Trading method using multi time frames for long term and scalping - YAS1R

I will try to summarize my trading strategy based on a thread which sadly is no longer on forex factory. I have been trading using this method for nearly a year and it has proven very successful for me so I hope you will all benefit or learn from it. My method is different from the original in a few ways mainly that the original method was for scalping on the 5 min timeframe, but I also use it for longer timeframes. I have put together all the indicators I use and tried to explain how to use each one effectively.

Money Management

This is the most important step in trading, please remember that 95% of forex traders lose money and by not having a good money management plan it will wipe out your account sooner or later. A lot of people learn this lesson when it’s too late so have a trading plan in place and stick with it. Don’t try to become a millionaire overnight because it just won’t happen. Taking losses is a part of the game, so always put stop losses in place and do not use mental stops as they don’t work. At the end of each week, month or year what you need is more winning trades than losing trades and you will be part of the 5% of traders who make money. If you get stopped out don’t start worrying about what losses you need to make back, that will most likely result in more bad trades. Instead concentrate on making the next trade profitable.

When I first started to trade this method I used a 0.5% risk and a 1% reward ratio per trade. I used this for 3 months and with a very good percentage of wins. After 3 months I increased my risk to 1% and reward to 2% whilst still maintaining a 1:2 risk reward ratio and continued to have a good percentage of wins. Currently I am using a 2% risk with a 4% reward ratio and tend to scale this down depending on the setup I see. This is a high risk strategy and I don’t recommend it. I would say start with a smaller risk reward ratio until you are confident with the system and have made positive pips over a decent period of time.

I trade the following pairs with this method;

GBP/JPY GBP/USD EUR/USD GBP/CHF EUR/JPY USD/JPY

It works on most currency pairs and it can also be used on indices such as the DOW and commodities such as gold and oil too.

Indicators

60 and 200 Day Exponential Moving Averages
200 is red and 60 is blue
Auto Pivots
Use Sunday data - should be set to false
Laguerre – ACS1
On the Common tab fixed minimum -0.05 fixed maximum 1.05 for both Lags.
Blue Laguerre – Inputs tab – gamma 0.6 - Maxbars 1000
Red Laguerre – Inputs tab – gamma 0.8 – Maxbars 1000
Levels: 0.15, 0.45, 0.85
Stoch Histogram – 14,3,3
MACD – 12,26,9
Gann HiLo V2
Bollinger Bands
Chandra- SAS5

How to use the indicators

Ema’s


There are 2 ways I use them:

1 – The crossovers – by this I mean when the 60ema crosses over the 200ema and vice versa. Take a look at the 1 min entry chart, once the price is above the 200ema this would be a safe entry for a long with a stop below the 60ema or below the recent low to be safer. As the 2 ema’s cross over each other and the 200ema is below the 60ema the trade would be safe by moving the stop loss below the 200ema and eventually below the 60ema as the trade progresses. In this case, the price moves above the daily pivot so once a cross takes place you know that this is the direction of the trade. This applies to all the time frames. On a day when there is movement in a single direction, you will notice that the crossovers will take place on 1min chart followed by the 5min, 15min etc. In between these crosses, there will be a price movement pulling back to the ema’s in order to make the crossovers on the higher timeframes. Bear in mind that not all timeframes will show a crossover of the ema’s.

2 – Using them as support and resistance levels– once again you can use this on all the timeframes. For example, on the 1min chart at the point of exiting the trade, the candle closed below the 60ema in line with the other indicators giving a sell signal. Also, take a look at the 30min chart as it failed to break above the 200ema and gave a clear reversal pattern in the form of a doji. I move my stops according to the ema’s on the 1min or 5min charts but I will explain this in more detail later.

Pivots

These are your support and resistance levels. You should look to enter or exit a trade at these levels. For example, if you look at the 30min or 1hr chart you will see that the price bounced off S1 with clear reversal patterns on both timeframes.

Laguerre

I also use these in 2 ways:

1 – The lags need to fall below or rise above the two levels of 0.85 & 0.15 to give a buy or sell signal. The blue lag will move first followed by the red lag, but the red lag is the stronger one. As the lags move above or below the 0.45 level or stay firmly at the top or bottom, you will see larger moves in the corresponding directions. I use the lags with the stoch-histogram, using them on all the timeframes in the order of 1min upwards. For example, take a look at 1min, 5min and 15 min charts as the timeframe increases, the stoch-histogram turns from up from negative to positive giving a buy signal.

