but entries are delayed).

Quoting niks
i came across this renko generator on mql5 and post it here in case it might be useful to your endeavors which by the results you have posted look very promising! https://www.mql5.com/en/code/19559 one thing i'm curious about though, is it really necessary to use tick data to build the bricks?
Thank you my friend, every new tool is very welcome

Tick data is necessary when backtesting/evaluating a renko system. If a lower resolution is used (1 minute or worse) fast movements may appear way smoother than they really are and tests (both automatic or manual) will show unrealistic/Inconsistent performance going forward, especially when a small brick size is used for scalping (i.e: 10 pips or less).

For classical renko, the open gap for each reversal bar has to be removed as well as it is 100% fictional and the backtester is not able to recognize this fact, so it will open trades in places where it shouldn't be able to in a real environment. These technical issues and the ways to fix them are detailed in this article (for anyone interested): https://www.az-invest.eu/how-to-prop...sing-tick-data

Edit: Here is an illustration (all credits go to @MathTrader7):

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I will keep the updates running, my best regards to everybody!
  • #10,290
  • Dec 5, 2023 11:33pm Dec 5, 2023 11:33pm
Quoting niks
M1 EURUSD {image}

I'm looking around for the Renko on-chart generator you're using in this picture as you're trading on MT5 here. Where did you get it?
  • #10,291
  • Dec 6, 2023 3:12am Dec 6, 2023 3:12am
thanks for the detailed information Abade, it has cleared up the jargon for me!

i understand the need to use tick data in mt4 for accurate back testing, but i'm still not sure why if the back tester runs per tick it is still an issue in mt5?

renko with wicks caught my attention as they appear to provide more price action, i may explore those a bit further, but i also think the renko overlay serves the same purpose with even more detail and it can also be dynamically adjusted according to ATR

Quoting TransparentT
{quote} I'm looking around for the Renko on-chart generator you're using in this picture as you're trading on MT5 here. Where did you get it?
i knocked it up myself so you won't find it unless there is another one around, it still has a couple of issues i'm working on...
every minute matters!
  • #10,292
  • Dec 6, 2023 3:13am Dec 6, 2023 3:13am
Quoting SurMoose
{quote} Amiraven, it looks like you wait until price is considerably extended before entering. I would think that produces less opportunities but higher probabilities. Do you increase your position sizes accordingly, or do you still use KOF's .01 lots / $1000 ratio?
That's right, I usually stick to the rule you mentioned and don't increase my lot size.
I haven't come this far to only come this far !
  • #10,293
  • Dec 6, 2023 4:26am Dec 6, 2023 4:26am
M1 GBPUSD
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every minute matters!
  • #10,294
  • Dec 6, 2023 5:00am Dec 6, 2023 5:00am
M1 GBPUSD
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every minute matters!
  • #10,295
  • Dec 6, 2023 6:12am Dec 6, 2023 6:12am
keltner channel pro for mt4
https://www.forexfactory.com/attachm...0?d=1568987590

and some further info on PointO chart trading
https://www.forexfactory.com/thread/...-chart-trading
every minute matters!
  • #10,296
  • Dec 6, 2023 8:53am Dec 6, 2023 8:53am
M1 GBPUSD
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every minute matters!
  • #10,297
  • Dec 6, 2023 9:40am Dec 6, 2023 9:40am
Quoting CM-PunkFX
I remember a lot of you were curious about Chhico’s strategy, but I can confirm it’s not as special as some of you guys thought. And his set up was just copied from a YouTuber. I know because I saw the set up and strategy long before Chhico posted it on here. But the important part is it’s no miracle strategy. It involves the envelope indicator and force index indicator on mt5 and mt4 basically momentum indicators. But the set up is not that much different to using an RSI for oversold and overbought entries. After going thru about 500 pages on this...
I've been playing around with RSI too. I know Niks likes the Keltner channel. I've been using the RSI to keep me from entering too early and to better gauge when price is truly extended. Divergences are helpful too. It still comes down to mean reversion with the EMA though and knowing when to hedge/stop-out or reverse direction. That's the tricky part. You can see KOF does it in some of his free videos. You just have to comb through them because most of the time he just uses the basic EMA strategy and averages out of everything. But you will still see him occasionally switching both ways. He definitely has a lot of experience reading the markets.
  • #10,298
  • Dec 6, 2023 10:45am Dec 6, 2023 10:45am
Quoting niks
keltner channel pro for mt4 https://www.forexfactory.com/attachm...0?d=1568987590 and some further info on PointO chart trading https://www.forexfactory.com/thread/...-chart-trading
Niks… do you have the mt5 version of the keltner channel you use how download?… as I’m currently using mt5 for trading. Thanks in advance.
  • #10,299
  • Dec 6, 2023 10:57am Dec 6, 2023 10:57am
Quoting SurMoose
{quote} I've been playing around with RSI too. I know Niks likes the Keltner channel. I've been using the RSI to keep me from entering too early and to better gauge when price is truly extended. Divergences are helpful too. It still comes down to mean reversion with the EMA though and knowing when to hedge/stop-out or reverse direction. That's the tricky part. You can see KOF does it in some of his free videos. You just have to comb through them because most of the time he just uses the basic EMA strategy and averages out of everything. But you...
Hi SurMoose,

I think you’re spot on with what you said. Most of the time KOF does only use the return to ema stategy and it clearly works. I too myself have been practising it for a year on demo.. hoping to actually pass a prop firm challenge on day. Through the experience I have I sometimes go for nearly a week without meeting a really long trend that results in a loss. This isn’t hard to understand why though, because the market is known to range 75% of the time and only trend 25% of the time. So most of the time the ema strategy will give up winners. However it’s trying to find a way to avoid placing trades when there’s a huge trend or knowing when to cut the lose that usually kills my account. I still haven’t found a way to conquer that. I too have tried using the RSI unfortunately I’m no good at spotting divergences meaning I lose out whenever I use the indicator as one of the most profitable ways of using an RSI is to spot divergences. Timing of entry is very important in this game as is when to cut your loses. It’s also very important to know when to close your trades in profit. Yes some people say they close too early which is true… but at the same time when implementing the return to ema strategy if you miss the chance to close your trades in profit… sometimes you will find you may not get another chance to do so and then they end up in drawdown or worst end up being losing trades instead.
  • #10,300
  • Dec 6, 2023 1:09pm Dec 6, 2023 1:09pm
Quoting CM-PunkFX
{quote} Niks… do you have the mt5 version of the keltner channel you use how download?… as I’m currently using mt5 for trading. Thanks in advance.
Have a look at niks signature

kc topics: https://www.forexfactory.com/thread/...2#post14648072
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