1 minute momentum scalping

We have some news coming out at 8:30 but the big boys are waiting for the FOMC statement and the Federal Funds Rate.

Wow I got my charts up and ready by 8:02, just in time to see my setup pass me by.

The setup in that previous post was the only pretty entry so far.

Maybe we will range until the FOMC and FFR at 2:30.

But the momentum earlier in the day has this consolidation looking like price is just taking a breather.

I'll have to make a decision soon if I think this is a range. We have to visit my girl friend's parents today and we're leaving in a couple hours.

I'm beginning to think that maybe I should have my shit together well before the open to try to hop on the order flow that starts at NY open (or just before).

Sorry for the lack of videos, I have been juggling too many things while trading to bother. I have been testing out different tweaks to this strategy, and they make such a huge difference.

I've been learning the importance of understanding the market climate, using the appropriate money management and entry tactics, adding to a winning position, and multiple time frame analysis.

The part that I'm at now is making it a simple process.

I'm working on a model that allows me to quickly gauge the climate, and choose a set of pre-defined rules for that particular climate, in a check list format.

When I came up with the hidden retrace filter to replace the length-of-the-impulse filter, that was before I started looking to the 5M for trend filter. The hidden retrace was supposed to be a filter, but I think looking to the 5M (and even 30M and up) could be more powerful, especially if I want to add to winners.

I've also observed that when I'm aligned with the momentum, most times I got stopped price would have continued. With a bigger stop.

Possible new rules:

 

1. 5M and 30M show strong momentum. This is a must, there must be a significant distance between the 5 and 12 EMAs on both time frames.
2. Use the same trigger setup I've been using, except now we're back to the 1M. Only enter in the direction of the larger trend, and use a 15 SL. Make each of these relatively small because there will be lots of them.
3. At the next RN, depending on the average daily range, take profit or move stop to break even.

The most important thing is the MTF momentum agreement. The more (agreement) and the steeper the better.

Hi, do you only use this system on EUR/USD, did you try GBP/USD?

Hey friend,

The 2 pip spread really makes me uninterested in cable when I'm hunting 5 pips. I do use limit orders but I would still get hit on my exit.

But my proposed new rules with multiple smaller positions with larger stops may really fit well with gbpusd.

Steve mentioned the 50 sma on the 5 minute.

Here is an example from London today.

It seems to me to be an exceptional idea to look to the first few rushes of momentum as price leaves the 50sma on the 5 minute, and to be more cautious as we get further away.

edit:

Notice how price will be trending down making lower lows and lower highs. There are probably lots of bear stops above each high. When price fails to make a new low, the bears get uncomfortable, and when price breaks the most recent swing high, their stops are taken out, and hopefully price will return to the 50sma, ready for fresh downward momentum.

Here is a small, experimental position I took a little while ago.

The US trade balance was surprisingly negative, so I'm hesitant to short eurusd this morning.

The momentum is down for the day so I took a small position based on a 123 breakout aka BPC (break, pullback, continuation).

The break was of a huge RN 1.3000 and I took a small position. Price rocketed to the next RN (1.2950) and bounced pretty hard. My stop is at break even.

I think that this may be a decent swing trading approach. What if I tried accumulating a position using the breaks of RNs and my 1m resumtion trigger? It doesn't have to be a swing trading position, I could simply look at the average range for the NY session. I could use relatively loose stops because of the small size of each position and at 1:1 I could move my stop to break even and possibly take some profit.

If you did this all the time wouldn't you be bound to catch some monstrous moves? The next step for an idea like this is trying to find a balance between taking partial profits (to cover inevitable losses) and letting the position run.

Price broke the next RN with so much momentum that it didn't form a nice BPC.

In this case, as an experiment I had a limit order waiting at the 8ema.

The surprisingly negative trade balance smashed the equity markets this morning increasing the demand for USD pushing eurusd down.

Crude oil inventories comes out in one minute.

Wow 130 pip floating profit and zero stress.

Smaller position sizing, bigger stops, price action, S/R, news, sentiment, and intermarket analysis seems to be working for today.


edit:

Up 150 pips at the moment. I've moved my stops to break even each time a RN gets broken. Today I think tons of eurusd bulls got stopped out.

From my swing trading, I've learned that being willing to give back profits (not locking in pips by moving your stop past break even) can give you really nice moves, but at the same time you may end up with nothing. It's a trade off between having your stop out of the way and knowing you have profit.

Congrats on bagging some big pips dude. Great work but don't lets think it will always be that easy! That size of the move today is rare, that's not to say it won't happen again tommorow though who knows. When a trend like that is underway all you gotta do is get on the bus! Personally I'm still demo trading and need to do a bit of work on keeping focus so am still to get on a big run like that. Taking the dog out didn't help today for sure. Was a nice walk though.

The bounces off the 50sma on 5M today were lovely just shows what a great tool it is. Price will always return to the 5M 50 within a sensible timeframe - not neccessarily to bounce, often to ride it or shoot right through. Safe to say as you observed today, price breaking away from the 50 then having a little pullback is a very strong sign of a continuation of that break. I haven't really thought about RN's as much as is sensible before. Do you have an indi that plots the round numbers or plot them manually or neither?

As regards the idea of taking positions on every RN break you would only get away with that i think in a strong trend unless you were prepared to have really big SL's and followed a strong higher TF trend. You never know when a trend will turn so could be dangerous unless watched v carefully. If you can get each position to BE you could ofcourse pile on more positions and risk will be effectively zero and possible rewards in a big move quite big. mmmm

Hey steve thank's bud.

