Linuxtroll Simple Scalping | Page 68 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Trying scalping with a 1000 bucks - Scalping is expensive! 39 replies

Indicators and Rules for Simple Method of Scalping GBP/Jpy on 5 min chart 18 replies

1M & 5M Scalping System (Scalping Paradise) 21 replies

Simple Scalping System 64 replies

xPip Simple Scalping 27 replies

Attachments: Linuxtroll Simple Scalping
Exit Attachments

Linuxtroll Simple Scalping

  • #1,341
  • Sep 12, 2007 4:32pm Sep 12, 2007 4:32pm
Quoting cesande
Sorry for the dumb question, but what are you referring to when you state 1R?

Thanks
cesande, not a dumb question at all! It's a term Van Tharp uses in his book "Trade Your Way to Financial Freedom"--it's an extremely good book, the best trading book I've ever read. It basically just means the amount risked on a trade. He defines a trading system by what he calls an "R-multiple distribution." Here's a quick rundown.. take your record of your last X number of trades (say, 100). Note the initial risk of each trade (say, 10 pips + spread of 1 pip = 11 pips). Now divide your profit or loss by this value. So, for a winner of 15 pips, you get 15/11 = 1.36. So, you made 1.36 times what you risked. If you lost, but let's say you moved your stop up and got out with a 5 pip loss, then you came out at -0.45R. Still a loss, but better than 1R! You take this value for all trades, add them up, and divide by the number of trades you evaluated to give you an average R-multiple value of what you can expect from your trading methodoly in the future--Tharp calls this "expectancy". Obviously, a lot more than 100 trades is desirable, but that's just an example I used. So, let's say I come out with an expectancy of 1.2R. Thus, over a period of the next 100 trades, I can reasonably expect to make 1.2 times whatever I risk per trade. If I risk a fixed 0.5% of my equity per trade, for example, then after 100 trades I can expect to make 100*1.2*0.5 of my equity, which is a 60% gain--in a day trading or scalping system where you may get this many trades in 2 or 3 weeks, with this kind of position sizing, you would see phenomenal increases in your equity. Of course, that's a simplified overview, and there's a lot more calculation to do to determine max drawdown, which is crucial in position sizing (if your max drawdown is -15R, then obviously a 5% risk per trade position sizing strategy is probably not good, for example), but that's the basic idea--sorry for not explaining it sooner. I would highly recommend his book--it will totally change your perspective on trading--don't let the gimmicky "financial freedom" part in the title make it sound cheesy--it's one of the best out there. Happy trading cesande!
  • #1,342
  • Sep 12, 2007 4:35pm Sep 12, 2007 4:35pm
Quoting Arctic4x
Yes, i am a "Ekte Tronder" Hehe..
Charge on make money... I like Tronder Rock -- Åge Aleksandersen -- for example "Snørosa"...
  • #1,343
  • Sep 12, 2007 4:40pm Sep 12, 2007 4:40pm
Quoting linuxtroll
Oh! You are all over the map and confused... You are talking about money management... Key elements in Money management

Do not mislead the Linuxtroll Simple Scalpers... Let them learn the tool of the trade (to develop their business)... and there are more to it...

Please do not take my reply wrong -- just google and read those topics and post some matras here that all can follow... that will help all Rainbow scalpers... LoL
Different terms, same concepts my friend. :-) Again, I respectfully (a word you have not yet used I notice) disagree about my confusion... if you would actually read what I'm saying, I think you'll see it's very much in line with what you're saying, perhaps with different terms, and trust me, I've used google a thousand times and learned those terms. I have clearly explained myself and what I'm talking about, and have done anything but be "all over the map"--I've talked about crucial concepts that all traders must understand, whether it be through success or from an understanding in retrospect when they've blown a lot of money. Out of respect for this being your thread I will stop here, but I believe I have done anything but misled people here. I believe each trader must find his or her own mantra--far be it from me to impose my beliefs on anyone.
  • #1,344
  • Sep 12, 2007 4:46pm Sep 12, 2007 4:46pm
Quoting g-dogg
Whoo slow down there buddy you dont have to be all in your face like that, look we both obviously have diffrent understanding of scalping...,
...

yes you will loose no one said you will be trading 100% right all the time... but you will probably have a 9:1 win to loss ratio, and always keep your stop tight. and as Pale rainbow mentioned
Wow man, I had no idea I seemed so confrontational--I apologize. The fact is that it doesn't matter what your win% is, if your risk is too high, when you experience a long losing streak, which is totally within the bounds of a high win% system, then you will blow your account. Hopefully you and others understand what this means. I'll just end on that.

