Hey Edge:
I would hate to be right.
I was backtesting in some hours I trade, and I found out that following your rules I got a -80 (8 out of 9 trades were -10).
There are good trades before and after with a 50/50 ratio, but I'm curious about this day in particular.
I think one of the reasons people scalp is because of the immediate retribution, so systems with a 75/25 ratio work fine.
Yes, I know that systems with a 99/1 win ratio can have 100 losses in a row. However I've seen your posts and I've never seen less than 75%
Thanks.
First, lets review and critique you posting.
1. It is not the same format I use. HA v. bar charts?
2. I have mentioned on several occasions which time of day I trade. For clarity, I have marked my normal trading time on the date of your posted chart, that being Monday, June 22. Note the vertical lines on the attached. The 'blue' section shown is where your posting refers to your back-testing efforts that are not in compliance with the time I have mentioned to trade this plan. As such, I do not feel any potential trades you have marked outside of the plan trading time need be addressed. A considerable amount of time and effort has been expended isolating the best times to implement this trading plan. Anything contrary to designed trading time has not been qualified by facts substantiating those times as appropriate nor beneficial. Until such time as a trader can justify by mathematical proof that such times are prudent to trade at, this will be the last time I will address this particular issue. Sorry!
3. As shown, I have provided my own version of the time you are questioning in BAR format to accommodate that which you are apparently using. Regardless, we can clearly see that, during the appropriate trading time, and an extra hour to boot, we have a total of eight (8) potential trading opportunities on the EU during the session.
I have taken the liberty of marking appropriate entries and exits based upon how the plan is set forth. In addition, I have shown these price points at 12 pip ranges, so as to cover the normal 2 pip spread from IB on the MT4. Now, as a caveat, I will say that ANYONE actually paying more than this on this weak moving pair (EU) is getting their asses ripped. Either find another broker or trade a different pair. Will leave it at that for now. Also, I have no clue as to where ANYONE might have entered these trades or not as nobody has provided a chart showing their entry points. So, I cannot help further when I do not have the necessary info. to review.
Back to the potential trades.
Trades 1, 2 and 3 (marked in green) ALL would be +10's with appropriate entries.
Trade 4 (orange) was positive quickly and simply did not pan out.
Trade 5 (green) would have won, but it is indeed very close. Regardless, it did cover the 12 pip range needed to produce a winning trade.
We then have a 'red' news event which you should not be trading the first 5 minutes or so to begin with.
Trades 6, 7, and 8 are all excellent setups with room to spare. Slam dunk on those. So, it appears the potential for a trader to go 7-1 is present. Unless your entries are akin to throwing a dart at a chart, this should be construed as a successful trading session. In fact, tou should have be DONE after 2 or 3 trades unluss you simply like overtrading. Will address this issue once more later in the posting.
In addition, I have also attached a correctly set up chart showing these same moves during the session of June 22. As you can see, they are pretty clear from a visual perspective.
So, what other possible issues can we resolve? Further, is there anything else we can do (other than trade the correct time and charting setups) to enhance these trading opportunities?
Yes, there is. It is a simple indi on EVERYONE'S platform called ATR. This can be added on a 5m chart and I suggest that you change the default setting of 14 to a setting of 24. This way, you will have a basic view of the candle range for the previous 2 hours (24 candles x 5M = 120 minutes).
I will almost guarantee that, if you will actually do this, you will find that the period in question on this post has a ATR most of the time from between 7-11. As such, what we have here is a very weak ass pair that runs in a relatively tight size. This is especially true when trading ANY period outside of the Asian/ London or London/U.S. overlap. That tells a trader that they had better be VERY cautious on the +10 plan when trading this particular currency pair. This is also why I set forth a +5 alternative today that may help cope with this issue.
Also, I have mentioned that the GU is the SINGLE best pair to trade on the +10 plan. I have seen numerous posting utilizing the EU as the trading vehicle of choice. This is undoubtedly due to trading costs associated to each Forex pair, more commonly known as the 'spread'.
While I can appreciate the traders concern for maintaining low costs as a general principle, there are other trading considerations which carry far more weight when setting up your trading plan. Top on my list is:
"Which pair gives me the BEST chance of reaching my TP target in the most expeditious manner? And, which pair shows a history of allowing me to trade my 'edge' repeatedly during appropriate times and generating sufficient w/l ratio's to be consistently profitable?"
This is far more important when scalping than playing around with a pair that has less spread (EU). Appropriate risk per trade is one thing, trading a pair just because it initially costs you less is not well thought out. In fact, it projects FEAR, the single worst mental demon a trader can have.
So, I will leave it to you fine folks to banter among yourselves as to the merit of scalping this plan. I would suggest that, as I do, you monitor a minimum of 2-3 pairs instead of just the EU, and that you at least try to use the same setup as I do. Further, it is CRITICAL to trade the correct time periods and stop wasting your valuable trading time trying to curve fit this plan into your own PREFERRED trading times.
Lastly, I think ANY trader or potential trader in the future looking at this plan should only question its merit by providing charts with demo or small live trades CLEARLY marked on such so we can get a crystal clear look at exactly what they are questioning.
And yes, scalping is not for everyone. However, +10's are as prevalent as anything else and are abundant on most pairs. Remember, I trade at +2%/-4% on account daily. I do not like sitting there like a heroin addict trading or playing around for 6-8 hours a day. You should NEVER trade a scalping methods just for the hell of it. You will only over-trade and cause yourself some very uncomfortable times.
Watch a few pairs for a good setup, place the trade appropriately and get the hell out of Dodge!!!!!!
Regards.
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