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  • #61
  • Dec 18, 2006 5:05pm Dec 18, 2006 5:05pm
I dont think that scalping is one of best ways how to make money on FX. Spread has far greater inpact on reasults then when you trade in a classical way.

Lets consider system using 6 pips PT and 15 pips SL. If there is no spread, you need any positive edge to make a profit. Now assume there is a spread of 2 pips. To make it even, you have to make two unprofitable trades and five profitables or make 5x 8 pips(6+2) and lose 2x 13 pips (15-2). To make a profit, your system has to have edge larger then 26,37%. If u traded with such an edge in larger timeframe where spread has lesser impact, your balance would grow pretty rapidly. But is u scalp, It just shield you from losing consistantly.
  • #62
  • Dec 18, 2006 8:35pm Dec 18, 2006 8:35pm
Scalping is Bad as a Plan, but it's better to take +10pips or even +4, or even -4 to then see -30 stopped.

I play alot of reversals, from very short term over extended positions, I normally get my reversal upto 20pips, normally gets turned on a resistance SMA, I've become good at spotting this and exiting in the knick of time hence becoming a unwilling scalper.

The plan of the trade is always that it'll blast through the Resistance and run for 100+ points, this does happen, if you allow yourself to be in enough of the time

New Futures broker I'm looking intos, got a instant REVERSE position button I might start flipping it and getting the trend move to soon
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #63
  • Dec 18, 2006 8:53pm Dec 18, 2006 8:53pm
Scalping, by definition means something different to everyone. I do 10-30 pip targets on 15 min chart using a "Scalping" method, but I don't consider it scalping as each position is 3 candles.
  • #64
  • Dec 19, 2006 12:08am Dec 19, 2006 12:08am
for you scalpers, do you generally trade a specific time period (i.e. the london period) and not trade others because of decreased volatility?
  • #65
  • Dec 19, 2006 12:40am Dec 19, 2006 12:40am
i scalp 5 min rsi, above 70 ad below 30, try it out...


draw half when rsi is back at 50 and move stop to open price for a freee trade and already some profit. then let the second half run untill below 30 or 70, which ever was the opposite for the entry.

i just "scalped 7 pips on gbp/usd and closed half. not the second half is runing untill the rsi is below 30and i will buy.

i am currently short.

also i tend not to trade against the trend. so when its below 30 ill just ignor it in this case.


forgot to metion stop is usualy 4-8 pips. above highest high from the last candle
  • #66
  • Dec 19, 2006 12:47am Dec 19, 2006 12:47am
Ron..

What time period on your RSI? thanks.
Don Life is expensive, but includes a free trip around the sun.
  • #67
  • Dec 19, 2006 12:48am Dec 19, 2006 12:48am
i usualy wait tho for a 78% retracemnt of the first swing down from the 70 rsi or swing up form the 30 then move my stop or more often then not you will get stoped out with your second half of the trade that you want to let run

good example the past 3 opportunites on gbp/usd
  • #68
  • Dec 19, 2006 12:49am Dec 19, 2006 12:49am
Quoting traderone
Ron..

What time period on your RSI? thanks.
14

good opportunite to again short gbp/usd stop at the last high of.194965
or a pip or two above
  • #69
  • Dec 19, 2006 12:54am Dec 19, 2006 12:54am
watch 1.9480