Quote
i believe we both have different trading methodologies and it doesn't matter as long as we both continue making profits using the rainbow lol

I agree g-dogg--if you're making consistent profits then that's what matters. Happy trading!
  • #1,345
  • Sep 12, 2007 4:53pm Sep 12, 2007 4:53pm
Quoting dominicanosrus
I agree with you 100% Josh. Controlling position size is crucial. I've never been a fan of using a huge amount of leverage even when scalping. I've dealt with many traders and never met one yet that uses more than a 25:1 leverage and succeeds in the long run. I'm not saying they're not out there, but trading too many lots relative to the account equity introduces another huge theoretical risk into the equation; the risk of suffering an unexpected gap or system failure that blows up the account. Even if a scalper is only in a trade for seconds, there's a theoretical risk of this occurring. I know that this probability is really low, but if it happens, it's all over. It's just like buying homeowner's insurance. Chances are that a hurricane or another natural disaster will never hit your neighborhood hard, but that doesn't mean that you should not purchase insurance. Any blip can blow a high-leverage scalpers account out of the water. Even with a high win-loss ratio and short trade duration, we limit the leverage for our auto scalper to less than 10:1 (usually 5:1 or less).

I know there are cocky traders out there that go by their trading day with a it-won't-happen-to-me-becauase-I'm-so-good mentality; but trading is not about being cocky. It is about being safe. Just my two-cent's worth.
It is all about making money -- smarter and before you get old... Background and Research in Threat Risk Assessment will help (natural disaster is one of the elements)... Linuxtroll Simple Scalping is based on it... Mantra clearly explained it and anyone who are familiar with the basic scalping theory will understand -- there are flippers in this world too... Let the new scalpers focus on learning the tool of the trade first - that's why I created this thread - do not confuse them with half baked money management and risk management... Please start a separate thread to promote ECN, Brokers, Money Management, Risk Management or any other trading styles etc... LoL
  • #1,346
  • Sep 12, 2007 4:57pm Sep 12, 2007 4:57pm
This is the closest I've seen a forum stay "borderline" without actually ever going into a flame war. omg FFF(forexfacotryforeva), Peace can't fight war! (thats what some middle schoolers wrote in chalk near my place...I think War can fight peace tho)


But how about this -

would it be true to say that a good developing spine has price, and the MA's headed in the same direction... right? Right!
Then the next step is... the MA's need to be condensed and decompressing... right?

Everytime someone points out a "good spine" there are a bunch of MA's that are very close forming a thick band... is that an essential part of the spine?
"Please sir, may I have some more pips?"
  • #1,347
  • Sep 12, 2007 4:57pm Sep 12, 2007 4:57pm
Quote
Originally Posted by JoshDance http://www.forexfactory.com/images/buttons/viewpost.gif
Wow man, I had no idea I seemed so confrontational--I apologize. The fact is that it doesn't matter what your win% is, if your risk is too high, when you experience a long losing streak, which is totally within the bounds of a high win% system, then you will blow your account. Hopefully you and others understand what this means. I'll just end on that.

I understand perfectly well, Josh. What you say is true. Not only do you risk blowing up your account using very high leverage if you experience a losing streak, but also due to circumstances beyond your control; like unexpected gaps or a system failure while you're in a trade. It is a possibility. A high win-loss ratio and small stops doesn't justify taking excessive risk. I think your point is pretty clear. I don't see why your posts are being interpreted as "confrontational."
  • #1,348
  • Sep 12, 2007 5:01pm Sep 12, 2007 5:01pm
Quoting dominicanosrus
Yeah; hindsight trades are the best. "I would have bought here, sold there, taken the money for a trip around the world...;" all that good stuff!

Yes; the avatar is my 8-month old son Kaiser. Thanks for the compliment. Mommy says he has Travolta's [her favorite man on earth - after me, of course] chin. My profile shows my picture with my 2-year old princess.
Oh, I just noticed the profile picture... Looks like a very familiar face... Ho Ho Ho... LoL
  • #1,349
  • Sep 12, 2007 5:04pm Sep 12, 2007 5:04pm
Quoting megamo
Hello Ikons8 and Rem, I have a few questions about the booktrader you guys are using.. The booktrader tool that you have a pic of, you said its available through IB, do you mean interactive brokers? I had gone to their site and didn't see anything about booktrader, just ideal and ideal pro..

Anyhow, how do you find is the execution with the platform and broker you are using? I'm assuming its an ECN setup?? And what is the leverage offered and the account minimum to trade those spreads and get the booktrader?? And last but not least, how do you find their price feeds compared to oanda, is it off by alot or a few pips??

I'm not concerned with the spread being 0, if its 1 pip to 1.5 pip I'm happy, as long as their commissions aren't ridiculous like EFX.. I'd trade 5 - 10 lots so commissions is a big factor.. What is the commission structure they have?

