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Standard Deviation Scalping Method

  • #1
  • First Post: Edited 2:27pm Aug 18, 2009 9:21am | Edited 2:27pm
Hi,

I found a Scalping technique called "5-min Standard Deviation Scalp" (pattern #5 in the document enclosed). I would like to know if anybody has tried this technique.

Briefly, on a 5 min chart, you apply a 10 bar moving average and bands 1 std dev on each side. I am using Bollinger Band (10,1).

When the trend is up (slope of the bands), wait for price to dip inside the lower band and then enter long. Exit when price reaches the other band.

When the trend is down, wait for the price to touch the upper band and then enter short. Exit when price reaches the other band.

To make sure the direction of the trend is right when price touches the bands, I use 10EMA close and 10EMA open. If 10EMA close is over 10EMA open, the trend is up when price crosses the lower band. Reverse for down trend.

Sometimes price doesn't reach the other band, but crosses the middle line of the BB. The middle line can also become the exit signal. There are also false signals (fewer than good ones) and I'm not sure about the stop loss. I would think 1XATR can be a good guess since it's all based on volatility.

On the picture, I circled the entry signals. Sometimes price reaches the other band, but sometimes it doesn't, but most of the times it crosses the middle line of the BB.

Comments would be highly appreciated. If you can watch 3 or 4 low spread pairs, the result should be interesting at the end of the day.

Thanks.

Attached Image (click to enlarge)
Click to Enlarge Name: 264ovhl.gif Size: 44 KB
Attached File(s)
File Type: pdf Scalp Trading Methods.PDF   135 KB | 5,054 downloads
  • #2
  • Dec 30, 2010 5:02am Dec 30, 2010 5:02am
I dont see what that PDF has to do with the picture you posted, they seem unrelated. What settings do you use for that Bolly band?
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  • #3
  • Dec 30, 2010 8:36am Dec 30, 2010 8:36am
pattern #5

Setup: On 5-minute bar chart, impose a 10-bar moving
average. From this moving average, expand an upper
and lower band exactly 1 standard deviation from it.

Entry: In an up trend, we are looking only to buy the dip that
penetrates the LOWER band, provided the slope of the
bands are still up.
In downtrends, we look to sell the rally that penetrates
the UPPER band, provided the bands are sloping
downwards.

Profit Exit: Close out for profit on a 2-point gain or it the price
touches the other band,whichever is sooner.

Stop Loss: Take a 1.25-point stop loss or exit at market if the slope
of the bands changes after entry.


------

gann swing

.
  • #4
  • Dec 30, 2010 9:13am Dec 30, 2010 9:13am
Quoting errich fx
pattern #5

Setup: On 5-minute bar chart, impose a 10-bar moving
average. From this moving average, expand an upper
and lower band exactly 1 standard deviation from it.

Entry: In an up trend, we are looking only to buy the dip that
penetrates the LOWER band, provided the slope of the
bands are still up.
In downtrends, we look to sell the rally that penetrates
the UPPER band, provided the bands are sloping
downwards.

Profit Exit: Close out for profit on a 2-point gain or it the price
touches the other band,whichever is sooner.

Stop...
Ok, so how do i get the standard deviation from the MA in the price window?

A similar thing could be to try envelopes, close, 0.1% deviations, m1, e/u
Might wantput another at 0.16% and 0.22%, take volume and S/R into account maybe.
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  • #5
  • Dec 30, 2010 10:55am Dec 30, 2010 10:55am
Sounds codable, has anyone created an EA for this?
  • #6
  • Dec 30, 2010 12:32pm Dec 30, 2010 12:32pm
Quoting chamane
Hi,

I found a Scalping technique called "5-min Standard Deviation Scalp" (pattern #5 in the document enclosed). I would like to know if anybody has tried this technique.

Briefly, on a 5 min chart, you apply a 10 bar moving average and bands 1 std dev on each side. I am using Bollinger Band (10,1).

When the trend is up (slope of the bands), wait for price to dip inside the lower band and then enter long. Exit when price reaches the other band.

When the trend is down, wait for the price to touch the upper band and then enter short. Exit...

Please attach your template.
  • #7
  • Edited 4:17pm Dec 30, 2010 3:30pm | Edited 4:17pm
Ok never mind i get it

Well from what i can see this doesnt occur very often since the MAs are so fast, if the trend reverses they often go flat or near flat before penetration in oppsite direction of Bands. But it seems to have something to it.

