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GASP!... scalping!?

  • #1
  • First Post: Edited 10:27am Sep 16, 2008 8:45am | Edited 10:27am
I've always thought scalping was the worst possible thing a forex trader could do with their time and money. I thought I'd give it a fair shot to see what it is really all about.

I was having trouble sleeping this morning, so I thought I'd try and learn a little about scalping GBPJPY with a demo account. The earliest trade on my statement (the one that banked 366 pips) was placed yesterday and was not from scalping, so I'll just ignore it for these purposes and only scalp with this demo account. The rest of the trades were from scalping this morning. Here are the rules I adhered to so far:

5min chart with stoch (5,3,3), AC (default), and AO (default) with SMA at 14 to determine direction.

Use 1min chart with same settings to determine entry.

LONG
price action is above MA on 5min chart
stoch is crossed upward on 1min
AC is green (AO green for extra confirmation) on 1min

SHORT
price action is below MA on 5min chart
stoch is crossed downward on 1min
AC is red (AO red for extra confirmation) on 1min

SL
most recent resistance/ support

TP
always +30 pips.

This is my first day scalping with this system. Pretty successful! I'll continue to experiment with this on my demo account and see how it goes since I've never scalped before. With my live account I only trade on daily charts. We'll see how this goes!

Total pips thus far from scalping: +80


GBP/JPY 100 S 185.252 184.950 30.2 285.63 0.00 16/09/2008 09:06 16/09/2008 09:19
GBP/JPY 100 S 185.372 185.070 30.2 285.64 0.00 16/09/2008 08:35 16/09/2008 08:59
GBP/JPY 100 B 185.838 186.150 31.2 299.83 0.00 16/09/2008 08:11 16/09/2008 08:22
GBP/JPY 100 B 185.448 185.740 29.2 280.53 0.00 16/09/2008 07:40 16/09/2008 07:54
GBP/JPY 100 S 184.692 185.088 -39.6 -380.44 0.00 16/09/2008 07:29 16/09/2008 07:31
GBP/JPY 100 S 189.045 185.378 366.7 3,522.92 -26.00 15/09/2008 14:58 16/09/2008 07:01
Total 600 447.9 4,294.11 -26.00
  • #2
  • Sep 16, 2008 10:23am Sep 16, 2008 10:23am
I placed another 4 trades this morning, banking another 50 pips. I'm going to call it quits for the day. I can see how over trading can be a serious problem with scalping! I'm going to try to keep really close track of this system so here is the rundown so far and I'll post a copy of my daily closed positions everyday:

# of trades: 9
# of wins: 7
# of losses: 2
TOTAL PIPS: +130
SUCCESS %: 78%


GBP/JPY 100 B 186.328 186.620 29.2 279.95 0.00 16/09/2008 11:04 16/09/2008 11:13
GBP/JPY 100 B 185.738 186.030 29.2 279.93 0.00 16/09/2008 10:33 16/09/2008 10:56
GBP/JPY 100 B 185.153 185.450 29.7 285.90 0.00 16/09/2008 10:13 16/09/2008 10:15
GBP/JPY 100 S 184.708 185.090 -38.2 -367.74 0.00 16/09/2008 09:53 16/09/2008 10:05
GBP/JPY 100 S 185.252 184.950 30.2 285.63 0.00 16/09/2008 09:06 16/09/2008 09:19
GBP/JPY 100 S 185.372 185.070 30.2 285.64 0.00 16/09/2008 08:35 16/09/2008 08:59
GBP/JPY 100 B 185.838 186.150 31.2 299.83 0.00 16/09/2008 08:11 16/09/2008 08:22
GBP/JPY 100 B 185.448 185.740 29.2 280.53 0.00 16/09/2008 07:40 16/09/2008 07:54
GBP/JPY 100 S 184.692 185.088 -39.6 -380.44 0.00 16/09/2008 07:29 16/09/2008 07:31
GBP/JPY 100 S 189.045 185.378 366.7 3,522.92 -26.00 15/09/2008 14:58 16/09/2008 07:01
Total 1,000 497.8 4,772.15 -26.00
  • #3
  • Sep 17, 2008 11:23am Sep 17, 2008 11:23am
Well, today certainly wasn't as profitable as yesterday, but I sure learned some good lessons! I made 9 trades, 6 wins and 3 losses with a total of -58 pips. I learned things from every loss I had:

loss #1: after I entered a short trade the price action on the 5 min. chart moved to the opposite side of the MA, the candle closed well across the line and the new candle opened and continued on this side. I should have closed the trade out at this point. Instead I hung on hoping it would cross back, even though one of the criteria for my trades is that it is on the appropriate side of the MA. I could have saved myself 30 pips or so.

loss #2: I entered this trade impulsively on a hunch without waiting for any set-up! ARGHHH! thought I knew better than that. It cost me 110 pips (ouch!).

loss# 3: This trade I entered because all of my criteria were met. However, the price action was hovering around the MA and it then crossed to the other side on the 5min chart. There were 2 prominent pins indicating a possible reversal that I took note of but did not figure into my actions. Maybe next time if I see these signs I should have more patience and wait for a clearer indication of where things are heading.