161%fib

might test 1.9506 first
  • #70
  • Edited 1:36am Dec 19, 2006 12:59am | Edited 1:36am
dd
Quoting jumper
I want to scalp, teach me teach me!
Jumper: First all....are you a newbie? All advice would be against you.
For one thing, you probably don't have the bankroll to trade to begin with.
Yet, "scalping" would probably be your best bet...inspite of my advice and
that is....STAY OUT OF COMMODITIES AND FOREX TRADING. Why....
the odds are too great against you, unless you have the money. If you went against my advice....then your best bet would be to scalpt. You have a better chance to make 6 pips....than you would have making 20. First you have to have a plan. Then spend your time working the demo's. Once you can get your sights set with a demo....then get into a mini...real money. So now you'll have your "real" and your "demo". If you are trading with your "real" and get 2 loses in a row.....get back into your "demo" and
find out why you are losing. Soon as you get straighten out....back on
track...start trading again with the real. The idea is to start to get
into higher leverage. Of course you have to understand "leverage". We
can't get into that, here. Now here is something that seems so many
traders don't understand. The Time Frame. The Tick is the only real
number....everything after that is history. So the DAY is the only time
that is in the 1st and 4th quantrant....the 2nd and 3rd is history. What
most traders don't understand is that the tick is part of the whole time
frame. It's truth comes at the open and ends at the end of the day....
at it's close. If you're going to scalp....you're talking about being down
in the beginning of the day. The "open" is the "mark in the sand".....
it's the beginning....and it's only the truth at that instant....but where
goes from there can only be in the 2nd and 4th quandrants. It becomes
a price and time. A Sine and Cosine, where the cartesian coordinate
comes into play. So if you're going to scalpt....you must try to stay in
perspective which time frame you will be using to get in and out.Usually,
the ticks line up as "ducks".....and then when it starts to run....it will go
into a "sawtooth" type. Much like the better made blades on your table
saw, that's if you know what I'm talking about. In the lower time frames
your scale at the right side of your chart will be short. If you use the
"tick" as part of your views the full range will be about 6 or 7 pips or
price on your chart. Another thing....you have to have fast fingers...
because you should be timing your entrance....so what you're really
doing is sitting on your hands...you're waiting, and waiting and when
you spot it....."like a lion you charge in and take down your prey". As
you go higher into the time scale the scale at the right will extend a
little higher. This keeps on until it gets into the last 24th hour. So
just remember that the tick..."at one time"....had to be at the highest
position of the "daily", "weekly", "monthly"....and if you want to make
an argument...."the black hole". Same for the low. There is much, much
more to this then what I tried to explain here. With scalp....with the
right timing, as soon as you get past the price of the spread....bring
up your stop-loss as quckly as possible. At least you will come out of
it without a loss....and beyond that if the market runs you'll come out
of it with some profit, which you should have by this time possess at
least some judgement. Try to remember this, besides money manage-
ment,.....there are only two kinds of markets, and only five kinds of
trades. Don't have the space here to explain them....but how many
guru's out there have ever even mentioned this, let alone probably even
know it. Another thing.....most of the hard sells on programs aren't
worth a plug penny. Ever one of them are real salesmen. You can get
all the stuff you want by browsing the internet....that's what it's there
for....information. And get it for free. Even some of the programs out
there like Peter Bain, Phil Newton, Joe Ross give away some of their
opinions, trials...for free. Take advantage of it....put them all together
and you probably could come up with something....check out all the
forums.....there's a lot of good stuff there....it's all a matter of choice.
You have to get blown out of the box many times before you finally
get a turkey that doesn't have to lean against the fence to gobble.
So Jumper.....I hope you get an idea what you're up against. If you
don't have the loot to "take the high road"....gun for the 6 pips, until
you have the coffer to take on the "top dogs". Be sure you know what
the "average range" of the pairs you want to trade. You will need that
in order to find a good "stop-loss". Try to use at least 20 times the
spread. I'm talking about the forex...again, there is so much to trading
that just a few words can never cover all of it. Like a lot of others on
this site have warned....you don't know where the market is going to
go....you're taking on a probable direction and what you think the
market is telling you....hoping that it's in your language.
Addendum: for fast fingers......you can find in "games" solitaire....
practice playing solitaire as fast as possible. This is much like a "fighter"
punching the "speed bag" to get his eyes in focus for quick moves.
Start slow playing "solitaire"....and then try to faster and faster...so
that when you get into scalping a trade....your eyes will follow the moves.
ciao
tonyj
  • #71
  • Dec 20, 2006 7:53pm Dec 20, 2006 7:53pm
STAY OUT OF COMMODITIES AND FOREX TRADING. <---

