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C4 Scalping

  • #21
  • Jul 10, 2009 11:33pm Jul 10, 2009 11:33pm
Quoting DETrader
[font=Times New Roman][size=3]This is going to see odd to some people, but this is mostly in response to the probability spreadsheet. What people forget (and for the record I trade live), is one does not need to take into account the spread when looking at profits, Why? This is simple businesses math here, profits only come into play once debt is paid, when you make a trade your already in debt 2 pips, your take profit is 10 pips and will not trigger until the price action has moved 12 pips, which equals 10 pips profit. I know on my account the...
My question to you is, how do you test a system like this? What is the general way of testing a system? Im talking about the average person who first tests this system. Its simply scrolling back on your charts and catching all the profits and losses. When you backtest you don't take into account the fact that you started with a debt of 2 pips. Most people see a 10 pip gain, so they note it down as that, even though its actually 8 pips. Thats a 20% difference. Also when there is a loss of -10 pips, generally people note down just -10 pips. Not the loss PLUS the spread. Thats another change in 20%.

If you do trade live then you know that misleading your calculations by 20% on each side, makes a significant difference.

Now, I'm going to make a big assumption that a lot of people backtest when they first find a system. So yes, the spread matters more than you would realize. Especially if your scalping 5-15 pips, which seems to be more or less the case in this situation.
  • #22
  • Jul 10, 2009 11:34pm Jul 10, 2009 11:34pm
Quoting millionaire7
Hi,

Good scalping system.
Does the smtrix indicator repaints.

Thanks.
No, neither trix indi repaints. Intentionally stayed away from posting potential indi's that repaint. All are live.

The TM and MA colored indi's may change colors as they are working on a current 5m candle but other than that the indi's selected should be as good as any others.

Regards.
  • #23
  • Jul 10, 2009 11:58pm Jul 10, 2009 11:58pm
Hi Edge,

Do we wait for the 5 minute candle to close before entering a scalp trade? BTW, on first blush, it seems simply by entering/exiting when price crosses back and forth over the 12 LWMA can be profitable.

Thanks for sharing!
Bob
  • #24
  • Jul 11, 2009 12:17am Jul 11, 2009 12:17am
Edge,

You state above...

3 - SM Trix (set at 12,3,false,1500 on the inputs tab). In the 'colors tab, make sure zero (0) is set to 'none'. Make #'s 1 and 2 the same colors as your bullish and bearish candlesticks.


Shouldn't it be...

3 - SM Trix (set at 3,0,false,1500 on the inputs tab). In the 'colors tab, make sure zero (0) is set to 'none'. Make #'s 1 and 2 the same colors as your bullish and bearish candlesticks.
  • #25
  • Jul 11, 2009 1:01am Jul 11, 2009 1:01am
Hi Edge,

Could you post your template aswell please?

E.
  • #26
  • Edited 7:09am Jul 11, 2009 1:17am | Edited 7:09am
Quoting Ace284
My question to you is, how do you test a system like this? What is the general way of testing a system? Im talking about the average person who first tests this system. Its simply scrolling back on your charts and catching all the profits and losses. When you backtest you don't take into account the fact that you started with a debt of 2 pips. Most people see a 10 pip gain, so they note it down as that, even though its actually 8 pips. Thats a 20% difference. Also when there is a loss of -10 pips,...
1. The general and best way to test a system is to trade it. If not live then on demo. Backtesting a scalping system is like enjoying yourself - very often just a way to avoid real trading
2. What you said considering spread is absolutely incorrect. You never start your trading with any debt of spread, you just start it at a different level if buying and exit at different level if selling. And if you take a profit of 10 pips then you got 10 pips. So, in fact, spread is a thing that a trader has not to worry about. You just have to remember that the more the spread, the more the entry/exit price is different from yours. So, I think pairs with smaller spread are more comfortable for scalping. But at the same time, pairs like GBPJPY have bigger volatility that may compensate the bigger spread.
  • #27
  • Jul 11, 2009 1:20am Jul 11, 2009 1:20am
Why you use the word scalping when you refere to 5M charts?

Wouldn't it be better to call this method C4 day trade?
  • #28
  • Jul 11, 2009 2:10am Jul 11, 2009 2:10am
Hi Edge
Looking forward to some interesting posts. Can I request that (in my case) you just keep your finger off that damn "ignore" button!! However, I will be quick to use it if sweetpea sticks his bib in.http://www.forexfactory.com/images/icons/icon10.gif
Regards Karl.
  • #29
  • Jul 11, 2009 2:18am Jul 11, 2009 2:18am
Quoting cobraforex
Why you use the word scalping when you refere to 5M charts?

Wouldn't it be better to call this method C4 day trade?
Worried this'll get more popular than yours? Obviously.
  • #30
  • Jul 11, 2009 3:17am Jul 11, 2009 3:17am
Hi Edge.... I would like to request you to kindly put a template also. I further request all Edge follwers to follow the same template to avoid confusions.

Thanks
Make money Not pips
  • #31
  • Jul 11, 2009 3:47am Jul 11, 2009 3:47am
Edge
please, send your template.
Persian Gulf forever
  • #32
  • Jul 11, 2009 5:46am Jul 11, 2009 5:46am
If this helps anyone, be my guest
Attached File(s)
File Type: tpl c4 scalper.tpl   3 KB | 4,089 downloads
  • #33
  • Jul 11, 2009 5:55am Jul 11, 2009 5:55am
Quoting Pips Queak
Worried this'll get more popular than yours? Obviously.