Here is how things look so far:

# of trades: 18
# of wins: 13
# of losses: 5
TOTAL PIPS: +72

I'm not going to list success % anymore. Today I won more trades than I lost, but I lost -58 pips. The percentage of wins really means nothing.

Today's closed positions:

GBP/JPY 100 S 187.770 187.180 59 560.27 0.00 17/09/2008 10:46 17/09/2008 12:03
GBP/JPY 100 S 187.482 187.180 30.2 287.65 0.00 17/09/2008 10:33 17/09/2008 12:03
GBP/JPY 100 B 188.428 187.622 -80.6 -765.10 0.00 17/09/2008 10:10 17/09/2008 10:25
GBP/JPY 100 B 188.503 188.800 29.7 282.89 0.00 17/09/2008 09:50 17/09/2008 10:00
GBP/JPY 100 S 187.552 188.660 -110.8 -1,047.41 0.00 17/09/2008 09:35 17/09/2008 09:42
GBP/JPY 100 S 187.922 187.620 30.2 285.49 0.00 17/09/2008 09:23 17/09/2008 09:35
GBP/JPY 100 S 188.362 188.060 30.2 285.49 0.00 17/09/2008 08:50 17/09/2008 09:15
GBP/JPY 100 S 188.522 188.220 30.2 285.80 0.00 17/09/2008 08:27 17/09/2008 08:40
GBP/JPY 100 B 189.468 188.700 -76.8 -726.81 0.00 17/09/2008 07:59 17/09/2008 08:17
Total 900 -58.7 -551.73 0.00

We'll see how things go tomorrow!
  • #4
  • Sep 18, 2008 2:14am Sep 18, 2008 2:14am
I'm somewhat of a scalper too. Just remember it's your position size that matters and not the number of pips you make. You can become a millionare eaisily on 5 pips a day if it is consistent day in and day out.

I used to trade GBP/JPY a lot because of the massive amounts of pips to be made......................haha i just made 20 pips in 10 seconds as I was typing this, in and out on a market spike!.................

Anyway, as I was saying, then I found out that position size is more important. I trade Euro because of the 0.9-1.8 pip spread I get on it. Much better than 4-10 spread on GBP/JPY.

Let me ask you this. Say you have a 9 pip range on Euro with a 0.9 spread and a 70 pip range on GBP/JPY with a 7 pip spread. Which one would you trade? Me I'd take the Euro range, less headache, easier to manage, more predictable IMO. The spread ratio is exactly the same. Not to criticize or anything, just thought I'd add my 2 pips. Spread is important when you are a scalper.
  • #5
  • Sep 19, 2008 9:44am Sep 19, 2008 9:44am
Thanks for the post Jared! You're totally right - GBPJPY is not the best currency for scalping. I was drawn in by the huge volatility of the pair, but that spread is too much. I took tomorrow off, and today I just placed one trade and made 30 pips in 3 mins. I'm going to experiment with this a little more, and then possibly switch to EURUSD, looking for 10-20 pip gains with an increased position size.

Oh, and to the person that I replied to in private message, I have decided now to use the 1min MA as well for entries. So, I only go long if the price is above the 1min MA and 5min MA and go short if price is below the 1min MA and 5min MA. I found when I wasn't using the 1 min MA as a criterion, I would often experience a large drawdown before the price moved in the direction of my trade.

I might place a couple more trades today and I'll place the results here.

cheers.
  • #6
  • Sep 21, 2008 9:10pm Sep 21, 2008 9:10pm
Quoting Ziva
I've always thought scalping was the worst possible thing a forex trader could do with their time and money. I thought I'd give it a fair shot to see what it is really all about.

I was having trouble sleeping this morning, so I thought I'd try and learn a little about scalping GBPJPY with a demo account. The earliest trade on my statement (the one that banked 366 pips) was placed yesterday and was not from scalping, so I'll just ignore it for these purposes and only scalp with this demo account. The rest of the trades were from scalping this morning. Here are the rules I adhered to so far:

5min chart with stoch (5,3,3), AC (default), and AO (default) with SMA at 14 to determine direction.

Use 1min chart with same settings to determine entry.

LONG
price action is above MA on 5min chart
stoch is crossed upward on 1min
AC is green (AO green for extra confirmation) on 1min

SHORT
price action is below MA on 5min chart
stoch is crossed downward on 1min
AC is red (AO red for extra confirmation) on 1min

SL
most recent resistance/ support

TP
always +30 pips.

