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How to scalp small pips?

  • #1
  • First Post: Nov 4, 2010 4:02pm Nov 4, 2010 4:02pm
Hi. Sorry for my english)

i want to know how traders scalp small timeframes(1-5min)?
what tools they use?

indicators? its lagging.
candlesticks? it doesnt work at 5 min candles. 5 min candle can be "hammer" at one broker and can be "doji" at other broker.
levels? i mean pivots, fibs, murrey. So may be it works.


I want to learn scalp. All i need is 2%-4% a day and thats it.
for example i have risk:reward 1:1, so i need 2 profit trades to make 4% a day.

it doesnt matter how many pips you need. You risk 2% and you get 2%. it can be 5, 10, 20 pips.

What kind of strategies scalpers use?

I tried Trend Following breakouts of swing points. its too many breakouts( Price can breakout some pips then revers and hit my stop loss.

welcome to disscussion
  • #2
  • Nov 4, 2010 4:27pm Nov 4, 2010 4:27pm
Quoting wskeal
All i need is 2%-4% a day and thats it.
As long as that's all you need. I mean to make like $1.8 million in a year from 1k. I would like to know as well let me know when you figure it out.
  • #3
  • Nov 4, 2010 4:30pm Nov 4, 2010 4:30pm
Quoting frankkn
As long as that's all you need. I mean to make like $1.8 million in a year from 1k. I would like to know as well let me know when you figure it out.
some days i will lose, some days i will breakeven.

its will be good if two days from five is BE and other 3 is profitable
  • #4
  • Nov 4, 2010 5:39pm Nov 4, 2010 5:39pm
Hi
thanks for your thread,
I don't know whether this is related or not but forgive me in advance if it's not related to the thread.
I have an idea for developing a scalping method, I'm looking for someone that can help me with it.
I work with Alpari and they have 18pips trailing stop(alpari is a 5digit broker so it's less than 2pips), so I think of a scalping methods with so many signals that goes in profit just by 1.8 pips other than the spread which is 1.2 to 1.5 pips, once you're in 1.8 profit you have no risk of losing, if it goes further you have your profit and if it goes back your trade is closed with no losses, if the system gives an initial 3 pips (1.8 profit and 1.2 spread) we have no risk continuing, so we need just 3 pips at start any other false signals other than these 3pips doesn't matter, so does anyone have any idea?
I'm thinking of couple of indicators but I'm not sure about the settings, I would be happy to hear from you.
  • #5
  • Nov 4, 2010 5:53pm Nov 4, 2010 5:53pm
Quoting exking
Hi
thanks for your thread,
I don't know whether this is related or not but forgive me in advance if it's not related to the thread.
I have an idea for developing a scalping method, I'm looking for someone that can help me with it.
I work with Alpari and they have 18pips trailing stop(alpari is a 5digit...
you mean EA?

i just wanted people to shared some scalping methods. Not the system but some strategies or ideas.

what about spread there are brokers with less than 1 pip EU spead. i mean ECN.

but first i need method)
  • #6
  • Nov 4, 2010 6:12pm Nov 4, 2010 6:12pm
scalping is all about developing a feel for a market and the only way to do that is by watching the market trade. Don't read any books on TA they are not relevant to trading on this timescale - although some of the market profile information is useful.

Pick a single liquid pair, EUR is the obvious choice and open a 1 minute chart and mark on it the important swing highs and lows from an hourly chart. Note the times of day when the economic news release are and also the times when the major stock markets open.

Now sit and watch the market trade and take notes on what you see. Try to predict where price will go next. Is it just going sideways in a range or is it trending. If its trending where might the trend end?