why are you here

Quoting tonyj
dd

Jumper: First all....are you a newbie? All advice would be against you.
For one thing, you probably don't have the bankroll to trade to begin with.
Yet, "scalping" would probably be your best bet...inspite of my advice and
that is....STAY OUT OF COMMODITIES AND FOREX TRADING. Why....
the odds are too great against you, unless you have the money. If you went against my advice....then your best bet would be to scalpt. You have a better chance to make 6 pips....than you would have making 20. First you have to have a plan. Then spend your time working the demo's. Once you can get your sights set with a demo....then get into a mini...real money. So now you'll have your "real" and your "demo". If you are trading with your "real" and get 2 loses in a row.....get back into your "demo" and
find out why you are losing. Soon as you get straighten out....back on
track...start trading again with the real. The idea is to start to get
into higher leverage. Of course you have to understand "leverage". We
can't get into that, here. Now here is something that seems so many
traders don't understand. The Time Frame. The Tick is the only real
number....everything after that is history. So the DAY is the only time
that is in the 1st and 4th quantrant....the 2nd and 3rd is history. What
most traders don't understand is that the tick is part of the whole time
frame. It's truth comes at the open and ends at the end of the day....
at it's close. If you're going to scalp....you're talking about being down
in the beginning of the day. The "open" is the "mark in the sand".....
it's the beginning....and it's only the truth at that instant....but where
goes from there can only be in the 2nd and 4th quandrants. It becomes
a price and time. A Sine and Cosine, where the cartesian coordinate
comes into play. So if you're going to scalpt....you must try to stay in
perspective which time frame you will be using to get in and out.Usually,
the ticks line up as "ducks".....and then when it starts to run....it will go
into a "sawtooth" type. Much like the better made blades on your table
saw, that's if you know what I'm talking about. In the lower time frames
your scale at the right side of your chart will be short. If you use the
"tick" as part of your views the full range will be about 6 or 7 pips or
price on your chart. Another thing....you have to have fast fingers...
because you should be timing your entrance....so what you're really
doing is sitting on your hands...you're waiting, and waiting and when
you spot it....."like a lion you charge in and take down your prey". As
you go higher into the time scale the scale at the right will extend a
little higher. This keeps on until it gets into the last 24th hour. So
just remember that the tick..."at one time"....had to be at the highest
position of the "daily", "weekly", "monthly"....and if you want to make
an argument...."the black hole". Same for the low. There is much, much
more to this then what I tried to explain here. With scalp....with the
right timing, as soon as you get past the price of the spread....bring
up your stop-loss as quckly as possible. At least you will come out of
it without a loss....and beyond that if the market runs you'll come out
of it with some profit, which you should have by this time possess at
least some judgement. Try to remember this, besides money manage-
ment,.....there are only two kinds of markets, and only five kinds of
trades. Don't have the space here to explain them....but how many
guru's out there have ever even mentioned this, let alone probably even
know it. Another thing.....most of the hard sells on programs aren't
worth a plug penny. Ever one of them are real salesmen. You can get
all the stuff you want by browsing the internet....that's what it's there
for....information. And get it for free. Even some of the programs out
there like Peter Bain, Phil Newton, Joe Ross give away some of their
opinions, trials...for free. Take advantage of it....put them all together
and you probably could come up with something....check out all the
forums.....there's a lot of good stuff there....it's all a matter of choice.
You have to get blown out of the box many times before you finally
get a turkey that doesn't have to lean against the fence to gobble.
So Jumper.....I hope you get an idea what you're up against. If you
don't have the loot to "take the high road"....gun for the 6 pips, until
you have the coffer to take on the "top dogs". Be sure you know what
the "average range" of the pairs you want to trade. You will need that
in order to find a good "stop-loss". Try to use at least 20 times the
spread. I'm talking about the forex...again, there is so much to trading
that just a few words can never cover all of it. Like a lot of others on
this site have warned....you don't know where the market is going to
go....you're taking on a probable direction and what you think the
market is telling you....hoping that it's in your language.
Addendum: for fast fingers......you can find in "games" solitaire....
practice playing solitaire as fast as possible. This is much like a "fighter"
punching the "speed bag" to get his eyes in focus for quick moves.
Start slow playing "solitaire"....and then try to faster and faster...so
that when you get into scalping a trade....your eyes will follow the moves.
ciao
tonyj
  • #72
  • Dec 20, 2006 8:06pm Dec 20, 2006 8:06pm
Can someone define what a scalper is? Some people call scalpers those that go for 5 pips, 10 pips and up to 20 pips. I would consider 20 pips a day more than great and depending on rollover a better method than leacing a trade open for 5 days to get 100 pips. So what is the official definition of a scalper.
  • #73
  • Dec 20, 2006 8:31pm Dec 20, 2006 8:31pm
<table class="luna-Ent"><tbody><tr><td class="dn" valign="top">1.</td><td valign="top">the integument of the upper part of the head, usually including the associated subcutaneous structures. </td></tr></tbody></table> <table class="luna-Ent"><tbody><tr><td class="dn" valign="top">2.</td><td valign="top">a part of this integument with the accompanying hair, severed from the head of an enemy as a sign of victory, as by some North American Indians and others during the colonial and frontier periods in the U.S. </td></tr></tbody></table> <table class="luna-Ent"><tbody><tr><td class="dn" valign="top">3.</td><td valign="top">any token of victory. </td></tr></tbody></table> <table class="luna-Ent"><tbody><tr><td class="dn" valign="top">4.</td><td valign="top">the integument on the top of the head of an animal. </td></tr></tbody></table> <table class="luna-Ent"><tbody><tr><td class="dn" valign="top">5.</td><td valign="top">Informal. a small profit made in quick buying and selling. </td></tr></tbody></table> –verb (used with object) <table class="luna-Ent"><tbody><tr><td class="dn" valign="top">6.</td><td valign="top">to cut or tear the scalp from. </td></tr></tbody></table> <table class="luna-Ent"><tbody><tr><td class="dn" valign="top">7.</td><td valign="top">Informal. <table class="luna-Ent"><tbody><tr><td class="dn" valign="top">a.</td><td valign="top">to resell (tickets, merchandise, etc.) at higher than the official rates. </td></tr></tbody></table> <table class="luna-Ent"><tbody><tr><td class="dn" valign="top">b.</td><td valign="top">to buy and sell (stocks) so as to make small quick profits. </td></tr></tbody></table> </td></tr></tbody></table> <table class="luna-Ent"><tbody><tr><td class="dn" valign="top">8.</td><td valign="top">to plane down the surfaces of (an ingot, billet, or slab). </td></tr></tbody></table> –verb (used without object) <table class="luna-Ent"><tbody><tr><td class="dn" valign="top">9.</td><td valign="top">Informal. to scalp tickets, stocks, or the like.</td></tr></tbody></table>


