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Scalping The Dragon

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  • #1
  • First Post: Edited 10:16am Apr 17, 2010 9:23am | Edited 10:16am
Hi to all. I want to share my scalping method(s) here with everyone. I have benefitted from this forum and must say I have never been the same since i joined. Thanks to all the contructive guys here.

I have tried virtually so many trading systems here and have blown to shreds so many live accounts in five years but in the end, i have evolved to be a trader with proofs to show.

With the help of you guys, i have been able to achieve a goal i set for myself and even far more. And in return, I share my GBPJPY scalping strategy.

I trade ONLY the GBPJPY so please don't discuss any other ccy here. I trade ONLY with the TREND as it is my best friend!

THE SYSTEM


INDICATORS:
= 12 and 24SMA applied to close.
= Heiken Ashi

TIME FRAMES:
= 1HR
= 5Min

CHARTS SETUP


Apply ONLY the 24 SMA on a 1HR chart
Apply the 12 and 24 SMA on the 5mins chart
Apply Heiken Ashi to your 5mins chart
Apply period separator to your charts.

THE RULES



=Wait for the 1Hr candle on the period separator to open and close. If it open and close below the 24SMA, then we are in a down trend for the day unless/until it opens and close above it again.....and vice versa.

=switch to your 5mins TF. Go long at market IF we are in an uptrend.....and vice versa.

=Heiken Ashi is for re-entry based on my plan

For re-entry, we look for candle(s) with blue Heiken Ashi for re-entries when selling and vice versa.

RISK



I don't risk more than 5% on this. I divide my risk into three (3) according to plan. 1st lot is 2%, 2nd is 1.5% and 3rd is 1.5%. T otal is 5% of my equity.

=SL is 30pips
=TP is infinity
=I use a trailing stop of 30.

Don't forget to vote
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  • #2
  • Edited 9:48am Apr 17, 2010 9:37am | Edited 9:48am
Quoting hefhem911
=SL is 30pips
=TP is infinity
=I use a trailing stop of 30
Just a few things I skeptical about.

1) Spread 5-7 pips (for scalping need 1 pip or lower)

2) stop loss 30 pips for GBPJPY? I don't think 100 pips it's enough

and same goes for trailing stop. I use 30 on GBPUSD and still 8 of 10 times

I got kicked out, while trend continues after that.

Otherwise technique should be ok, but GBPJPY is a crazy horse, when traded

on simulator I use 200-300 pips stop loss anything less will make more losses than wins
IMHO.
Viewer Discretion Advised: Shall we shag now or should we shag later? :-)
  • #3
  • Apr 17, 2010 10:10am Apr 17, 2010 10:10am
Quoting SkyzerFX
Just a few things I skeptical about.

1) Spread 5-7 pips (for scalping need 1 pip or lower)

2) stop loss 30 pips for GBPJPY? I don't think 100 pips it's enough

and same goes for trailing stop. I use 30 on GBPUSD and still 8 of 10 times

I got kicked out, while trend continues after that.

Otherwise technique should be ok, but GBPJPY is a crazy horse, when traded

on simulator I use 200-300 pips stop loss anything less will make more losses than wins
IMHO.
Well, you are right about the spread........mine is 7.

As for the stop, 30pips have worked pretty well for me (i have tried alot of values).

As for trailing stop, I don't have to pick all the pips as there are re-entry opportunities. And also, I don't want 1) a winner becoming a loser 2) give my broker an occassion to profit (the spread is sure enough). If it gives me 5 pips thru trailing stop, then am content rather than loss 5pips to my broker.

Moreso, I go with the DAILY TREND.

Thanks.
  • #4
  • Apr 17, 2010 10:24am Apr 17, 2010 10:24am
I use the 24SMA on the 1Hr chart cos there are 24hrs in a dayand since am a day trader, why use any other?

Also, there are 12 five minutes in 1hr so the use of 12 and 24SMA.

The Heiken Ashi is to help me see areas of opportunity for re-entries. And i don't take more than two re-entries cos of my risk management.
I have tried to risk my gains during the trade in order to have more re-entries but found it has reduced the efficiency of the system and my profits.

Next week, I will be posting my charts as they form while trading. I hope it helps.
  • #5
  • Apr 17, 2010 10:36am Apr 17, 2010 10:36am
What is the purpose of the SMAs on the 5 M chart?
You don't mention using them.
  • #6
  • Apr 17, 2010 2:59pm Apr 17, 2010 2:59pm
Nice simple system. Looking forward to seeing more.