This is my first day scalping with this system. Pretty successful! I'll continue to experiment with this on my demo account and see how it goes since I've never scalped before. With my live account I only trade on daily charts. We'll see how this goes!

Total pips thus far from scalping: +80


GBP/JPY 100 S 185.252 184.950 30.2 285.63 0.00 16/09/2008 09:06 16/09/2008 09:19
GBP/JPY 100 S 185.372 185.070 30.2 285.64 0.00 16/09/2008 08:35 16/09/2008 08:59
GBP/JPY 100 B 185.838 186.150 31.2 299.83 0.00 16/09/2008 08:11 16/09/2008 08:22
GBP/JPY 100 B 185.448 185.740 29.2 280.53 0.00 16/09/2008 07:40 16/09/2008 07:54
GBP/JPY 100 S 184.692 185.088 -39.6 -380.44 0.00 16/09/2008 07:29 16/09/2008 07:31
GBP/JPY 100 S 189.045 185.378 366.7 3,522.92 -26.00 15/09/2008 14:58 16/09/2008 07:01
Total 600 447.9 4,294.11 -26.00
Please provide a chart for an example. Thanks.
  • #7
  • Sep 24, 2008 5:45am Sep 24, 2008 5:45am
This looks very interesting. Thanks very much for posting it. Being a slightly cautious scalper (is that a contradiction in terms?) I think I'll follow your example in post 5 and stick to slower-moving pairs with a tighter spread, and set my TP nearer 10 - I've always been bitten when I've tried GBPJPY, tempting though the multiple pips are (especially if you use spreadbetting for this pair).

AO and AC - please expand: Awesome Oscillator for AO? or Accelerator Oscillator? or is AC Accelerator? or something completely different that I've overlooked. Thanks!

George
  • #8
  • Sep 24, 2008 10:15am Sep 24, 2008 10:15am
Hello,this method works great for me and thought I would add my (2) pips worth.5/8/13 ema 1min-5min chart rsi @14 everytime 5/8 crosses long/short enter the next candle.stop loss is 20 t/p is 5-10 as you move into profit move your stop loss up.I am only doing $2 per pip at this time.so far today from midnight until 10:10 this am 566 pips +/- a few.also look @ stoch 5,3,3 and adx on higher t/f ie;1hr-4hr just because,thanxs.
  • #9
  • Sep 25, 2008 10:31am Sep 25, 2008 10:31am
Today was my first day trying to scalp EURUSD... I think it's way more appropriate for scalping than GBPJPY. I followed Monikroc's advice and used EMA's on 1min and 5min charts and they were very effective. I made 28 pips today off of three trades between 10:41 EST and 11:20 EST. I think I'll experiment with this some more, going for less pips but increasing position size. I'm still only using a demo on this.

Oh, and to answer the question above, AO is Awesome Oscillator, and AC is accelerator Oscillator, both on MT4. However, I'm starting to suspect that these oscillators are more predictive on higher time frames.

Here are my trades today:

EUR/USD 100 S 1.46500 1.46400 10 100.00 0.00 25/09/2008 11:19 25/09/2008 11:20
EUR/USD 100 S 1.46605 1.46500 10.5 105.00 0.00 25/09/2008 10:41 25/09/2008 11:07
EUR/USD 100 S 1.46673 1.46590 8.3 83.00 0.00 25/09/2008 11:00 25/09/2008 11:06
Total 300 28.8 288.00 0.00

Also, Thanks for the great comments and advice! I'm glad this thread has led to some good feedback and communication.

cheers.
  • #10
  • Sep 25, 2008 11:00am Sep 25, 2008 11:00am
EURUSD scalping summary thus far:

# trades: 3
# wins: 3
# losses: 0
TOTAL PIPS: +28
  • #11
  • Sep 25, 2008 11:03am Sep 25, 2008 11:03am
T o be clear, you have 5/8/13 ema on both M1 and M5 and are taking trades on the M1 when the crosses on the M1 are in same direction as cross on M5?

And for RSI 14, are you using above/below the 50 level on both M5 and M1 to determine direction?

Quoting monikroc
Hello,this method works great for me and thought I would add my (2) pips worth.5/8/13 ema 1min-5min chart rsi @14 everytime 5/8 crosses long/short enter the next candle.stop loss is 20 t/p is 5-10 as you move into profit move your stop loss up.I am only doing $2 per pip at this time.so far today from midnight until 10:10 this am 566 pips +/- a few.also look @ stoch 5,3,3 and adx on higher t/f ie;1hr-4hr just because,thanxs.
  • #12
  • Sep 26, 2008 10:17am Sep 26, 2008 10:17am
Today went well. I executed five EURUSD trades and won 4 of them, earning a total of 20 pips. Here are my trades:

