15 Minutes TF trading

Some time ago I ran into a system that seems to be quite profitable. At the moment I'm trading demo using these rules and am satisfied by the results. Here it is:

Setup:
1) Open 15 min chart of G-J; change to candlesticks; enlarge as much as possible
2) Add Parabolic SAR, default settings;
3) Add 5 LWMA (close price); this is the signal line
4) Add 20 LWMA (close price);
5) Add RSI (5); add levels 10, 20, 70, 80
Entries (2 conditions!):
1) As a general rule, I enter a trade when RSI is between:
-70 and 80, but preferably above 80 if I go short, and
-20 and 10 but preferably below 10 when going long.
2) I also look at the candles pattern and enter ONLY if I see a trend reversal pattern.
Be careful, enter if BOTH 1) and 2) are present at the same time.

Targeting (or exits):
There are 3 indicators for a bit more accurate targeting that can be used for short entry/exit: 5 and 20 LWMA, and parabolic SAR.
- After you open a trade, you should look for EITHER 5 OR 20 LWMA line, whichever is first (usually, 20 MA is your first target, but there are situations when SAR is between these 2 MAs.
- the next target after 5 and 20 MAs cross (be careful, IF they cross!) is parabolic SAR (but sometimes 20 LWMA).

Tips & Tricks:
1) The most critical of the indicators are candlesticks and RSI; RSI will be used as an advanced warning system, next to candlesticks. RSI (5) is the fastest signal and will signal reversal way before anything is visible on any other indicator.
As you gain experience reading the RSI you may decide to take certain "risks" and enter earlier while the RSI is not in optimal position.
2) The RSI (5) on the 15 min timeframe has a range of about 100-125 pips, so depending on when you enter you will know exactly where you need to exit.
The range of the RSI (5) on 5 min timeframe is between 35-40 pips (depending on where you enter, but more like 35). So if an optimal entry on 15 min is missed, then a shorter timeframe can be used for taking a profit less than 100 pips.
3) Sometimes you can be ahead of the game even more IF you learn to read candles because you can sometimes enter based on candle patterns even before the RSI signals reversal. I recommend Steve Nison’s ''Japanese Candlestick Charting Techniques''.
4) I am also using MTF_RSI (5) and MTF_PSAR for 30 min on my actual 15 min chart. If I get the same signal from 2 different TFs, the trade has a better chance to end successfully. Also, it helps me to see what’s next.
5) Be careful with RSI divergences.
6) DON'T trade the news unless you REALLY know what you're doing. If it happens, be ready to close your trade at any time if it's going the other way.
7) Avoid going against the trend; for instance, if the trend is up and RSI is between 70 and 80, you will be tempted to enter a short. Well, don't, UNLESS candlestick configuration really suggests that. You'll see that in most cases, RSI will drop somewhere around 50 (while price will stay almost the same!) and then will go up again (but this time, along with the price).

I am only using this strategy for Gbp-Jpy, but I think it can be used for any other pair.
Well, good luck trading and I’m waiting for your feedback!

P.S. I have attached the MTF indicators and my template.

thanks for sharing this system scrat , really apprecialte it . By the way can u post out some screen shot of your system ?

ok, here's an example: last friday, usd-cad. it's a little bit different from live trading, but you still can get a pretty good idea.
blue line = 5LWMA, pink line = 20LWMA, white dots = SAR for 15 min, green dots (well the other dots that are not quite white) = SAR for 30 min; blue RSI = for 15min, green RSI = for 30 min.
look at the first vertical line. observe the bull candle and the next bear candle - it looks like a bearish harami (after an uptrend...). blue RSI was at 73, so i opened a short trade at the down arrow.
the third candle after the vertical line looked like a hammer, so it gave me more confidence about the down move that was about to come.
see how price first went through MAs, then below the white dots (15 min SAR) and even sent a spike through green dots... i closed the trade when blue RSI was at 10 (you can't see it on the chart, but it was close to 10 during live trading) - see the stop sign (little red cross).
profit for this trade: open @ 1.1542, close @ 1.1519 = 23 pips.

then i opened another trade, at the up arrow; blue RSI was around 15 (and there was a RSI divergence, if you look at the previous RSI low and compare it to the price), i closed it when RSI climbed above 70 and started to point down...
open @ 1.1510, close @ 1.1540 = 30 pips.

total: 53 pips. only on usd-cad.

there are thousands of opportunities when you look back... BUT live trading is different from what you see in chart history.
for instance, RSI has different values while a candle is still open, it can climb up or down and my decision to enter into a trade is based upon such movements - i enter when RSI "curls back" from overbought/oversold. you can't see this on history, that's why practice is the most important thing.
i think a very good approach to this strategy is to find trades that actually satisfy these rules, but don't turn out as expected. let's post them here and discuss why they turned out the other way.

Hello, Scrat, and thanks for sharing this system.

I've downloaded the template etc., but I'd like to know, if you'd be so kind, exactly how you managed to get the 30 minute RSI and PSAR on to to the 15 minute chart?

Cheers, mate.

I also have attached 2 indicators in my first post, RSI_MTF and Parabolic MTF. MTF stands for multiple time frames; if you don't have them in your experts/indicators folder, my template won't work the same (but you can manually switch between time frames, M15 to M30, so these indicators are not a must). here's a screenshot about how to use RSI_MTF, the other MTF works just the same.
It's a 15 min chart, follow the red marks for the settings.

Hi Eyevolt,

You can use multi-time frame indicators. I've attached both the RSI & PSAR ones. Enter time frame in minutes...

Good luck!

D.

lol - Hi Scrat!

Scrat and Daemian.

Many thanks for your prompt replies and info, lads.

Looks like a good system, Scrat, and thanks again for sharing.

Cheers for now.

thx for your advice Scrat..... nice system.... i want to try....
regards,

It's a interesting system,I'll try it too!

wow finally a very thourough description of a system. Thanks for the details, its nice not to have to ask a ton of quesions.