Scalping the EUR/GBP effectively - Forturama | Forex Factory

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Scalping the EUR/GBP effectively - Forturama

  • #1
  • First Post: Edited Oct 20, 2008 7:33am Sep 17, 2008 3:06am | Edited Oct 20, 2008 7:33am
I would like to share with you a very simple and efficient scalping trading system.
I scalp 5 pips from EURGBP during Asian session (from 21 to 6 pm). At this time the volatility of EURGBP is very low and scalping becomes annoying. Some times you have to wait 1 hour to take 5 pips. But I do not look for emotion I look for constant profits.

To follow this strategy you should just believe that EURGBP respects RSI OS and OB zones (30 and 70).

When RSI reaches 70 you sell, when it reaches 30 you buy.

As I am scalping and I have just one or two signals by trading day I use a high leverage level: 5 pips is equivalent to 1% of my account balance.

RULES
Time frame: 5 min
Pair: EURGBP
Indicators: RSI (OB = 70; OS = 30)
TP: 5 pips + spread (8 pips to IBFX clients like me)
SL: Please read next posts

BUY: Buy when RSI reaches 30;
SELL: Sell when RSI reaches 70;


I know it is too simple to be true, but as I said before, I do not look for complexity, I look for pips.

Next posts I will show you some real trades.


UPDATING:
NO MARTINGALE IS USED ANYMORE
TP = 15
SL = 15
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  • #2
  • Sep 17, 2008 3:28am Sep 17, 2008 3:28am
3 trades.
Attached Image (click to enlarge)
Click to Enlarge Name: cas_simple_06.gif Size: 21 KB
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  • #3
  • Sep 17, 2008 3:35am Sep 17, 2008 3:35am
Now I will talk about StopLoss.

As I said before you have to believe that RSI zones will be respected and there will be a correction or trending changing of at least 8 pips to close your order with profit.

Knowing (or believing it) If an open position runs 5 pips against me I open a second order in the same direction with the lot size multiplied by two.

If you do not understand I propose you to search MARTINGALE here in FF.

Tonight I have a good example of martingale with this TS.

See picture bellow.

When the second order was closed the first one was at break even point. I do not know is double the lot size was really necessary.
Attached Image (click to enlarge)
Click to Enlarge Name: eurgbp_17092008-01.gif Size: 19 KB
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  • #4
  • Sep 17, 2008 3:43am Sep 17, 2008 3:43am
Ok,

Now we have to be sure that this history about RSI is really true.

I create an EA to simply buy and sell on RSI OS and OS zones.

I took 5 pips as TP and 10 pips as SL.

NO MARTINGALE IS USED. JUST TESTING RSI USABILITY.

The results are amazing.

See attached files.

Fixed Lot size = 1

INITIAL Deposit : USD1000

PERIOD: From 2004 to Last month
Attached Image (click to enlarge)
Click to Enlarge Name: StrategyTester_2004-2008.gif Size: 6 KB
Attached File(s)
File Type: zip StrategyTester_2004-2008.zip   88 KB | 1,568 downloads
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  • #5
  • Sep 17, 2008 3:45am Sep 17, 2008 3:45am
The same example with adapted to free margin lot size (limited to 500):
Attached Image (click to enlarge)
Click to Enlarge Name: StrategyTester_500.gif Size: 6 KB
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  • #6
  • Sep 17, 2008 4:10am Sep 17, 2008 4:10am
Quoting Forturama
Now I will talk about StopLoss.

As I said before you have to believe that RSI zones will be respected and there will be a correction or trending changing of at least 8 pips to close your order with profit.

Knowing (or believing it) If an open position runs 5 pips against me I open a second order in the same direction with the lot size multiplied by two.

If you do not understand I propose you to search MARTINGALE here in FF.

Tonight I have a good example of martingale with this TS.

See picture bellow.

When the second order was closed the first one was at break even point. I do not know is double the lot size was really necessary.
Thank for you strategy.

Well you told to take double size lot if trade goes more than 5 pips against us.....but do you use a SL if it continues in wrong direction?
  • #7
  • Sep 17, 2008 4:15am Sep 17, 2008 4:15am
Hi Forturama

Thanks for sharing such a lovely scalping method. I'm a amateur scalper personally. Guess your system works well with my time zone. Just my time zone start off at GMT0.

Maybe I can forward practise your method in the demo and see how's the result. I like the idea of 5pips. Coz, I only take 3-4 pips minimum per trade.
Basically no harm trying up your system.

Again, thanks for sharing.
Banker please return my pipins.
  • #8
  • Sep 17, 2008 4:20am Sep 17, 2008 4:20am
Normally I am sleeping during Asian (I am Brazilian but I live in France).

Before create an EA I tested this strategy manually and I used my RSI alert indicator. It sounds every time RSI reaches a selected value.

See file.
Attached File(s)
File Type: ex4 Rsi_Alert_FORTURAMA.ex4   2 KB | 1,992 downloads
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  • #9
  • Sep 17, 2008 4:41am Sep 17, 2008 4:41am
Quoting emeric33
Thank for you strategy.

