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Daily Scalping Hedging/ATR Discussion

  • #1
  • First Post: Edited Apr 11, 2007 9:55am Apr 10, 2007 11:06am | Edited Apr 11, 2007 9:55am
There is no other way of starting this thread but with thanking TKimble for his refreshing ideas and systems. I feel everyone on this forum owes him a lot.

The Daily Scalping thread is here: http://forexfactory.com/showthread.php?t=13507

I'm currently using strawstock's Rhythm EA simply because it allows you to enter a direction if you need to. The EA is here: http://forexfactory.com/showpost.php...3&postcount=10
I may be changing to skyline's EA in the future. Many thanks to both guys!

I will use this thread to post trades and ideas on my hedging version of Daily Scalping. Feel free to do the same.

Here is my core system:

I enter a hedged position immediately (instead of a single buy or sell of the original system) and I wait for a break-out. While in range I take 0 losses (not exactly cause I loose the spread). My risk is when a new range develops (false break-out) about 50 pips above the entry price. But this should be only 1 day as the next day the orders are set within the new range. If this proves to be true I plan to increase the lots as soon as a new range develops, hoping for a true break-out.

I follow the original system for entry so if it says sell, my primary order is a sell with a SL of 50 (stop and reverse) and no TP. My secondary order (the hedge) would be a buy with a TP and SL of 50. When a secondary order gets stopped out I enter a stop/limit order immediately. So I do not limit trades at the moment.

I will be exiting at 15:00 EST and re-entering at 16:00 EST just because it suits me. This may change in the future.

I just started a 5K demo to test things out so I entered late today.
  • #2
  • Apr 10, 2007 11:07am Apr 10, 2007 11:07am
Here is what happened today: Rhythm entered a sell order as soon as I started it, so I entered a buy with a SL and TP of 50. The buy is stopped out now, so I have a new buy stop at 235.28 (the original entry price).

I use alerts to trade this.
  • #3
  • Apr 10, 2007 11:17am Apr 10, 2007 11:17am
Todays chart
Attached Image (click to enlarge)
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  • #4
  • Apr 10, 2007 11:27am Apr 10, 2007 11:27am
I feel that this type of trading will be ideal for a progressive type of money management. As I said before I plan to increase lots as soon as I identify a range and hope for a clean break-out, as I mature trading this I may be changing the stop and reverse price to fit my needs.

The progression I'm opting to use at the moment is the Fibonacci progression: 1-1-2-3-5-8-13-

Please also read http://forexfactory.com/showthread.php?t=11639
  • #5
  • Apr 10, 2007 12:41pm Apr 10, 2007 12:41pm
Looks good Scientist. I like the idea of incorporating the fib levels into the mix. ATR could be a good addition as well.

How are you planning on using the fibs?
  • #6
  • Apr 10, 2007 3:49pm Apr 10, 2007 3:49pm
I found the following threads on hedging and thought they might be of interest.

http://forexfactory.com/showthread.php?t=823

http://forexfactory.com/showthread.php?t=12205

One of those threads goes as for back as 2004, but the info has been useful.

yezbick
  • #7
  • Apr 11, 2007 2:20am Apr 11, 2007 2:20am
Quoting yezbick
Looks good Scientist. I like the idea of incorporating the fib levels into the mix. ATR could be a good addition as well.

How are you planning on using the fibs?
I plan to increase the lots after we are trading in an established range (something like first day all orders 1 lot, second day 1, third 3 etc). With the hedge order we allow for a 200 pip range. Yesterday the day ended with a $200 loss. Today the sell order/buy hedge were stopped and a new set of orders triggered at 235.36. Currently the hedge order is stopped out at 235.86. Here is the chart:
Attached Image (click to enlarge)
Click to Enlarge Name: 1104.jpg Size: 98 KB
  • #8
  • Apr 11, 2007 2:31am Apr 11, 2007 2:31am
yezbick,

On another thread you mentioned starting at +50/-50. You could do that but you would not have any protection against whipsaws/ranging market. What you could do is start at those levels and then continue with the above system, saving some pips from the spread. It's not a bad idea at all.

Regards
  • #9
  • Apr 11, 2007 9:40am Apr 11, 2007 9:40am
We are currently at 236.18 and I'm plus $250. I feel that a new short-term uptrend is developing. Rhythm will be entering with a buy later today so I will be doubling my lots in hope that if it breaks up it will hold and I at least will break-even.

Here is the current chart
Attached Image (click to enlarge)
Click to Enlarge Name: 1104-2.jpg Size: 101 KB
  • #10
  • Apr 11, 2007 9:54am Apr 11, 2007 9:54am
And here is the EA I use, just in case.
Attached File(s)
File Type: mq4 Rhythm v.2.mq4   11 KB | 1,385 downloads
  • #11
  • Apr 11, 2007 1:42pm Apr 11, 2007 1:42pm
Well things didn't work-out as I expected so I'm down to 1 lot again. Todays final result -$90!

Seems like the hawkish FOMC brought down G/J.