Thank you both in advance for the info..
Hi,
IB=Interactive brokers. It is ECN. Booktrader is a software in IB. You can quickly find all the answers with search box ( top right on IB main page).
Regards
  • #1,350
  • Sep 12, 2007 5:26pm Sep 12, 2007 5:26pm
Quote
Originally Posted by linuxtroll http://www.forexfactory.com/images/buttons/viewpost.gif
Oh, I just noticed the profile picture... Looks like a very familiar face... Ho Ho Ho... LoL

Yup! It's a small world under the rainbow! LoL

Still waiting for Ninja to come up with the magical solution for the bigger empire! Will keep you posted. Or maybe I'll just get my wife to read your e-book and let her trade. I might retire faster like that.
  • #1,351
  • Sep 12, 2007 5:27pm Sep 12, 2007 5:27pm
Quoting J2FcM
This is the closest I've seen a forum stay "borderline" without actually ever going into a flame war. omg FFF(forexfacotryforeva), Peace can't fight war! (thats what some middle schoolers wrote in chalk near my place...I think War can fight peace tho)
No need for flame wars were all like family here in FF, were all working hard to better each other's trading
Egyptian and proud of it!
  • #1,352
  • Sep 12, 2007 5:31pm Sep 12, 2007 5:31pm
Quoting cesande
Sorry for the dumb question, but what are you referring to when you state 1R?

Thanks
When asked about making money in the stock market Warren Buffet the Worlds most successful investor replied;
“There are only two rules to making money in the stock market
Rule no 1. Don’t lose money.
Rule no 2. Follow rule no 1”...

It is in fact a very important factor in being successful and making money in the markets. If you can eliminate your losing trades all that you will be left with are winners...

There are so many formulas given to us by many Gurus in the field - for example...

Expected net profit/loss per trade Formula:
E = (Pw*Aw) – (Pl*Al)
Where
E = Expectancy (net profit/loss per trade)
Pw = Percentage win
Aw = Average win (reward)
Pl = Percentage loss
Al = Average loss (risk)

Do not worry too much and learn the tool of the trade... 5 sec Rainbow...

Fortunately there is a simple calculation to tell you the optimum amount to risk per trade in relation on your previous trading results; the equation is called Kelly’s value...

If your risk and reward are equal i.e. 1 then Kelly’s Value is simply:
Kv = (2*P) –1
Where
Kv = Kelly’s Value (The optimum % of capital to stake without the risk of ruin)
P = Win Probability (i.e. your win/lose ratio as a %)
So if your system wins 53 times out of 100 the calculation would be as follows:
Kv = (2*0.53) –1 = 106 –1 = 6 or 6% of your capital.
Should your system win 80% of the time the results are:
Kv = (2*0.80) –1 = 160 –1 = 60 or 60% of your capital.
Note in the second example you have the ability to make your capital work 10 times harder.
If you have a risk/reward ratio other than 1 this can be incorporated into Kelly’s formula thus:
Kv = P – (1-P)/Wl
Where
Wl = your risk/reward ratio as a %...
  • #1,353
  • Sep 12, 2007 5:45pm Sep 12, 2007 5:45pm
Quoting PaleRainbow
For now I am only observing the chart, so I havent yet done any demo-trading on this pattern. The demo-trading I did before was mostly messy bad choices, so about a week ago I decided to sit down and watch the chart untill I start to see a pattern.

The first one with similar pattern had the same price-level through the whole spine arching between time-line and price-line. So I would have got in before it jumped. But that one didnt go far before it turned up again.

Thats why I am still only observing.

What I feel right now, hypotethically, is that if I enter at the time-line then it will be a "take a chance"-trade. And if entering at price-line the jump would have already happened.

But if you look at kharvell's last post where he posted his chart, you see that the arching was there too before it went up. He entered before the time-line so he got in before the arching of spine happened. And one of LinuxTrolls attachments also had that arching and he said clue is at the time-line.

As for the 2pip h-line increment...lol....I havent yet figured out how to change the increment of that grid!!! It may be this is what I need to change to see better where to enter.

Maybe LinuxTroll would give us advice on what increment he think works best with the 5 seconds chart?

JoshDance, I did a typo in that comment on the chart. I meant spine where I said price. Sorry for the confusion.

As for the "male ego" comment. I think my meaning of "male ego" is that I notice sometimes that some hasnt so easy to let go of a discussion and then the topic is sidetracking. To say it generally (this is absolutely not something that is happening with everyone!!): when men does it, its because they have this innate competition feeling where they want to win a discussion. When women sidetrack, they usually are in a mess of feelings and dont know what they really want. lol

But yes, money management is very important, of course.

