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Scalping System by Machine

  • #1
  • First Post: Edited Jun 23, 2024 6:47pm Jun 21, 2024 8:31am | Edited Jun 23, 2024 6:47pm
This system operates with a strong emphasis on its rules, yet it's crucial not to fixate so much on them that you overlook what the market is doing relative to the rules. Developed under the guidance of a mentor, it is tailored for scalping, relying on favorable market conditions such as dynamic movement and minimal spreads.


Trading System Rules:

  1. Timeframes: Trade on lower timeframes like M1-M5.
  2. EMA Condition: Price must be above the 20 EMA for a buy and below for a sell.
  3. Candle Condition: Candle color must change.
  4. Setup Bar Criteria:

    1. Setup bar must be a strong bar, closing within 75% of its range.
    2. Volume of the setup bar must be higher than the previous bar.








  5. ATR Requirement: ATR(14) (Average True Range) must be above 4 pips, or inside NY KZ (this occurs from 8:00 AM to 12:00 PM (EST), when both the London and New York sessions are active. This period is known for increased trading volume and volatility in the forex market)
  6. Targets and Stops:

    1. Target: Aim for 1R (one times the range of the setup candle).
    2. Stop Loss: Can be placed very close to the setup candle's low (for buys) or high (for sells).








Working Theories:

  1. The system should be traded manually.
  2. A major trend line or support and resistance break can create very good opportunities for the system which we can refer to as (Bullish / Bearish Breakout Phase)
  3. Trade cautiously if the setup candle is very large.
  4. Setups are usually the product of an engulfing candle...TBD what that means.
  5. Better MM? Additional filters?
  6. 100 period minimum BOS( break of structure) to validate HTF bias?

  • #2
  • Jun 21, 2024 8:46am Jun 21, 2024 8:46am
+5 PIPS
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  • #3
  • Jun 21, 2024 10:02am Jun 21, 2024 10:02am
AJ M5

All criteria met
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  • #4
  • Jun 21, 2024 10:41am Jun 21, 2024 10:41am
Quoting MachineLearn
I will format the post better once home, but here are the rules for you to start studying. This is a very mechanical system however don’t be so mechanically focused you blind yourself to the rest of the market. This system has been taught by a mentor. It does require good movement and low spreads because of the nature of scalping. Trade on lower timeframes like M1-M5 price must be above 20 EMA for a buy and below for a sell Candle color has to change Setup bar has to be a strong bar - Closed within 75% of candle range Volume of setup bar has to...
Interesting, why not
The only hesitations from the years of the experience are:
1. EMA20 - lagging as always)) - maybe we can just look left (or HTF) to understand the trend?
2. Target (and SL btw) - maybe we could better look ath the structure (nearest SR levels)?
Anyway I see your interest to make the system as much mechanic as it possible - it's my dream also But if the automatization of the trading is not your goal (atm), maybe we can change the criterias pointed higher.
I like the idea, thank you for sharing it. Let's develop.
Just an opinion. Based on research
  • #5
  • Jun 21, 2024 10:45am Jun 21, 2024 10:45am
Quoting MachineLearn
+5 PIPS {image}
Oh, btw look what I see
If there's no gap then we can reformulate a part of the rules as th engulfing (plus MA, plus ATR...)
Just an opinion. Based on research
  • #6
  • Jun 21, 2024 10:50am Jun 21, 2024 10:50am
Quoting since80808
{quote} Interesting, why not The only hesitations from the years of the experience are: 1. EMA20 - lagging as always)) - maybe we can just look left (or HTF) to understand the trend? 2. Target (and SL btw) - maybe we could better look ath the structure (nearest SR levels)? Anyway I see your interest to make the system as much mechanic as it possible - it's my dream also But if the automatization of the trading is not your goal (atm), maybe we can change the criterias pointed higher. I like the idea, thank you for sharing it. Let's...
Appreciate the input, all great suggestions. Automization is definitely not a goal here. I am a manual and mechanical trader, I think that human bias is important, and we can’t just rely on algos to place a trade every single time a trade is valid.