No I don't think so. M5 is definitely not scalping.
-2 SCOOPS OF PROFITABLE RAISINS
  • #34
  • Jul 11, 2009 6:29am Jul 11, 2009 6:29am
Quoting scoops
No I don't think so. M5 is definitely not scalping.
How would you call it then? If the idea is to take quick profit by 10 pips then it cannot be called day trading, can it?
The best thing with Edge's system is, of course, that it works at any timeframe. So, it is really very good also for starting swings. But for these entries, I would use some additional indicators as the possibility of failure is bigger.
  • #35
  • Jul 11, 2009 8:42am Jul 11, 2009 8:42am
So already we have someone saying trading off a 5 minute chart and going for 10 pips is NOT scalping?? I suppose it's not a true scalp unless you trade from a one minute chart and go for two or three pips? Edge, for the purists, maybe you should rename the thread "Trading from a 5 minute chart and shooting for ten pips DAY trading system". Whatever anyone else might call it, I call it scalping. Not sure why it matters what it's called, though, as long as it works.
Quoting Indrek
How would you call it then? If the idea is to take quick profit by 10 pips then it cannot be called day trading, can it?
The best thing with Edge's system is, of course, that it works at any timeframe. So, it is really very good also for starting swings. But for these entries, I would use some additional indicators as the possibility of failure is bigger.
  • #36
  • Jul 11, 2009 8:55am Jul 11, 2009 8:55am
Quoting Indrek
2. What you said considering spread is absolutely incorrect. You never start your trading with any debt of spread, you just start it at a different level if buying and exit at different level if selling. And if you take a profit of 10 pips then you got 10 pips. So, in fact, spread is a thing that a trader has not to worry about.
I'm sorry but you have no idea what you're saying. I strongly suggest that you read your post again. You just stated that spread is nothing to worry about. That's one of the biggest error people make when scalping. I proved that spread does matter, mathematically in my excel document. Where's your proof? Yes you do start of with a debt of -2 pips or whatever the spread is when you open a long position. If its a short, then the spread will be added when you close the position.

Spread is nothing to worry about.....wow.

Here's a typical situation with threads like these, the scalping ones. And this situation has happened with hundreds of scalping threads. People backtest and when they see an entry, they mark it down. They assume that their profits will be the entire wave due to hindsight, which won't be the real case when they're trading live. That opens up lack of money management. Second is the spread. People generally don't calculate the spread when backtesting. Especially the new traders, and thats a fact.

Have you ever wondered, why your backests seem more profitable then your real time trades. For scalping, SPREAD is in the top 3 reasons why.

If anyone can actually disprove what im saying, then please be my guest.

I'm just setting the record straight, near the start of the thread.
  • #37
  • Jul 11, 2009 9:18am Jul 11, 2009 9:18am
Ace, seeing as I started the whole thing I will chime in again. When backtesting you are correct, one must take into account the spread and thus should be looking for 10 pip + the spread moves to see if a trade truly hit its take profit level.

However you are slughtly wrong in that the spread gets added to a short position after the take profit is hit. I have used 4 major US retail brokers and all of them always put me in "debt" by the spread no matter the direction I took, it was never taken out of my profits.

So tp sum it all up, Ace is correct that when backtesting one must take into account the spread and thus should be looking for moves of 10-14 pips to get 10pips profit, but when forward testing, be it demo or live, a 10pip profit is a 10pip profit no matter the spread, but you would not want to do this if your spreads are above 4 pips on a pair, you will lower your strike rate signifigantly.
  • #38
  • Jul 11, 2009 9:24am Jul 11, 2009 9:24am
Someone mentioned timeframes, I have seen Edge run this on 5m & 1H with sucess, and honestly it can be run on any timeframe, including the daily but you have to take into account the size of your trading account. You will be exposed to the market longer, and yes your profit levels will be higher but so will your stops. If you have a good size account then you should do well. Personaly I trade both the 5m & 1h and am forward testing higher, and for take profits on the 1H I use 25 pips as it seems to have about the same hit ratio that 10 on the 5m does.

On the topic of scalping, scalping and day trading are one in the same, some say 10pips isnt scalping, but if you regularly see 25-40 pip runs on a 5m chart and your only taking 10 of it how is that not scalping? Define it how you want but the thought behind it is the same, small profit levels, high lot amounts, limited market exposure, and high number of trades.
  • #39
  • Jul 11, 2009 9:32am Jul 11, 2009 9:32am
[quote=Edgetrader;2866815]

My personal monetary goals are modest. I seek only enough trades to allow me to reach +2/-4% to account balance daily . . .

It means you are doing 10%/week, at least. It is equal to 40%/month. And compounding each month it means 5,600% per year!!.

Is it real? Or I am misunderstanding?


Congratulations for your tread.


Regards
  • #40
  • Jul 11, 2009 9:35am Jul 11, 2009 9:35am
Absoulutely right DETrader.
Here are some screenshots to show that.
At the first screenshot, the signal is triggered at the close of the candle @ 1.38506 and market entry.
Second screen shows the "real" market entry with a spread of 2 pips @ 1.38526.
Third screen is the TP set @ 1.38626 instead of 1.38606 because of the 2 pip spread.


Quoting DETrader
Ace, seeing as I started the whole thing I will chime in again. When backtesting you are correct, one must take into account the spread and thus should be looking for 10 pip + the spread moves to see if a trade truly hit its take profit level.

However you are slughtly wrong in that the spread gets added to a short position after the take profit is hit. I have used 4 major US retail brokers and all of them always put me in "debt" by the spread no matter the direction I took, it was never taken out of my profits.

So tp sum it all up, Ace is...
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