Simple Scalping Idea

Following on from Geoff's excellant thread http://www.forexfactory.com/showthread.php?t=231650 this gave me an idea for a quick scalp trade. I have noticed that many of the threads/EA's on FF normally suggest avoiding times when there is signifiacant news. I couldn't agree more however what sometimes gets missed is that you may open a position when there is no news however if that position is held open for sometime then your position is at risk to all sorts of events/news whilst it is still open. Therefore I have been looking for something that aims to take a couple of pips at a time perhaps 2 or 3 times a day on each currency. The compounding effect of this should result in significant profits over time.

Fearing being shot down in flames I would like to suggest the following which I have noticed when using the Geoff's EA.

Once the price closes on 1hr chart having crossed the SMA (setting = 10) there seems to be an opportunity to grab a couple of pips at least. I am thinking only 2 or 3 pips (20 or 30 for 5 digit), although you could close half at this amount and see how the rest plays out. It would appear that this cross over could happen 2 or 3 times a day. If we then combine this with Steve Hopwood's approach to multi pair trading EA's then this could add up to a fairly decent amount of pips each day. Even if we made 50 to 100 pips a week the compound effect of this over time would lead to significant profits. By only looking for a couple of pips at a time it hopefully means we aren't in the market for too long and therefore do not get exposed to sudden news events or movements against our position. I am useless at coding but have looked back over the charts and this does look like it could work. NOt sure about the SL although I have tried a couple of trades with a 15 pip SL not that it was needed.

Geoff, having floated this idea to you, I would appreciate if you could look at coding something when you have a moment. My thoughts at the moment with regards to inputs that may be needed would be

 

1. Lot size
2. currencies being traded
3. max spread or specific trading times to avoid high spreads for instance at night on GU
4. TP in pips
5. SL in pips
6. Partial Close
7. BE
8. Jumping stop

These last three in my manual testing I have been using Steve's Multi Purpose Trade Management EA and so folks could use this instead as it is an incredibly powerful piece of kit.

Another option would be to have a minimum distance between the open and close (or maybe high and low) of the candle which crossed the SMA. I mention this as some of the charts I have looked at where the previous candle was very small may result in a loss. I am looking for a reasonably big change in price to suggest that the crossover of SMA has some momentum.

I appreciate anyone's thoughts on this.

I have attached a screenshot of the last three days trading on GU. This represented, up to lunchtime in the UK, nine possible entry points, with another two that closed on the SMA that you could have used. Even if we were only looking to scalp 2 pips at a time that would be 18 pips. I have also attached another curreny pair (using two different currencies)EJ to show another possible 6 entry points. If we are looking to get 100 pips a week that only requires 20 per day across all the curency pairs this should be achievable.

I'm willing to put an EA together to test the strategy, maybe with just one trade at a time till we see how it works!

IMHO I think it will need to be on a volatile pair during the most volatile time of the day, London & 1st half of NY sessions!

I'll be back!

Thanks Geoff

hey paul,

Just like to voice my support for this thread and i hope it can take off because it looks very promising!

Hi Paul

Here is an EA for you to play with, there is TP & SL which represent the value after the spread is taken out and a min_candle setting which is the minimum length of the previous candle.

I place the order when the price goes through the SMA, when I waited for the close it was much too late.

The SMA is also adjustable (its called fast_ema, but it means SMA).

Regards
Geoff

Thanks Geoff, I didn't expect something so quick. I have set things up and will let you know.

Paul

WOW.. Geoff do you ever Sleep? Always working on some new EA... I will check this one out! Will post back!

Oh yes I sleep like log!

I have attached some new files, this version waits for a close before placing the trade.

It is too late on the H1 chart but it looks better on M15 or M5, may even be worth trying on M1.

Geoff

I loaded up the first version at work and before I left it had taken its first trade and ended in profit. HOwever looking at the charts I could see plenty of occasions were just simply crossing the SMA would not have led to a successful trade.

Having now got home I have loaded up V2. I'm interested to know why its too late on the 1 hr chart. Like I said before I am clueless when it comes to coding an EA.

I am going to run this on 15m and see how it goes.

Thanks again

Paul

Paul
I tried waiting for the candle to close earlier in the H1 chart but when I ran it the trade was so late most of the time that the price action had reversed.

Anyway the new files do wait for a close so they are back to your original concept, just needs thoroughly testing.

Regards
Geoff

Thanks Geoff for so quick.
As someone else already asked. did you ever sleep..

Keep it up

Velli

Two trades on the 15min chart last night although looking at the chart I think the EA should have fired more. On the 1 hr chart there were no trades despite there being a couple of opportunities. Geoff, I know you were concerned that the trades happened too late on 1 hr but for there to have been no trade at all (late or not) seems odd. NOt sure if anyone else is testing this but I would appreciate any feedback

Paul

I turned the minimum candle size off to get this chart.

I think this is why there were fewer trades last night.

This is the H1 result with candle size turned off.

I think there are too many losing trades, what do you think?

Certainly with the min candle turned off you got a lot more trades, although some losses. I have adjusted my settings still keeping the mon candle at 15 but looking for 3 pips tp and sl of 8. I will keep you posted.

Still not sure why my 1 hr didn't trade as the min candle shouldn't have mattered on some of the potential trades for instance the 02:00 candle

Hi Paul

This is something I am interested in.

I have marked the different session start times, Tokyo, London and NY.

It will be interesting to see what happens this afternoon when NY opens, will they buy at a discount?

Geoff

Hi Guys,
I did a strategy testing with the axisodl on GU 15 min chart. The results are not encouraging it has gone to -ve and around 50% down.

Velli

My original idea was to use 1hr timeframe but I haven't had any trades on this timeframe with EA. Geoff suggested the 15 min chart to see if we could get more trades

Hi Paul
Based on Geoff's suggestion i tried both 15minutes and 5 minutes the results are very bad..
Most probably we need to increase the stop loss to be bit high around 50. Let me test with this and see how it performs...

Velli