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The Scalpers Dream

  • #1
  • First Post: Oct 20, 2010 4:08am Oct 20, 2010 4:08am
This system was based on this article about stop hunting http://www.investopedia.com/articles...topHunting.asp

I call it a scalpers dream because it's a set it and forget it naked trading system, although it would be more profitable if you check in on it every couple hours or automate it. It will work on any major pair. I tested it LIVE on EUR/USD and made 8 trades so far 1 loss(should have been -35), 1BE(manual trade entered wrong direction should have been a +15), and 6 for +15 pips each for a total of +55 pips for the day. Here is a link to my FXBOOK account http://www.myfxbook.com/members/Jaws...oZxJG05OdXsgYB my overall trading is not that great but look at the trades that were placed from 10/19/10 on. I made over 18% on my day to day balance.

Ok, here is how I set it up. I set up trades with a TP at the big numbers 300 pips above and below the current price and the entry points are 15 pips away from the big number. So if the current price was 1.3850, I would place long orders at 1.3985,1.4085, and 1.4185 and short orders at 1.3815, 1.3715, and 1.3615. I have also determined that a SL at the 50's would leave enough room for the trade to play out and the win ratio is so high that losses will be rare and will not affect the overall profitability of the system. Once it is set up all you have to do is check in to fill in the blanks left from orders that were filled.

I don't use MT4 at the moment but I would love to have an EA for this system if anyone would be nice enough to program and post it.
  • #2
  • Oct 20, 2010 5:39am Oct 20, 2010 5:39am
the round numbers can go either way. the "big players" can set to liquidate or increae postitions at those numbers. it goes both ways

check out the eur/usd @ 1.37000 on the 1h. immediately stop and reverse. it barely even went a pip below that before complete reversal on the next bar.

1.38300 exact same thing. not a pip below and complete reversal.

i think this stategy would be much better after their hand has been shown. i.e. instead of anticipating what they will do at the "00" numbers, wait for that to occur first, it's not like they are going to sell at 1.37000 and buy back at 1.3748 or some random number, say 18 minutes later.

so if it stops and reverses, or if carries through at 1.37000. take the direction it reversed or continued in say after 30 pips of movement to confirm, and then set a take profit say at 50 pips (before next round number).
  • #3
  • Oct 20, 2010 8:06am Oct 20, 2010 8:06am
I'm buying 15 pips before the big number and my exit is at the big number, if your talking about the 3700 last night I got that one. A reversal at the big number is fine because I already have the next big number above set. The only time I'd have a problem is if the reversal happens before the big number, that 3700 for example, if it reversed at 3705 and never hit my tp point then I would have had a losing trade but it went slightly past the big number down to 3696 which is enough to cover any good broker's spread. Here is a screen shot the green dots are my TPs
Attached Image (click to enlarge)
Click to Enlarge Name: shot 1.jpg Size: 84 KB
  • #4
  • Oct 20, 2010 8:35am Oct 20, 2010 8:35am
Quoting jaws810
This system was based on this article about stop hunting http://www.investopedia.com/articles...topHunting.asp

I call it a scalpers dream because it's a set it and forget it naked trading system, although it would be more profitable if you check in on it every couple hours or automate it. It will work on any major pair. I tested it LIVE on EUR/USD and made 8 trades so far 1 loss(should have been -35), 1BE(manual trade entered wrong direction should have been a +15), and 6 for +15 pips each for a total of +55 pips for the day....

can you provide examples with charts ? as the mthod appears unclear.


how long have you been trading this ?
  • #5
  • Oct 20, 2010 8:37am Oct 20, 2010 8:37am
I understand what you're thinking but you're still susceptible to getting whacked by a black swan.

Statistically you're saying that if price went alllllllllllllll the way up/down from some starting point, then it has a high probability of going just a little bit farther to hit your TP. That's fine as long as the other factors have a statistical edge. Otherwise you're just using a big SL and a small TP to give yourself a high probability but a potentially negative expectancy.

You need to backtest this or at least do a statistical study of price action to prove it has an edge. Eyeballing isn't good enough.
You are in a maze of twisty little passages, all alike.
  • #6
  • Edited 10:49am Oct 20, 2010 9:06am | Edited 10:49am
All I'm doing is using what I know about the round numbers, they almost always get hit if the price comes within 15 pips. Here is a link to my trading history, I just started doing it yesterday and only had one bad trade. I started using it about 4am yesterday on the history. I was placing manual trades at the beginning and made mistakes but now i just set it and forget it. This link will show you my actual trades and orders http://www.myfxbook.com/members/Jaws...oZxJG05OdXsgYB