2 – The other method is to use the blue lag with the 60ema and the red lag with the 200ema so blue to blue and red to red. Basically, the idea is to use the lags with the ema’s to work out the strength of the move when the lags are at the extremes (top or bottom) on a particular timeframe. In this case, the lags are at the top on the 5min chart. If both the blue and red lags are at the top and stay there then the price should break above the 60ema and 200ema as it did. On the 1min timeframe the blue lag and the red lag came down at different points to test the 60ema, but even when the red lag came off it couldn’t break below the 60ema telling you there is more room to the upside. Hence, I moved my stops according to the ema’s. Another example would be to look at the blue lag on the 4hr chart. It came up, hit the top and back down and failed to hit the 60ema showing more potential movement to the downside.

MACD, Gann, B-Bands etc

MACD - The crossing of the lines has to be corresponding to the trade, also above and below the 0 mark gives indication of direction.
Gann - as the price moves above the gann line it’s a buy signal and below it’s a sell signal.
B-Bands – The Bollinger Bands can be used to look out for the breaks of the mid-line or when the price breaks out of the top or through the bottom for reversal patterns. For example, the 30 min chart where the doji formed.

These are the additional indicators I use, if you are already using other indicators you may be able to use them with this method. For example, I also use the Fibonacci Retracement and Extension levels.

Some knowledge of candlestick chart patterns is essential and it’s well worth putting the effort in to learn them. I post charts of trades and I will refer to some patterns. Firstly, I tend to look at the weekly charts and I look for candlestick patterns with the direction of the lags. Then, the main chart that I use is the daily one as this gives you the general direction for the day and the days ahead. All you need is to spot the potential patterns and the general direction.

Once you have looked at the daily chart, lower your time frame to the 4hr chart, again try to spot the patterns forming and use the lags with the other indicators to look for trades in the general direction. Below, I have posted the daily chart and the 4hr, on the 4hr we have a bullish hammer so we look for a long entry with the best entry by going all the way down to the 1 min chart

I will post the charts of all the time frames down to the 1 min chart. I use the 1 min chart to enter the trade, shown by the 2 horizontal lines in this case. This is the first trade I took which was a long followed by a short trade but I will go through the first one.

1 min

Entry was at 203.00 as price moved up above the 60ema on the 1 min, notice how the lags turned up with the stoch histogram going from negative to positive, macd crossed up and above 0 , then what you are looking for is the cross of the ema’s as a general rule at the point where the emas cross each other price will hit a new high in the following minutes this will give you a buy on the 5 min chart, your stop on the 1 min would be below the doji on the left of the page about 25 pips is what I use on gbp-jpy

5 min
Now you get the same indicator signals on the 5 min as the 1 min and pay attention to the emas crossing over again, in some circumstances this will be followed by the 15 30 min cross of emas and will give bigger moves , but as it was the weekend and the sell signal came on 1-5 min with confirmation on the 15 min dojis I took profit at 130 pips

Exit

As I said above I have exited the trade, the reason being on the 1 min the candle closed below the 60ema and both 5 min and 1 min gave a sell ,now in this situation it was a Friday so people take profits as I did and using the 1 min 5min there was a sell which was good for at least 50 pips , now on Monday I would be looking for a long until a candle was to close below the 4hr hammer ie the shadow , to the upside there is a chance of the 15 min cross of emas but would use 1 min to enter if the signals come, I will post more trades as they come.



Scalping

For the safer trades, when the markets are slow I tend to scalp in the direction of the 30min to 1hr timeframes by using the lags and other indicators for direction. Then I wait for the lags to line up on at least the 1min and 5min timeframes, if you get the 15min lags lining up too this would be better and I take the scalp trade in the direction of the longer timeframes.

I know there is a lot to it and it may take a while to sink in but if you can grasp it I’m sure you will make good pips using this method. I will try to post different examples on different currency pairs so give it a go on a demo account and see how you perform. Good luck and Happy Trading!

Yas

Thanks for posting and bringing back the Imrain system here!!

Really good explained

Thanks yas1r for your promising method
I will keep following with u

looks good thanks yas

Hi Yas1R
could u please share the indicators and the template with us to be sure that out setting for indicators r right one
thanks again

Here a a list of the indicators with my template

I have posted charts from 1 min to 1hr time frame

1min entry

Entry is a long at 1.8420 as price goes above the 60ema with a stop at 20 pips below the recent low, as price pushes above the 200ema and the cross of the ema's takes place you would move your stop to break even just below the 200ema

Other time frames

As you take the entry on 1 min you will see the 5 min buy coming into play once it breaks through the 60ma and targets the 200ema on 5 min you would move your stops up using 5-10 pips below the 60 on 1 min

on the 15 min you will notice price now is at the 60ema and S3 so i would take some profit here as it should pullback from the 2 resistance levels , i tend to close 25% of my position at +50 which is where it is at and let the remainder ride, 30min 1hr you will see they look good to continue up further by looking at the lags and other indicators

similar to the cable trade , long entered at 147.23 stop below previous low on 1 min about 15 pips as the cross of the emas takes place move stop to below 200ema and then as it breaks the 60ema on the 5 min keep stop below 60ema and now waiting for a cross of emes on the 5 min, the dojis on the 15 30 min 1hr were a good indication for the direction of the trade

Good Day Everyone,

Yas, I’m happy that you decided to open your own thread, with your knowledge many of us would learn more about the wonderful world of forex, and with your charts advise we should see very good potential entries.
I will be posting more often here a few things that I already know.
If you guys want to chat we us directly, you can find us at the chat room on:

Simple Method of Scalping – by Imran Saint

You will need to install the software from www.tradingrooms.com and register and create user ID and password, then just look for the room mentioned above

I’m not sure if Yas will decide to took this chat room name or if he will change it for his own, but we will keep informing you.