EUR/USD 10 S 1.46035 1.45930 10.5 10.86 0.00 26/09/2008 11:03 26/09/2008 11:06
EUR/USD 10 S 1.46052 1.45950 10.2 10.55 0.00 26/09/2008 10:59 26/09/2008 11:01
EUR/USD 10 S 1.46182 1.46080 10.2 10.56 0.00 26/09/2008 10:40 26/09/2008 10:51
EUR/USD 10 S 1.46293 1.46190 10.3 10.64 0.00 26/09/2008 10:32 26/09/2008 10:33
EUR/USD 10 B 1.46466 1.46257 -20.9 -21.62 0.00 26/09/2008 10:14 26/09/2008 10:28
Total 50 20.3 0.00

I went live with this today. Trading live accelerates the learning process for me because I need to control my emotions more. I think in order not to over trade, I will only trade for one hour every morning and will stop after an hour regardless of whether I'm in profit or loss.
  • #13
  • Sep 26, 2008 10:18am Sep 26, 2008 10:18am
EURUSD scalping summary thus far:

# trades: 8
# wins: 7
# losses: 1
TOTAL PIPS: +48
  • #14
  • Sep 26, 2008 12:00pm Sep 26, 2008 12:00pm
Hello Benq,when the 5/8 cross on the 5 min in either direction l/s you can keep that trade in tact go to the 1min and you can trade that chart also because you will not necessarily see the moves on the 5min chart even though you are in profit that you going to see on the 1 min chart.the 5min is like the long term and the 1min is like the short term that way you can "TRADE WITHIN THE TRADE" with both charts,put both the 1/5min chart up on your screen and see what I mean.use the rsi on the 5min for your second ? thanxs.
  • #15
  • Sep 26, 2008 12:06pm Sep 26, 2008 12:06pm
5/8/13 EMA EUR/USD 1/5 MIN CHART:12:25AM-100 PIPS.4:00AM-25 PIPS.5:00AM-20 PIPS.6:00AM-9 PIPS.6:15-15 PIPS.6:55-75 PIPS.1MIN CHART 8:14-20 PIPS.8:34-10 PIPS.8:55-68 PIPS.9:42-50 PIPS.10:00-25 PIPS.10:13-15 PIPS.10:22-30 PIPS.10:47-45 PIPS.11:21-20 PIPS.11:36-25 PIPS.11:57-15 PIPS.12:13-30 PIPS.12:34-15 PIPS.12:41-10 PIPS.sO FAR TODAY 624 PIPS GIVE OR TAKE A FEW!!!!!!!!!
  • #16
  • Sep 26, 2008 12:57pm Sep 26, 2008 12:57pm
Which broker is this with --is the time GMT or what?
Are you taking any of the 5 min signals, or only on 1 minute?
What are you using for exits?
Thanks.

Quoting monikroc
5/8/13 EMA EUR/USD 1/5 MIN CHART:12:25AM-100 PIPS.4:00AM-25 PIPS.5:00AM-20 PIPS.6:00AM-9 PIPS.6:15-15 PIPS.6:55-75 PIPS.1MIN CHART 8:14-20 PIPS.8:34-10 PIPS.8:55-68 PIPS.9:42-50 PIPS.10:00-25 PIPS.10:13-15 PIPS.10:22-30 PIPS.10:47-45 PIPS.11:21-20 PIPS.11:36-25 PIPS.11:57-15 PIPS.12:13-30 PIPS.12:34-15 PIPS.12:41-10 PIPS.sO FAR TODAY 624 PIPS GIVE OR TAKE A FEW!!!!!!!!!
  • #17
  • Sep 26, 2008 3:03pm Sep 26, 2008 3:03pm
Hey Benq,I use forex.com.it is est time.20 pip stop loss in effect,thanxs.
  • #18
  • Sep 26, 2008 3:08pm Sep 26, 2008 3:08pm
I look at both 1/5min but look at the 5min first.target is 5-10 and just move the stop up progressively as I go along.I am only doing $2 per pip mini acct.it is not alot per pip but you get alot of pips.Even though you are putting your capital at ricsk more than a long term trader scalping suits my style/personality.thanxs.
  • #19
  • Sep 26, 2008 3:11pm Sep 26, 2008 3:11pm
wow... nice work Monikroc!
  • #20
  • Sep 26, 2008 3:41pm Sep 26, 2008 3:41pm
please excuse my mispelled words,pecking to fast anyway it took two years 2blown account alot of reading chart studying to get to this.thanxs to bagovino,tkimble,jacko and many others in the ff family for there "FREE" information whereas so people want to charge you $1k-$4k for a program that does not suit your style,just trying to give back so other people won't have to got through the fire as I have! PS:I HATE WORKING FOR OTHER PEOPLE !!!!!!! THEY DO NOT VALUE YOUR TIME!!!!!!!! HAVE A GOOD WEEKEND EVERYONE!
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