There is no secret to scalping you just have to do the screen time and not get caught up in indicators/patterns/renko charts - basically all the other nonesense.
  • #7
  • Nov 4, 2010 6:13pm Nov 4, 2010 6:13pm
Quoting wskeal
you mean EA?

i just wanted people to shared some scalping methods. Not the system but some strategies or ideas.

what about spread there are brokers with less than 1 pip EU spead. i mean ECN.

but first i need method)
Hi wskeal
I didn't mean an EA
I'm looking for a strategy but I said Alpari let you have a 1.8 trailing stop, it means you can have a BE after 3 pips including the spread,
I meant this can be helpful in making a system, it's not important if the system gives so many false signals if we have just a 3pips initial move,
let me know if you need more explanations
  • #8
  • Nov 4, 2010 6:15pm Nov 4, 2010 6:15pm
I use a bunch of indicators (and all the other technical stuff) and a lot of experience aswell. That's it.
Timeframes that I do not like: M5, M30, H1 ..
  • #9
  • Nov 4, 2010 6:18pm Nov 4, 2010 6:18pm
Quoting m.m.m.
I use a bunch of indicators (and all the other technical stuff) and a lot of experience aswell. That's it.
Timeframes that I do not like: M5, M30, H1 ..
Hi m.m.m.
Ok here we are to hear from people like you if you don't mind to share your system
  • #10
  • Nov 4, 2010 6:20pm Nov 4, 2010 6:20pm
Scalping isn't the exact word you should use here. Scalping has a lot to do with reading the market depth and spotting short term weaknesses in supply or demand.

But I get what you're saying. You want a high frequency trading system that will give you dozens of trades a day adding up to small profits which will allow you to trade more and more and make millions.

I'd suggest that you find a method you like and stick to it. Read on the forums here and find a method that you like and practice it on smaller time frames. The key thing though with these time frames that you need to know about is the spread. Your trends will be in the 5 - 25 pip range and will last about 5 to 20 minutes. With this high of a frequency, the trades pile up, so you'll need a broker with low commission. I use MB Trading right now and their commission is great for me.

As to a system, I'd suggest something like this:

1. Find an indicator you understand and think looks pretty.
2. Find its weaknesses.
3. Trade around its weaknesses

For example, the MACD is a great indicator, but it's lagging. To overcome this lagging effect, why not wait until a trend is established and buy/short on a pullback?
  • #11
  • Nov 4, 2010 6:26pm Nov 4, 2010 6:26pm
Quoting Moody
Scalping isn't the exact word you should use here....
Hi Moody, thanks for sharing
So the question is how do we get the pull back signal?
would you explain more
  • #12
  • Nov 4, 2010 6:28pm Nov 4, 2010 6:28pm
Nothing can substitute for actual screen time. Spend a few thousand hours watching one pair, you may not master it, but you'll learn enough about that pair to successfully trade it for a living.
  • #13
  • Nov 4, 2010 6:29pm Nov 4, 2010 6:29pm
Quoting Moody
... why not wait until a trend is established and buy/short on a pullback?
Buying the first pullback after a breakout is a common way to trade.

Pattern failures are normally good for scalps too, as you get lots of trapped traders who are forced to get out.
  • #14
  • Nov 4, 2010 6:40pm Nov 4, 2010 6:40pm
Well, I'm not exactly here to promote or teach any signal...just think it through. If price is trending upwards, some of the best times to enter are pullbacks. Here's an example of a good, tried, and true strategy. Let me grab some charts real quick...

Basically what I'm saying is that it's really easy to create a trading system. For example, using the MACD indicator and only purchasing on pullbacks, I have eliminated many false signals and mitigated the risk of using an indicator which only wins 30% of the time.

Attached Image (click to enlarge)
Click to Enlarge Name: examplemacd.png Size: 16 KB


I don't use this, but I know that it can work if someone were interested in it. But, in the above example, the trading system would be:

1. Wait until a MACD crossover happens.
2. Wait until price begins a trend in the direction of the crossover.
3. Trade when price consolidates or "pulls back"
4. Exit the position when the trend ends (MACD crossover)
5. Wait until another MACD crossover happens.