Bluesteele
Markets are Mirrors,,Mastery of craft is mastery of self
  • #7
  • Apr 17, 2010 3:43pm Apr 17, 2010 3:43pm
Quoting hefhem911
I use the 24SMA on the 1Hr chart cos there are 24hrs in a dayand since am a day trader, why use any other?
No question about that, but Main point of this system is direction of

closed Bar on period separation (which should follow that bar direction

down/sell UP/buy), doesn't work. I simply enter trade on

Trade Simulator

with 200-300 SL/TP right after bar close on P. separation and there is more losers than winners

So, absolutely no point to follow and use Period separators on

GBPJPY as you mention. But if that's magically works for you, that's fine..
Viewer Discretion Advised: Shall we shag now or should we shag later? :-)
  • #8
  • Apr 17, 2010 4:53pm Apr 17, 2010 4:53pm
Quoting SkyzerFX
Just a few things I skeptical about.

1) Spread 5-7 pips (for scalping need 1 pip or lower)

2) stop loss 30 pips for GBPJPY? I don't think 100 pips it's enough

and same goes for trailing stop. I use 30 on GBPUSD and still 8 of 10 times

I got kicked out, while trend continues after that.

Otherwise technique should be ok, but GBPJPY is a crazy horse, when traded

on simulator I use 200-300 pips stop loss anything less will make more losses than wins
IMHO.
i agree 30 pips is a buget killer

i use 266 pip as a stoploss on many trades
because its a weird number
most my trades turn wins with bigger ability too move

earning 300 percent on every risk is good enough for me to take profit
200 percent is also ok

thats where i allow my stoploss to follow on my percentage i have made
  • #9
  • Apr 17, 2010 5:00pm Apr 17, 2010 5:00pm
think your system works because you follow the trend

gbyjyp

trends ok

the usd jyp
have a good balance if the usd is up then this is a great pair to trade as they are like scales

so the cable might be the same but will investigate

if you think this might be true please add your thoughts?

might not be as interest rates are fairly close now

i hate a weak pound
  • #10
  • Apr 17, 2010 6:49pm Apr 17, 2010 6:49pm
what time do you trade? I mean Asian Session, London Session, US Session or any of them
  • #11
  • Apr 19, 2010 3:20am Apr 19, 2010 3:20am
Quoting SkyzerFX
No question about that, but Main point of this system is direction of

closed Bar on period separation (which should follow that bar direction

down/sell UP/buy), doesn't work. I simply enter trade on

Trade Simulator

with 200-300 SL/TP right after bar close on P. separation and there is more losers than winners

So, absolutely no point to follow and use Period separators on

GBPJPY as you mention. But if that's magically works for you, that's fine..
Actually, i use mentioned the candle on the P. separator as it show the start of that day at midnight.
  • #12
  • Apr 19, 2010 3:42am Apr 19, 2010 3:42am
Quoting hefhem911
Actually, i use mentioned the candle on the P. separator as it show the start of that day at midnight.
Interested to learn more about your method! Please post some charts, thanks.
  • #13
  • Apr 19, 2010 4:32am Apr 19, 2010 4:32am
Quote
What is the purpose of the SMAs on the 5 M chart?
You don't mention using them.

There was a gap to the downside today. So we are in a downtrend for today. Due to the gap, i use the cross of the 12 and 24SMA as my first entry.......
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  • #14
  • Apr 19, 2010 4:42am Apr 19, 2010 4:42am
waiting for some more......
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  • #15
  • Apr 19, 2010 4:48am Apr 19, 2010 4:48am
Hi hefhem, can you clarify a couple things for me:

1. For the 30 pips SL, is spread already included?
2. Once your initial entry and the two re-entries are stopped out (either by the 30 pips hard stop or by the trailing stop), will you enter again during the same day if there are additional opportunities?

Thanks.
  • #16
  • Apr 19, 2010 5:00am Apr 19, 2010 5:00am
Quoting fthingf
Hi hefhem, can you clarify a couple things for me:

1. For the 30 pips SL, is spread already included?
2. Once your initial entry and the two re-entries are stopped out (either by the 30 pips hard stop or by the trailing stop), will you enter again during the same day if there are additional opportunities?

Thanks.
1. I add or subtract 30pips from my entry.
2. Yes. see.....this on happened just now...



NOTE: all the values i show on my charts are the actual entry price (the price my broker opens the trade).
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  • #17
  • Apr 19, 2010 5:28am Apr 19, 2010 5:28am
second re-entry......
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  • #18
  • Apr 19, 2010 6:48am Apr 19, 2010 6:48am
quote=hefhem911;3649944]second re-entry......[/quote]

Thanks for sharing.

Quick question, have you tried other combinations of MAs?
Time flies like an arrow; fruit flies like a banana.
  • #19
  • Apr 19, 2010 7:01am Apr 19, 2010 7:01am
Thank you for initiating this thread.
I think i will follow this thread and see how it goes, keep up the good work and thanks for sharing way of your trading.
  • #20
  • Apr 19, 2010 9:12am Apr 19, 2010 9:12am
Hi,

Sorry but i was looking for SMA indicator but cannot find it anywhere, is it possible if you can redirect me where to find this indicator?
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