We will see there,

Good Luck and have a lot of pips

Sincerely,

BetoPiPs

Hi Yas,

Good to see you post with what is now your own system - you have made it so, even if the early inspiration came from elsewhere!

I'll catch up with you in the chat room again. Please keep posting and developing this thread - I know that there is a lot of merit to it, and it'll help newbies no end! particularly with your understanding of the finer nuances.

Looking forward to it

Kindest Regards
Pardy

Hi Yas, i must commend u for this passion u have and God will reward u. If u guys will be making use of the trading room pls make sure u always come back to the thread to post chart and every other thing to help the thread continue for more learning and for the rookies to get some thing too. Hope u guys will understand. Yas pls encourage others to do the same too. I love those charts posted today on Eur and cable, the trades turn out well, more of that pls. Thanks. Nerry.

Hi Pardy

its good to see you still around, hope you are well and making the pips

yas

Here we have a doji on the 1hr and a hammer on the 30 min so you would look for a long trade , using the 1 min and 5 min entry.

I entered on the 1 min as the 5 min lags etc lined up , entry was at the 60ema and s3 again stop at previos low 15 pips, as the 5 min turned to a buy price moved up on the 1 min broke the 200ema and gave the cross of the emas and you would move your stop below the 200ema on the 1 min , the long was taken at 1.4585 and at the moment is 70 pips up at the 38.2 fib on the 1hr to continue up past the 200ema on the 5 min and give a 5 min cross of the emas it will test the S2 and possibly the 60ema on the 5 min

On this setup i am taking the trade because of the doji given on the 1hr chart so again looking for a long position on the 1-5 min entry.

1 and 5 min lined up at S2 also 200ema 1 min and entered long at 201.42 , again you will see the cross of the emas at which point you move stops to below the 200ema on the 1 min.

1st target would be S1 at 201.95 which has been hit and now waiting to see if 5 min cross of emas will come , higher timeframes at this point suggest it will and there is more upside

Great Job Yaser on your new thread and helping to enlighten many traders. May God bless you immensely. Remember that which you give you will get back 100 fold.

On this trade i missed the early entry but was concentrating on the bullish engulfing pattern given on the 15 min chart at S1, 30 min and 1hr were good for a long too.

took along just above the 200ema 1 min at 201.01, as the 1 min cross of the emas took place moved stop to just below the 200ema at 200.90 which got stopped and a loss of 15 pips, i could have kept larger stops and been safe but as the 200ema is broken id rather take a small loss and re-enter you never know if its going to sell off as the cross came, i have marked this trade on the 1 min chart as the ema's crossed down and then back up we got another cross of the emas to the upside.

with the higher time frames lags etc still pointing up rentered a long at 201.03 just after the emas crossed back up on 1 min it took off straight past the daily pivot and giving an ema cross on the 5 min , so was expecting it to go further up after the 1st test of the daily pivot , then the 1 min red lag came down taking the price below the 60ema with the 5 min lags turning down so exited at 201.81 giving 75 pips after spread

On this trade on the 1hr time frame it was struggling to break above the the 60ema all the lags from the 1hr and below were at the top and it couldnt break above, on the 4hr it tested the 4gr gann a few times also with the news that was out today and the dollar strength so looking for a short,

Entered at 1.8443 after the 1 min cross of emas with stop above 200ema again, i entered late because on the 1st drop just below only the 5 min was confirming the fall on the lags at this entry piont after the failed test of the 200ema , all the timeframes from the 5 min to 1hr were giving sell ie all the blue and red lags turned down and some below the 0.85 level, moving the stop just above the 60 ema on the 1 min and took profit at S2 as the 1 min buy came in to play taking profit of 144 pips

the best and safest way to scalp, take a look at the 3 chart below i have posted the 1 5 and 15 min charts i have marked out what your entry would be, it makes a big difference if you have enough screens with this method to look at all time frames,

firstly if price has bounced off support or resistance levels in this case S1 watch for the point price goes above all 3 gann lines in this case sometimes 2 is enough 1 and 5 min , at the same time all the lags start to move up

Here entry would be at 1.8312 so far it has hit 1.8350 with your trade not going against you apart from the spread