5M Channel Scalping - 100pips \ week

That TP looks a lot smaller than the channel size. Isn't it?

No.
Take Profit is measured from the pullback's highest point. You may have compared it to the entry point which is a bit lower.

I should have emphasized it - Take Profit is measured from the pullback price, not the entry size. I forgot to mention it, sorry...

Hit rate looks like it might be high. Have you come up with any
percentages?

Rob

Nice set-up there M.

As for price projections following a trendline break, of which a channel is two parallel trendlines that has described the path of price, you might want to check out some of Tom Demark's methods, or Alan Andrew's Action/Reaction lines, upon which Tim Morge and Patrick Mikula have produced some excellent literature .

This particular example was perfect. The supporting trendline (demand TD line) was very well established, and the break was also significant in that it 'zoomed through' with the open near the high and the close near the low of a comparatively long bar. This price action suggests a high probability that supply will again outstrip demand at the price level at which the trendline broke as those who were looking to buy at the trendline ditch their positions as close to break even as possible, and those prospective sellers who were unable to get in before the break will consider the price to represent value. In this example, that price is 1.3291.

Having identified this level to be an excellent area for entry, we analyse past price action to project a support level below to take profit. Taking reference from the trendline which was broken, we take the highest price between the last two demand points (1.3381) and measure the difference between that price and the trendline (1.3278), as represented by the fib in the first chart. Then we drag that fib to the point at which price interesected the trendline. The 100 level (1.3188) is the profit target. Price made it to 1.3189 on this platform.

The trend line acts like a mirror, with price action resulting in a price reaction on the other side of it. Market geometry at it's finest. It's a beautiful thing, I'm sure you will agree.

I get about 60-70% of winning trades.

But do not expect this percentage from the start. There's a learning curve in this business and this system is no different. You need to learn to draw trendlines correctly and identify channels.
These skills come with experience, and for the beginner it is easy to mix-up some patterns and to misidentify.


birdt
I have read what you say, I totally agree that trendlines act as mirrors, reflecting price behavior once they are broken. It exists in almost all chart patterns, not just channels. And Thomas DeMark's books are great.

Trading plan for next week - Channel Scalping System
2 Potential setups are attached, and I have written the full trading plan here:
http://tradewithsuccess.blogspot.com...next-week.html

Good luck everyone, lets harvest some pips!!!

I can see that eurusd on your chart already made a
great run using the same setup. Hope the new does
just as well!

Rob

Could you please clarify how you drew the fibs in the second chart? Thank you.

Updates
3% gain so far, from the trades I posted:

at the USDJPY +1%
at the EURJPY (I actually didn't post it but traded it) +2%

EURUSD barely pulled back but the quick traders could have caught it.

Updates
4 Potential Setups:
NZDUSD, 15M
NZDJPY, 15M
EURNZD, 15M
EURCAD, 1H

Good luck.

What if price, after first breaking the trendline in your chart, pulls back and breaks the trendline to the upside on one or more occasions (never breaking the swing high you used to draw your fibs on) before finally heading south. Would you have to redraw your fibs and/or drag them to a different trendline break point?

Weekly Results
The system produced +1.4% gain on equity the past week - with two trades in the Japanese pairs.
Total gain since beginning the posting: +9%, risking 1% of starting equity in each trade. You can easily gain bigger profits by risking 2-3% per trade.

Total winning percentage: 80%!

Wait for updates for more potential trades!

15MIN USD/JPY

Nice trades there, kapital.

I have added a video guide to the system, to illustrate how I trade it:
http://tradewithsuccess.blogspot.com...-to-video.html

Hey...where is the activity in this thread?

???????

http://img5.imageshack.us/img5/9041/15min.gif

I'm waiting for this upper line to break. Looks a good one. Hopefully somewhere around 1.4000

Like the looks of this very simple scalp setup, but not sure how far back/hours, to look to draw the channel.
Any suggestions?
Will test in simulator this weekend so will probably find out for myself.
Thanks for sharing...

PS: Before someone makes a rude comment, I know no one has posted in this tread in a while, but that doesn't necessarily mean it doesn't work.

This is very good system. 2-4 entry per week on USD/JPY. RR=3:1