PS: pkchilly, I forgot to answer about exit. I think that exit would be different depending what mood I have. If I am patient I use to wait abit to see if its going down more. If I am not patient, then I exit as soon as it starts to go upward again. That is what I have noticed on the demo-trading before. I have yet not decided what rule I want on exit. Jump out at first upward movement and then enter again, or wait and see.....
time line (v-line) -- find the most active market time
price line (h-line) -- guidance for entry/exit and risk management (say 10 pips scale - you can measure how many pips moving in your direction or against your direction to take action)

One constructive comment - do not sit and watch the screen - jump in and out; scalp - that way, you will master Rainbow quickly... Find the market active time - jump in and out... (you do not just sit and watch people skiing - jump in and ski - feel the wind and speed - you may fall but at the end you can ski as you are born with the ski - fodt med ski paa beina) LoL
  • #1,354
  • Sep 12, 2007 5:49pm Sep 12, 2007 5:49pm
Quoting Canyouseeme
Oh and for the music: Try to get something that is rhytmic, slow, the best things are thoose with some buzzing sound this is veery relaxing for the mind.
Dont get anything with a piano or sth trompet-like *lol*.
I like the ones that sound like a rainforest or sth like that. Just some chirping, stuff like that.
Just go and search for some "yoga" or "meditation" music on your legal music finder of your choice
What about some heavy metal in the background... Currency making metal noise... Ho Ho Ho... LoL
  • #1,355
  • Sep 12, 2007 5:59pm Sep 12, 2007 5:59pm
Quoting JoshDance
Different terms, same concepts my friend. :-) Again, I respectfully (a word you have not yet used I notice) disagree about my confusion... if you would actually read what I'm saying, I think you'll see it's very much in line with what you're saying, perhaps with different terms, and trust me, I've used google a thousand times and learned those terms. I have clearly explained myself and what I'm talking about, and have done anything but be "all over the map"--I've talked about crucial concepts that all traders must understand, whether it be through success or from an understanding in retrospect when they've blown a lot of money. Out of respect for this being your thread I will stop here, but I believe I have done anything but misled people here. I believe each trader must find his or her own mantra--far be it from me to impose my beliefs on anyone.
Respectfully (You do not need to ask to get it, but earn it) - If you read carefully your terminology and beliefs may confuse the scalpers - and you can start your own thread to explain it - this is all about Linuxtroll Simple Scalping... Again, Money Management and Risk Management are different animals... and I leave it at that... LoL
  • #1,356
  • Sep 12, 2007 6:07pm Sep 12, 2007 6:07pm
Quoting dominicanosrus
[i]

Yup! It's a small world under the rainbow! LoL

Still waiting for Ninja to come up with the magical solution for the bigger empire! Will keep you posted. Or maybe I'll just get my wife to read your e-book and let her trade. I might retire faster like that.
Absolutely... Welcome to the thread Big D... Why Ninja... Create Ninja Turtles?... Let's create our own platform for the empire... Platform will only allow 5 sec Rainbow chart and a ladder to scalp 500 trades per minute... Need extreme liquidity... LoL
  • #1,357
  • Sep 12, 2007 6:10pm Sep 12, 2007 6:10pm
Quoting linuxtroll
and you can start your own thread to explain it -
Done. Will be updating it periodically.

I hope you don't mind if I continue to post chart setups here as I see them, maybe they will help some, and hopefully others will let me know what mistakes I'm making in my setups and I can get better at this! But per your request, I will stick to setups and entries/exists, and leave other things out of this thread. As always LT, happy trading! :-)
  • #1,358
  • Sep 12, 2007 6:14pm Sep 12, 2007 6:14pm
Quoting g-dogg
No need for flame wars were all like family here in FF, were all working hard to better each other's trading
No flames please... Let the Troll light the flame for you... I have used that in my e-book... I will release it soon and you all will understand the usefulness of flame and spine... Ho Ho Ho... Different kind of Rainbow flame... LoL
  • #1,359
  • Sep 12, 2007 6:21pm Sep 12, 2007 6:21pm
Quoting JoshDance
Done. Will be updating it periodically.

I hope you don't mind if I continue to post chart setups here as I see them, maybe they will help some, and hopefully others will let me know what mistakes I'm making in my setups and I can get better at this! But per your request, I will stick to setups and entries/exists, and leave other things out of this thread. As always LT, happy trading! :-)
Good stuff...

Are you new to Linuxtroll's posts? We must have some sense of humor here... Charge on and post your charts and ideas here... If you read carefully, that's what I meant by post your mantra here... We can always redefine the existing mantras, so that all can make money and increase our wealth... Once everyone mastered the setups, we will start other very important topics to boost the scalping... Now tool of the trade - 5 sec Rainbow chart (if you do not like 5 sec; use 30 sec - better results than 1 min)

Cheers,
  • #1,360
  • Sep 12, 2007 6:45pm Sep 12, 2007 6:45pm
Thanks LT--I'm also eagerly anticipating your e-book, get it out already man! :-)
3 traders viewing now