I have been trading higher lows and lower highs for some time based on this thread http://www.forexfactory.com/showthread.php?t=108544
A classic trade is todays, the 1 hr chart has a positive close. So we are looking to trade higher lows on 5 min following subsequent positive closes on 15 min. Including the 15 min is a filter as it is possible to have a 5 min higher low where the last 15 min candle is a negative close. These are the 3 time frames I use.
The 15 min and 5 min chart shows red lines where the 1hr closes. There will be trades where the close of a 1hr candle will be a trade as the 15 min and 5 min will have the same positive closes.
There will also be trades like today where there is an immediate pullback after the 1hr closes.
Charts shown - 1hr with 8 lwma (gold) on close. The 15 min has 32 lwma and 5 min a 96 lwma for the hourly equivalents. I typically use a cross of 5 min 8 lwma (blue) as a nice visual confirmation of a higher low or lower high.
Basics required:
A classic trade is todays, the 1 hr chart has a positive close. So we are looking to trade higher lows on 5 min following subsequent positive closes on 15 min. Including the 15 min is a filter as it is possible to have a 5 min higher low where the last 15 min candle is a negative close. These are the 3 time frames I use.
The 15 min and 5 min chart shows red lines where the 1hr closes. There will be trades where the close of a 1hr candle will be a trade as the 15 min and 5 min will have the same positive closes.
There will also be trades like today where there is an immediate pullback after the 1hr closes.
Charts shown - 1hr with 8 lwma (gold) on close. The 15 min has 32 lwma and 5 min a 96 lwma for the hourly equivalents. I typically use a cross of 5 min 8 lwma (blue) as a nice visual confirmation of a higher low or lower high.
Basics required:
- Using the standard mt4 times a dashboard showing positive and negative closes for each time frame. Options to switch off specific times as some may wish to scalp more than others. A positive close being a close in upper half of candle and a lower close in the bottom half.
- Filter, option to buy above 1hr 8 lwma (set on close) and sell below the 1hr 8 lwma (set on close).
- Filter, option that 5 min chart must cross from below and close above an 8 lwma for buys. For sells 5 min must cross from above and close below 8 lwma.
- Once set up I do manual entries where price moves 1 pip above/below the extreme of 5 min set up candle. If this is to be used an option to take trade on this basis on lowest time frame enabled for those wishing to use different time frames.
- I use a 20 pip max deviation for manual entries on fxpro a 5 digit broker eg 1.52500.
- Stops I use +- 15 pips
- Take profits. If code writers have good options for this fine. Would suggest perhaps a move to break even at +20 (have this as variable option). After that perhaps we could discuss.
- Option to confirm manually ie to use as a signal only.
- Option to have alerts, charts, audible and perhaps email?
I get decent trades like this virtually on a daily basis mainly from London morning session. Worth developing further.