BTW my 3900tp was just hit.
  • #7
  • Oct 20, 2010 9:15am Oct 20, 2010 9:15am
Hi,
on mql4.com there is already an EA for this strategy http://codebase.mql4.com/6982 but the site seem to be offline now.
Maybe you can try it
Hope this helps
  • #8
  • Edited 9:41am Oct 20, 2010 9:17am | Edited 9:41am
Here is what the setup looks like on a 5m chart zoomed out. You'll see my last trade that just closed at 3900 and the boxes above and below are my limit orders i just set 15 pips above or below the big number. An when the price hits 1.3950 I'll place a short order at 1.3915 for when it comes back down.
Attached Image
  • #9
  • Oct 20, 2010 9:36am Oct 20, 2010 9:36am
Quoting gspe
Hi,
on mql4.com there is already an EA for this strategy http://codebase.mql4.com/6982 but the site seem to be offline now.
Maybe you can try it
Hope this helps
I already tried that EA it doesn't work right, well it don't work the way I'm trading, I couldn't figure out what it was doing other than losing money, so I started trading it manually. I attached that EA if anyone wants to try to mod it to work like I'm trading, Basically it would have to set up limit orders every time the price passed the 50's, 1 long position at 1.**85 above the CP and 1 at 1.**15 below the CP with both SL at the 1.**50, and repeat the process the every time the price passed 1.**50. Automatic lot adjustment based on account size would be nice too.
Attached File(s)
File Type: mq4 Stop Hunter.mq4   16 KB | 721 downloads
  • #10
  • Oct 20, 2010 9:47am Oct 20, 2010 9:47am
Quoting jaws810
All I'm doing is using what I know about the round numbers, they almost always get hit if the price comes within 15 pips. Here is a link to my trading history, I just started doing it yesterday and only had one bad trade. I started using it about 4am yesterday on the history. I was placing manual trades at the beginning and made mistakes but now i just set it and forget it. This link will show you my actual trades and orders or you can use the link in my first post and get even more info.***link removed***...
1) You should probably NOT post that link to your account history. It gave away your real name and your account numbers.

2) Just because it's working for you does not mean you won't get whacked. It's called the "survivorship bias", meaning that because your system survived this long it must be "good". You just haven't stressed it with a large, unexpected event yet.

I'm not saying what you're doing is bad, I'm just pointing out that you need to do more due diligence before continuing with real money. You stated in your original post, "I have also determined that a SL at the 50's would leave enough room for the trade to play out and the win ratio is so high that losses will be rare and will not affect the overall profitability of the system." What historical testing have you done to actually back this up? That's all I'm saying.
You are in a maze of twisty little passages, all alike.
  • #11
  • Oct 20, 2010 10:16am Oct 20, 2010 10:16am
Quoting stevegee58
1) You should probably NOT post that link to your account history....
I know it will lose occasionally and that link to my account is only good for today and name and account number won't get you anywhere as far as accessing my account because withdraws could only be made by the same means as the deposit so unless it gives out banking info I'll be fine, but I'll stick to the FXBook links to be safe, and as for live trading that's a test account that could be used even after the account has a margin call, I could trade lots of $10 if I wanted to. I use it so I can see real results because demo is not always the same as live.
  • #12
  • Oct 20, 2010 10:19am Oct 20, 2010 10:19am
What's the harm in showing the account number if it's just for a test purpose.
  • #13
  • Oct 20, 2010 10:34am Oct 20, 2010 10:34am
Those account numbers are for a live account. It's like giving away your credit card number. You should never give out your real name on public internet forums.

You can try to argue that I'm being overly paranoid but I think it's just asking for trouble.
You are in a maze of twisty little passages, all alike.
  • #14
  • Oct 21, 2010 6:24am Oct 21, 2010 6:24am
More info here
http://www.investopedia.com/articles...92649372&close
D.
  • #15
  • Oct 21, 2010 8:09am Oct 21, 2010 8:09am
Quoting jaws810
I already tried that EA it doesn't work right, well it don't work the way I'm trading, I couldn't figure out what it was doing other than losing money, so I started trading it manually. I attached that EA if anyone wants to try to mod it to work like I'm trading, Basically it would have to set up limit orders every time the price passed the 50's, 1 long position at 1.**85 above the CP and 1 at 1.**15 below the CP with both SL at the 1.**50, and repeat the process the every time the price passed 1.**50....
What does CP means? and.. are both SL @ 1.**50 and TP=15 pips?
"Hoe ur pips mate?" fxcarllos
  • #16
  • Oct 21, 2010 1:59pm Oct 21, 2010 1:59pm
Busy with the first sell order @ 1.3915 for TP-1.3900, let's see how it performs
  • #17
  • Oct 21, 2010 9:16pm Oct 21, 2010 9:16pm
Jaws,

Thanks for sharing your trading method.

What is your recommended SL? 35 pips? Are you always placing your stops at the 50 round number positions? Can we effectively use a 15 pip SL in order to achieve a 1:1 risk to reward ratio?

Also, do you set and reset pending trades regardless of the time of day?

Thanks,
BC
  • #18
  • Oct 22, 2010 12:55am Oct 22, 2010 12:55am
My open short did hit TP @ 1.3900. I wouldn't say that a 15 SL will work because my trade were in drawdown more than 20 pips at one stage.
  • #19
  • Oct 22, 2010 1:00am Oct 22, 2010 1:00am
TriMagic,

Thanks for your report...that's helpful. Did you set your SL @ 1.3950, then?

BC
  • #20
  • Oct 22, 2010 1:03am Oct 22, 2010 1:03am
Quoting Bobcat2
TriMagic,

Thanks for your report...that's helpful. Did you set your SL @ 1.3950, then?

BC
Yes I made use of that SL.
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