M1 Countertrend Scalping Strategy

gringo I bought this strategy from KOF too… it’s very interesting and you have outlined correctly how it works. In the screen print you have explained this very well. However I have some questions I would like to ask you. Whilst the strategy looks indeed profitable because if you catch one long trend it will gain all your loses back.Even if you had like say 4 loses, as long as you catch one long trend which you continue to buy into you will win big and recover all your loses and even have good profit maybe. But the question is how are you going to be sat at your screen all day long trying to catch that one long trend? I mean if you get up at 8am and the long trend happens straight away then awesome you get a good win and you can even stop for the day. But what if you get up at 8am and start trading till 1pm without a single long trend?.. by that time you could have already made 6-7 trading loses in which even if a long trend comes it might not even cover your loses let alone make profit?

the other thing is if you look at the successful long trend you outlined in the screen print you would place a buy at the beginning of that trend but after a few candles it actually touched your 200 ema which is when you exit. So then you would have entered a sell as the red Heikin Ashi candles went down below the 200 ema. At that point it then went up again pass the 200 ema again.. so you would again close your sell and enter a buy, the. After a few candles it also went down and hit your 200 ema yet again. So that’s actually already 3-4 loses already as the proper successful trend didn’t start until after all these loses.

Also the biggest question is what do you do when the market is ranging?.. in a live situation the rules are you buy if the price passes thru above the 200 ema and you close your trade when it next hits the 200 ema again. Then you sell as the price passes down thru the 200 ema again. So if market is ranging for say an extended period of time and you get in and out each time price touches the 200 ema, you sell close, you buy close, you sell close and so on, then how are you going to risk manage these loses or do you have additional rules for entries and exits gringo. Thanks in advance my friend.

CM-PunkFX

First, we learn the strategy and its entry and exit points... The Market will Trend / Range / Trend daily, once you learn and master the entry and exit points, your experience will grow, and you will then spot ranging modes quicker.... More to come.

More next week, weekend time.

I do have to admit I did use this strategy on gold when I first learnt about it from you.. could that be the reason why it didn’t work that well? I mean everyone knows gold is more volatile than forex pairs but then again every forex pair trends and ranges just like gold anyway so I don’t know if that really has much to do with it.

Thanks for the explanation gringo… it does look very interesting and I’m gonna give it another go for sure. The one thing that gets me each time is we must follow the rules of this strategy. We HAVE TO enter from the 200 ema just like you stated and we also HAVE TO exit when price touches 200 ema. But upon observing the screen prints you posted whilst we can clearly see the profit from doing this… we can also see many opportunities from where if we had closed earlier while the profit was higher then we would have made more money. But then again this is hindsight and we can only see what we missed out on after it’s happened. What I’m asking is do you have another exit method or is it strictly you can only exit when price touches 200 ema. I suppose really you do have to exit only at the 200 ema because it’s a rule right?

All lower TF's will enable more losses BUT we must start somewhere, and the Strategy is the 200 MA Line as its the median line.
We start with 1M TF and slowly master the process, like kicking a football, do some drills first. Next week.

Thank you gringo… I look forward to the next lesson next week to see how this strategy can be further improved.. have a nice weekend my friend.

Unfortunately the 1 hour chart or even the 30 minute chart wouldn’t work if your trading with prop firms as you can hold overnight on week days but you cannot hold thru the weekend or you will lose your account. Which is why I would say 1 min is more suitable for me… that’s also the reason KOF uses the 1 min as he doesn’t hold overnight.

CM-PunkFX,

I have traded FTMO with many different TF's BUT I manage the trades because I exit within 8 hours. TF's do NOT restrict the trader, I can scalp on the Daily TF within 8 hours. I concur KoF prefers the 1M TF due to less expenses (Swap Fee) but we can trade any TF as he has stated this many times.

yes I guess your right.. but you made a valid point too prop firm swap fees would be far too much for the trader so you would have to exit within the same day as you stated. Are the arrows only used just for the stoploss as you stated?… because if so you could just trade without them and set the stoploss each time at the last low or last high. Also why do we need to use Heikin Ashi candles for this strategy what is the purpose of them?

CM-PunkFX,

Questions are valid but too early, first we lay the foundation as the 1% Strategy and the EMA Strategy use the same trading system Indicators and we must reduce these Indicators to gain strategy understanding and simplicity (clarity) - basic 101. Once we get our mind around the simplicity of the basic strategy, then we move to Basic 102. Your answers will come next week.

Many thanks for the education and knowledge you have provided... I look forward to further details on how we can improve the strategy.

which indicator is the green and red arrows you have here gringo and what settings do you have them on?... thanks in advance.

Default settings and color is your choice...

Excellent thank you gringo…. Where do I also find that color moving average and is it set at default settings… your screenprint looks interesting so I want to set it up to take a look at it… or is there a template you can direct me to my friend.
Much appreciated