Lol of course it won't be like this every day, and by no means do I intend on entering every RN, just those supported by fundamentals and crowd psychology/sentiment. After those are in place then I'll look to the technicals.

My bread and butter ( the trading method I use so I can afford to "pay for my learning experience" by losing money tweaking this method ) is in swing trading and if I could somehow combine these new sentiment/momentum triggers, I could enter longer term trends with like you said practically 0 risk.

I risked maybe 35 pips today and at the moment I'm up 247 pips. Swing trading has taught me to be willing to give back my (swing position) profits. All of these pips may be wiped out for break even, eventually I'll catch a long term trend that will more than cover the occasional loss because of the tiny risk per trade. Today was a very lucky day and there were lots of bull stops hit, and I'm more than willing to end up with 0 pips for the chance of catching a longer trend. Also with entering on momentum on NY news I can scale into a position to perhaps have part of my position still on. The biggest thing that helped me become profitable was when I finally found a good trend I added and added, getting SL to BE asap.

And the 50sma is definitely an excellent ally. When the trade balance came out today, we were sitting right at the 5m 50sma as some railroad tracks appeared and never looked back.

Walking a dog seems like a really good way to get your mind off the market after you have taken a position. That's one of my strong suites (distracting myself from a longer term position), but walking a dog is one of those things that I can't do yet unfortunately.

I'm waiting to get my degree then I'm moving immediately to Tempe for 10 months before I get placed in an office somewhere, and I don't have it in me to put a poor dog through that. But for sure as soon as I have settled down a bit I will be walking my dog day and night trying not to check my positions.

Man I am going on and on.

From investopedia.com. Click here for the link.

What Does International Fisher Effect - IFE Mean?
An economic theory that states that an expected change in the current exchange rate between any two currencies is approximately equivalent to the difference between the two countries' nominal interest rates for that time.

I remember when we covered this in my international banking class, at the time I just studied it for the exam and flushed it out of my brain.

I think it's interesting that the Federal Reserve's interest rate is .25% and the ECB's is 1%. The question is are these nominal or real interest rates? The figures come from here.

lol, relieved to hear u not going for every RN break, I defo read you wrong. Would you say there a lot of work involved in this 'holistic' approach compared to say pure chart scalpers many of whom ignore fundamentals? Is there a danger of information overload? If a chart is saying it's going down will you follow that or stay out if news and/or sentiment would suggest price should be going up?

Often with complicated charts - which you clearly don't have - you can get signals overload, some of which conflict making taking positions stressful and a confusing experience. If you add news to that picture it's chaos. Are you staying away from indis on purpose to keep charts clear?

I guess if winning in this game is all about taking the best setups if you can combine great chart setups with supportive news background the odds are in your favour. Tempe sounds cool. I got a slightly lower pass mark on my degree than I should have by getting distracted in my last year at uni so a word of warning - don't let this market study time effect your academic study time! The markets will always be here.

lol to this article from bbc buisness news, covers just about all of it.

http://www.bbc.co.uk/news/business-10928909

Up 307 pips this morning.

I was hoping for some negative unemployment data, and am pleased to see that I got my wish. Let's see what the equity and commodity markets do.

Right now oil is down, and gold and Tbills are up.

I would like to see some definitive breaks of RNs today with MTF momentum agreement And I'll be looking to add a couple small positions this morning.

I think if I were to try to be a purely technical scalper and ignore the fundamentals (the cats with the cash to truly move the market aren't concerned with micro technicals) I would want a system that has a strong edge that I have proven to myself through manual back testing and forward testing.

That just seems like too much work to me, because why not learn to put the wind at your back and ride in the wake of the fat cats.

About the market effecting study time you are spot on my friend. Wireless internet in all my classrooms hallways and even outside make it way too hard to study and way too easy to monitor my positions.

Certain classes I have to force myself to keep my laptop closed and my grades have definitely taken a hit that is for sure! But the classes that are associated with my future career (financial services) get my complete attention and I still get good marks in there.

Oh about indicators, I think they have a lot of potential for when the markets are really dead. In the range journal I started I think we can make progress there fine tuning the indicators on a small scale with MTF analysis.

For momentum trading with sentiment, I think indicators will be too lagging. The only one that I would use here is RSI (20) because it helps me quickly identify turning points on smaller time frames when they are turning to join the direction of the more prevalent trend on the higher time frames.

For example I want as many higher time frames as possible to agree with the momentum I'm trying to ride, so ideally the longer term ones (maybe 3H 1H) will show a strong down trend, but the 30 is still drifting up, I can use common sense backed up by my EMAs and RSI turning below 50 to verify that the small TFs are starting to agree with the overall momentum. This is usually when the really fast moves take place, and ideally when we're entering on breaks of RNs we want the news and current orderflow to be at our backs.

When unemployment came out we got a quick down move that punched through RN 1.2800 and came back to trade above the RN.

Negative news for the USD could make traders bearish on USD, but the equity markets hadn't opened when the news came out so a selloff in equities wasn't there to complete the BPC formation.

Right now it seems as though we are waiting for the equity markets to open up and panic before we can get a dramatic punch through this level. It will have to be fierce though because it looks like there are buyers down at 1.2780-1.2785. Hopefully if we get a BPC down there we can hit some bull stops on the way down.

http://www.nobrainertrades.com/2010/...rives-car.html

There's a link on the front page of FF but this is the legend BRV with some words of wisdom.