I will look at these suggestions and test them going forward!
  • #7
  • Jun 21, 2024 10:50am Jun 21, 2024 10:50am
Quoting since80808
{quote} Oh, btw look what I see If there's no gap then we can reformulate a part of the rules as th engulfing (plus MA, plus ATR...)
im listening
  • #8
  • Jun 21, 2024 11:03am Jun 21, 2024 11:03am
Quoting MachineLearn
Volume of setup bar has to be higher than previous bar
It is an indicator? What name? Or it is broker volume?
People don't plan to lose. They lose because they don't plan.
  • #9
  • Jun 21, 2024 11:04am Jun 21, 2024 11:04am
Quoting ScalaFX
{quote} It is an indicator? What name? Or it is broker volume?
regular broker volume
  • #10
  • Jun 21, 2024 11:09am Jun 21, 2024 11:09am
Quoting MachineLearn
{quote} regular broker volume
thanks, good system, you need some one or two filtres and you have 80% win ratio strategy, good MM and go
People don't plan to lose. They lose because they don't plan.
  • #11
  • Jun 21, 2024 11:42am Jun 21, 2024 11:42am
Quoting ScalaFX
{quote} thanks, good system, you need some one or two filtres and you have 80% win ratio strategy, good MM and go
agreed

the bones of the system is amazing. I’m actually a fan of the simple MM and RR used.

it varies from trade to trade depending where you put your stop but it’s logical to me and has proven effective.

Definitely open to more options
  • #12
  • Jun 21, 2024 11:48am Jun 21, 2024 11:48am
Close but volume was not > setup bar
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  • #13
  • Jun 21, 2024 2:32pm Jun 21, 2024 2:32pm
you counting trigger bar with wicks or only body? Must be 75% bigger than signal candle? I dont undestand here
People don't plan to lose. They lose because they don't plan.
  • #14
  • Jun 21, 2024 2:35pm Jun 21, 2024 2:35pm
BTC 1R
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  • #15
  • Jun 21, 2024 2:41pm Jun 21, 2024 2:41pm
What’s the implication of the system?

well we’re trying to capitalize on mini pullbacks in the market. By scalping these mini pullbacks and riding the momentum of larger players , we’re minimizing our exposure to the market and skimming off the top.

The EMA guides us, making sure we’re aligned with the bigger players.

The Atr threshold makes sure there’s enough volatility in the market, undeniably important when taking scalping positions.

The 75% candle close rule is one of my favorite rules about the system. It’s another safety feature to make sure we’re aligned with winning team.

The Target and Stop are local so we should never be the product of a stop hunt. That’s why I like this RR and MM, it’s unorthodox enough to avoid manipulation. Pairs nicely with our quick scalping positions.
  • #16
  • Jun 21, 2024 7:44pm Jun 21, 2024 7:44pm
Quoting MachineLearn
{quote} im listening
I mean
Quoting MachineLearn
Candle color has to change
Setup bar has to be a strong bar - Closed within 75% of candle range
Volume of setup bar has to be higher than previous bar
it all (almost) equals engulfing and both of your first two screenshots illustrate it.
Just an opinion. Based on research
  • #17
  • Jun 21, 2024 8:52pm Jun 21, 2024 8:52pm
Quoting since80808
{quote} I mean {quote} it all (almost) equals engulfing and both of your first two screenshots illustrate it.
Sometimes yes, sometimes no

This is how my chart is setup now
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  • #18
  • Jun 21, 2024 9:46pm Jun 21, 2024 9:46pm
If you trade during sessions that typically have high volume, like kill zones, or NY OPEN, or something like that, then don't stress the ATR too much. The ATR is there to ensure that your trade can profit past spread pretty much...it's not totally essential to the strike rate
  • #19
  • Edited Jun 22, 2024 6:56am Jun 21, 2024 9:50pm | Edited Jun 22, 2024 6:56am
Look how well GOLD performed on M1 during NY OPEN today

third trade should be one candle prior
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  • #20
  • Jun 22, 2024 7:09am Jun 22, 2024 7:09am
Gday Machine Nice system. Any chance you have a mt4 version of the 75% indy?
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