Well you told to take double size lot if trade goes more than 5 pips against us.....but do you use a SL if it continues in wrong direction?
When using martingale you should be ready to have margin call.

The system with martingale is not mature enough and I do not had to cut positions.

with 5pips = 1%
if I have the first step against me I am 5 + 3 pips = -1.6% of account.

so I open the second step and it runs against me:
first step = 2.6%
second step: (5 + 3) * 0.2% * 2(lots) = 3.2%
total = -5.8%

I open a third step and this one is good:
first step = -8 - 5 + 5 = - 8pips = -1.6%
second step = -8 + 5 = -3 pips = -1.2%
third step = 5 pips = 5 * 0.2% * 4 = 4%

total balance of cycle = 1.2%

I know it is not simple.

Spreads are too high compared to TP and this makes a mess in the head.

About your question, you can decide risk only X% of your capital per trade, so you have to simulate how many steps this represents.
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  • #10
  • Sep 17, 2008 5:25am Sep 17, 2008 5:25am
hi Forturama,

Conceptually I do understand how suppose to work. But how many trade are you going to place before u actually stop out without hitting TP 5pips ?

Under normal circumstances, asian market are low movement, therefore we can achieve the result by maximum 1-4 trade in order to achieve 5pips.
Banker please return my pipins.
  • #11
  • Sep 17, 2008 6:03am Sep 17, 2008 6:03am
It is up to you.

Personally I have no stoploss, my stop is margin call.

Quoting Babyboy
hi Forturama,

Conceptually I do understand how suppose to work. But how many trade are you going to place before u actually stop out without hitting TP 5pips ?

Under normal circumstances, asian market are low movement, therefore we can achieve the result by maximum 1-4 trade in order to achieve 5pips.
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  • #12
  • Sep 17, 2008 6:21am Sep 17, 2008 6:21am
What period of RSI do you use?

Edit: my fault, I see it in your charts
  • #13
  • Sep 17, 2008 6:29am Sep 17, 2008 6:29am
hi Forturama
Okay, I understand fully. Just like I scalp EU during session, Whenever it goes 20 pips backward, I add another entry. So when trend resume, I'll pickup average of 4-8pips and I'm gone.

It's true thou, as we could trade safely during asian market session. Thanks for the tips. Now shall we see any green light. Bear in mind there's always a DD. If you cant live with it then dont trade this.
Banker please return my pipins.
  • #14
  • Sep 17, 2008 7:08am Sep 17, 2008 7:08am
I think a good Idea would be increase the step size each new step is open: 5, 8, 11, etc.

The problem is that greater is your step greater will be the corrections necessary to turn the cycle profitable.
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  • #15
  • Sep 17, 2008 7:24am Sep 17, 2008 7:24am
Why don't you just learn how to trade period ? If you are doing this with real money it is only a matter of time till you bust your account. If you will gamble like this in Vegas they will send a plane to pick you up if you will bring a $100,000 there. Good luck...
  • #16
  • Sep 17, 2008 7:51am Sep 17, 2008 7:51am
Here is a continuously updated statement of a similar expert advisor.
  • #17
  • Sep 17, 2008 8:43am Sep 17, 2008 8:43am
Hi,

Thank you for the link.

In fact I know the creator of this EA, he is Brazilian too.

The original idea of scalping EURGBP just with RSI came from him.

The difference is that he trades manually and there is no rule to ists martingale.

As he is a full time trader he has the time to follow the market and he is an expert on EURGBP price action.

I have an other professional activity, so I depend on an EA to trade for me.

About the performance of your link, if you look at my EA results you will see that 2008 is not a good year to this TS.

PS: I call my EA RSI_PRINCE because I created it from the idea of EURGBP_KING, the EA that is followed on your link.

In fact my idea is using Martingale with a higher probability, using the RSI and during asian section.

Quoting xux99
Here is a continuously updated statement of a similar expert advisor.
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  • #18
  • Sep 17, 2008 8:47am Sep 17, 2008 8:47am
Ok, I took note of your constructive advise.

Thank you very much.

Quoting Forexharry
Why don't you just learn how to trade period ? If you are doing this with real money it is only a matter of time till you bust your account. If you will gamble like this in Vegas they will send a plane to pick you up if you will bring a $100,000 there. Good luck...
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  • #19
  • Sep 17, 2008 8:49am Sep 17, 2008 8:49am
could you tell us what parameters you are using?

time to trade, sl and tp?

Quoting xux99
Here is a continuously updated statement of a similar expert advisor.
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  • #20
  • Sep 17, 2008 10:10am Sep 17, 2008 10:10am
Hi all,

I found some where a trade system that uses semi-martingale.

It consists in increase lot size just enough to garantee inital target profit.

Instead of increase lots like: 1, 2, 4, 8, 16, 32 semi martingale increases the lots like:1, 1, 2, 4, 7.4, 15.4.

I am sure this will reduce the margin problem.

Please see picture bellow for full understanding.
Attached Image (click to enlarge)
Click to Enlarge Name: semimartin.jpg Size: 80 KB
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