Quoting migamb
Can someone define what a scalper is? Some people call scalpers those that go for 5 pips, 10 pips and up to 20 pips. I would consider 20 pips a day more than great and depending on rollover a better method than leacing a trade open for 5 days to get 100 pips. So what is the official definition of a scalper.
Trade what you see - Not what you think
  • #74
  • Dec 21, 2006 12:31pm Dec 21, 2006 12:31pm
Linuxtroll,

I would like to get a rainbow chart exactly like yours but I didn't quite understand your description of the MAs involved.

Do you have a complete list of the MAs you use?

thanks.
  • #75
  • Dec 21, 2006 1:36pm Dec 21, 2006 1:36pm
Quoting ycomp
Linuxtroll,

I would like to get a rainbow chart exactly like yours but I didn't quite understand your description of the MAs involved.

Do you have a complete list of the MAs you use?

thanks.
Check Page 3 #42
  • #76
  • Dec 21, 2006 1:39pm Dec 21, 2006 1:39pm
Quoting linuxtroll
Check Page 3 #42
Hi, I couldn't figure out how to calculate the numbers in between... Surely you don't have 48 (240/5) emas? It only looks like a handful to me.
  • #77
  • Dec 21, 2006 1:49pm Dec 21, 2006 1:49pm
Quoting ycomp
Hi, I couldn't figure out how to calculate the numbers in between... Surely you don't have 48 (240/5) emas? It only looks like a handful to me.
If you do not like 48... Do 240/10... Whatever works for you... Do not forget to color it... LoL
  • #78
  • Dec 21, 2006 2:13pm Dec 21, 2006 2:13pm
Hi Linuxtroll....