Current chart (next update tomorrow)
Attached Image (click to enlarge)
Click to Enlarge Name: 1104-final.jpg Size: 102 KB
  • #12
  • Apr 11, 2007 6:46pm Apr 11, 2007 6:46pm
Quoting Scientist
Well things didn't work-out as I expected so I'm down to 1 lot again. Todays final result -$90!

Seems like the hawkish FOMC brought down G/J.

Current chart (next update tomorrow)
Hi: Scientist

can you please explain it details how you trade the daily scalping system with hedging,

Also what is the adventage of it ontop of the original system.

Thank you very much.
YakovZvi
  • #13
  • Apr 11, 2007 6:51pm Apr 11, 2007 6:51pm
Quoting Scientist
There is no other way of starting this thread but with thanking TKimble for his refreshing ideas and systems. I feel everyone on this forum owes him a lot.

The Daily Scalping thread is here: http://forexfactory.com/showthread.php?t=13507

I'm currently using strawstock's Rhythm EA simply because it allows you to enter a direction if you need to. The EA is here: http://forexfactory.com/showpost.php...3&postcount=10
I may be changing to skyline's EA in the future. Many thanks to both guys!

I will use this thread to post trades and ideas on my hedging version of Daily Scalping. Feel free to do the same.

Here is my core system:

I enter a hedged position immediately (instead of a single buy or sell of the original system) and I wait for a break-out. While in range I take 0 losses (not exactly cause I loose the spread). My risk is when a new range develops (false break-out) about 50 pips above the entry price. But this should be only 1 day as the next day the orders are set within the new range. If this proves to be true I plan to increase the lots as soon as a new range develops, hoping for a true break-out.

I follow the original system for entry so if it says sell, my primary order is a sell with a SL of 50 (stop and reverse) and no TP. My secondary order (the hedge) would be a buy with a TP and SL of 50. When a secondary order gets stopped out I enter a stop/limit order immediately. So I do not limit trades at the moment.

I will be exiting at 15:00 EST and re-entering at 16:00 EST just because it suits me. This may change in the future.

I just started a 5K demo to test things out so I entered late today.
At what point do you enter the new order ?

Thanks
  • #14
  • Apr 12, 2007 3:12am Apr 12, 2007 3:12am
Quoting Yakovzvi
At what point do you enter the new order ?

Thanks
It will be a stop or limit order at the price of the previous one. So if we started the day with a buy/sell (the buy being the primary) at 235.90 and the sell gets stopped at 236.40 you should enter a sell stop order at 235.90, SL=236.40, TP=235.40.
  • #15
  • Apr 12, 2007 4:10am Apr 12, 2007 4:10am
Quoting Yakovzvi

Also what is the adventage of it ontop of the original system.

Thank you very much.
YakovZvi
The advantage is yet to be determined, thats why I started this thread. I'm guessing that this hedging version will provide high probability trades (less losses from whipsaws/ranging, one of the reasons I opened only a 5k demo) so a progressive type of money management will give it more strength.

But of course forward testing will determine if its worth the hassle...
  • #16
  • Apr 12, 2007 4:29am Apr 12, 2007 4:29am
It might be a good idea to increase lots after G7, hoping that it will spark some volatility. The recent lack of comments about the carry trade may prove this wrong though. Stay tuned...
  • #17
  • Apr 12, 2007 4:30am Apr 12, 2007 4:30am
Quoting Scientist
The advantage is yet to be determined, thats why I started this thread. I'm guessing that this hedging version will provide high probability trades (less losses from whipsaws/ranging, one of the reasons I opened only a 5k demo) so a progressive type of money management will give it more strength.

But of course forward testing will determine if its worth the hassle...
Hi:

Can you please explain in details how you do the hedging trades ?

Thanks
  • #18
  • Apr 12, 2007 4:38am Apr 12, 2007 4:38am
Quoting Yakovzvi
Hi:

Can you please explain in details how you do the hedging trades ?

Thanks
I explained it in the best way I could in the first post. If you still don't get it follow this thread for a while and it will become clearer and clearer.
  • #19
  • Apr 12, 2007 9:52am Apr 12, 2007 9:52am
Looking back, it was a good call to use only 1 lot for today. Primary buy/sell hedge were stopped out and reversed. GBP/JPY moving higher now after the ECB (not very hawkish statement) dip. Lets see if it can reach pre-ECB levels or it will just sit there.
Attached Image (click to enlarge)
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  • #20
  • Apr 12, 2007 11:56am Apr 12, 2007 11:56am
The plan for later today and tomorrow:

Rhythm will be entering yet another buy later today, provided that price stays at about the same level it is now 235.30, if it breaks upwards at 235.80 there is some pretty good chance it will stay around that level if not move higher. I'm figuring this out just by watching the 1h chart, it ranged about 235.70-236 for a few hours. On the down side there is thick price action bellow 234.80. So if it does break downwards there is good chance it will stay at that levels if not fall some more.

Also note that above 235.80 will be pre ECB levels so a move up there should hold.

Based on the upon I will be playing with 2 lots and see what happens.

There is also good chance that market will just range before the G7 meeting. But we will discuss this, if it happens, tomorrow.

For reference the last screenshot for today
Attached Image (click to enlarge)
Click to Enlarge Name: 1204-final.jpg Size: 97 KB
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