Obviously this is a very basic system, but if you were to use it consistently, you could earn short, medium, or long term profits. And once again, I'm not promoting or suggesting this system. I'm just saying that it's easy to make a system to trade on any time frame, you just need to find what works for you.
  • #15
  • Nov 4, 2010 6:40pm Nov 4, 2010 6:40pm
Quoting jzw
Buying the first pullback after a breakout is a common way to trade.

Pattern failures are normally good for scalps too, as you get lots of trapped traders who are forced to get out.
Hi jzw, thanks for your answer,
would you please explain more, how do you get the breakout pullback signal? and how do you use that pattern failure thing in detail, thanks in advance
  • #16
  • Nov 4, 2010 6:44pm Nov 4, 2010 6:44pm
Quoting exking
Hi jzw, thanks for your answer,
would you please explain more, how do you get the breakout pullback signal? and how do you use that pattern failure thing in detail, thanks in advance
These aren't things you "get" or purchase or go out and find. They're basic trading knowledge. I think your first education should be a thorough read of some solid textbooks on the matter. I will shamelessly promote this one right here and say it's the best educational trading book I've ever read:

http://www.amazon.com/Technical-Anal...8914236&sr=8-4
  • #17
  • Nov 4, 2010 6:47pm Nov 4, 2010 6:47pm
Quoting Moody
Well, I'm not exactly here to promote or teach any signal...just think it through....
Thank you for the fast and detailed answer, I got what you're saying.
what do you think of couple of MA's and stoch for a high frequency trading system, like I said at this point it doesn't matter if we get some false signal
  • #18
  • Nov 4, 2010 6:52pm Nov 4, 2010 6:52pm
I don't think that's the way of starting out. Listing a bunch of indicators isn't a good idea in my opinion.

I think you should start by deciding what you'll do and then find an indicator or trend line or whatever that meets that description.

For example, "I am going to trade short term trends and capture profits". Now the question is - "How am I going to identify this trend". And that's where I pulled the MACD from.

Rather than saying, "how do these indicators sound", say what you're going to do and then tell yourself why the indicators match up with your plan. Next, write out a trading plan that says exactly what you are going to do.

Example:
1. When the 10 period moving average is above the 21 period moving average, the trend is up.
2. When the stochastic oscillator crosses above the 50 line, I will buy with the trend. I will add another lot if the oscillator crosses above 80 as well.
3. I will exit when the stochastic oscillator falls back below the 50 or the 10 moving average crosses back over the 21.
4. I will do the opposite trade under opposite circumstances.
  • #19
  • Edited 7:25pm Nov 4, 2010 7:11pm | Edited 7:25pm
Quoting Moody
I don't think that's the way of starting out....
Sorry if I'm confusing you, I'm somehow a newbie and I don't have enough experience and knowledge, and also excuse my language.
I want a system for trading on 1min chart eur/usd
I want to catch even 3pips moves
is it possible or reasonable?
I saw many threads here about scalping 1min chart, their goal is to make at least 10pips profit and they're trying to filter more false signals because they're trying to catch a minimum 10pips,
but here I mean it doesn't matter if we get a false signal if we can get an initial 3pips move because with a 2pips trailing stop we can BE, so in this way we can have a system with more signals, am I thinking right or I'm mistaken somewhere? Thank you for helping me
  • #20
  • Nov 4, 2010 7:23pm Nov 4, 2010 7:23pm
Scalping is one of the most difficult trading methods that requires high accuracy,good win rate and a risk reward of 1:1 or better.

You need a lot of experience / market knowledge which allows you to classify different conditions and the ability to strike on the right time.

Day time, volatility, liquidity areas, currency (money) shifting, possible correlations, market depth (bluffing,spoofing,real intentions), order flow and overall net positions for potential stop hunting terms.
You should watch the global fx market, one pair alone can hold back important information.

Trading candles or indicators don’t provide an edge, you will usually be caught in the noise.
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