Is that a CCI at the bottom of your chart? If so, what time period do you use for that? Thanks.
Don Life is expensive, but includes a free trip around the sun.
  • #79
  • Dec 21, 2006 6:06pm Dec 21, 2006 6:06pm
Quoting traderone
Hi Linuxtroll....

Is that a CCI at the bottom of your chart? If so, what time period do you use for that? Thanks.
Use 55 or 89... but you can trade without CCI...
  • #80
  • Dec 22, 2006 12:52pm Dec 22, 2006 12:52pm
Hello to all!!

While I have been perusing these forums for some time now, I have only recently begun the journey and opened a demo account. I am not an experienced trader and am hoping that you can expand my horizons on this particular method (rainbow MMA) of scalping. I have been playing with various systems/methods over the last two weeks, and seem to naturally gravitate towards the short-term. I will not be leaving long-term positioning out completelly, but would love to nail down a good scalp method.

If you have the time linuxtroll, would you mind giving me your thoughts on the following? I will apologize in advance for the amount of questions, but any input would be greatly appreciated. I spent about 16 hours yesterday playing with this scalp method and analyzing the 5 second chart (you made me open a demo @ Oanda - fancy that hehehe) and believe you when you say that it works. I am, however, having difficulty in nailing down positions - when to buy, when to exit, what types of waves/trends to enter a position on, etc...

I have noticed a couple of patterns depending on the overall state of the chart:

Trends up or down (the longer term MA moving towards 12 to 2 or 4 to 6 on a clock) are usually preceeded with a large breakout or crossover. Once the trend is established it will, of course, retrace into the rainbow fairly regularly, sometimes with some strength. It can also break out in the direction of the trend, strengthening what is already established.

My questions for this type of chart (trending) are:

1. Is this the main type of trend you are looking to scalp? If you get in at the right time this one seems to give the best pips for one trade.
- If so, how do you determine a 'breakout' or 'crossover' ending in a trend from one that quickly retraces back to the MA (or reverses) giving a loss. What conditions would prompt an enter & an exit?
- Do you play all of these strong breakouts, exiting the moment it reverses (on the assumption that it isn't going the direction you wanted)?
- Do you try to scalp the retracements in an already determined trend?

If the chart is in a consolidation pattern (long-term MA moving from 2-4 on a clock) I have noticed some fairly regular consistencies here as well:

1. The first is one I will call the 'whipsaw'. A short term breakout to one side almost always leads to a short-term breakout to the opposite side with the small possibility of a breakout leading to a longer term trend.

- I have been experimenting with trying to 'play the tops'; that is, if what appears to be a short-term trend down starts consolidating or reversing, I will enter long with the idea that once it crosses over and trends upwards, I will close my position at sign of reversal. On the EUR/JPY chart I have been looking for breakouts of at least 1.5 pips before I secure my position. This way if it reverses and trends on the other side somewhat equally, I can secure 3 or more pips (.5+ pip gain as EUR/JPY has had a 2.5 spread)

The problem I am having is that more often than not, I end up Buying low expecting a reversal, but end up in a long term downward trend, or vice-versa. I have also tried to change gears, but when I try to Short into a downward breakout, it ends up reversing and doing the 'whipsaw' thing.

2. There also seem to be regular breakouts leading to long term up or downward trends. Again, is the idea to get in at the beginning of these? or to try to jump in @ the retracements or once it has already established?

** How the heck do you distinguish between the two(whipsaw & breakout to trend)????? I am using CCI 55 for reinforcing my buys but always seem to be on the wrong end of the candlestick.

Again, should I be entering ALL breakouts and immediately exiting at the first sign of trouble? This would seem to be costly to me even at a 2.5 pip spread. 3 -5 false starts will cost you a minimum of 7.5 to 12.5 pips - you would need a really good trend to overcome that and end up ahead!

Thanks again for any help! I will keep analyzing and doing my thing - hope I didn't scare you out of this thread lol

Take care and MERRY CHRISTMAS everybody!!

(Happy Holidays too!)

D.
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