So this is how i made it

Gray MAs are just S/R

I think SL should be about 15 and TP about 10
Attached Image (click to enlarge)
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File Type: tpl bdm5.tpl   802 KB | 1,088 downloads
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  • #8
  • Dec 31, 2010 4:20pm Dec 31, 2010 4:20pm
Quoting errich fx
pattern #5

Only tested with EURUSD.. I looked at USDCAD.. needs different settings.
Again, not great results on backtest, but it is a start..

Setup: On 5-minute bar chart, impose a 10-bar moving
average. From this moving average, expand an upper
and lower band exactly 1 standard deviation from it.

Entry: In an up trend, we are looking only to buy the dip that
penetrates the LOWER band, provided the slope of the
bands are still up.
In downtrends, we look to sell the rally that penetrates
the UPPER band, provided the bands are sloping
downwards.

Profit...
Ok.. I have a number of the features in an EA that can be tested. You can change the BB period and the SD value. Using such a low SL and TP value is hard to code, especially with the criminals watching LOL.

Take a look, I also used a setup as a touch of the lower (upper) band and the trigger when it crosses back over. The theory is that it has momentum when it comes back.

Also I used a sum of the slopes of the upper, middle and lower BB for the trend determination. I think that is a poor way to do it, so I will be coding a change.. likely an RSI or StochRSI.

Best!

Tim
Attached File(s)
File Type: mq4 fiveMinuteStandardScalp.mq4   6 KB | 1,327 downloads
  • #9
  • Dec 31, 2010 4:55pm Dec 31, 2010 4:55pm
Quoting t1minator
Ok.. I have a number of the features in an EA that can be tested. You can change the BB period and the SD value. Using such a low SL and TP value is hard to code, especially with the criminals watching LOL.

Take a look, I also used a setup as a touch of the lower (upper) band and the trigger when it crosses back over. The theory is that it has momentum when it comes back.

Also I used a sum of the slopes of the upper, middle and lower BB for the trend determination. I think that is a poor way to do it, so I will be coding a change.. likely an...
Thanks a lot! I'll be backtesting it for sure. You could use an EMA cross for trend determination. If you use Bollinger (10,1), then use 10EMAclose/11EMAopen crossover.
  • #10
  • Dec 31, 2010 6:21pm Dec 31, 2010 6:21pm
Standard deviation bands and Bollinger Bands aren't the same.
You are in a maze of twisty little passages, all alike.
  • #11
  • Dec 31, 2010 6:44pm Dec 31, 2010 6:44pm
Quoting stevegee58
Standard deviation bands and Bollinger Bands aren't the same.
Hi Steve

I have just completed a search on FF and couldn't find the SDB indi...any ideas whee it may be down loadable?

Thanks
What you do is a reflection of you....what I do is a reflection of me.
  • #12
  • Edited 8:02pm Dec 31, 2010 6:58pm | Edited 8:02pm
Quoting stevegee58
Standard deviation bands and Bollinger Bands aren't the same.
emm My understanding was that the bands were xnum standard deviations apart.

What do you suggest to use instead?

I will be making some edits so to view the latest you can look here
http://metatraderscalp.svn.sourcefor...derscalp/root/

to use this there is a very nice tool to use
http://tortoisesvn.tigris.org/
just download and install. You use it from your file browser and see differences, comments, ect... very nice for coders and for users wanting a specific revision.

Cheers, and happy new year!

T
  • #13
  • Dec 31, 2010 8:42pm Dec 31, 2010 8:42pm
I found the iStdev and will incorporate that into the method. These results are with
BbPeroid 10
Bbdev 1
TP 200
SL 100
SlopeMethod 1 // RSI_METHOD

DD: 2.86 on a 10k account

I'll upload this version in case anyone is interested. It will also be available in the location of the previous post with these comments attached.

T
Attached Image(s) (click to enlarge)
Click to Enlarge Name: scalp5min.gif Size: 10 KB
Click to Enlarge Name: scalp5minchart.gif Size: 22 KB
Attached File(s)
File Type: mq4 fiveMinuteStandardScalp.mq4   7 KB | 1,133 downloads
  • #14
  • Feb 8, 2011 3:47pm Feb 8, 2011 3:47pm
Maybe any of you would want to put things to the test and work together

http://www.forexfactory.com/showthre...13#post4382113
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  • #15
  • Jul 10, 2012 4:46am Jul 10, 2012 4:46am
Quoting chamane
Hi,

I found a Scalping technique called "5-min Standard Deviation Scalp" (pattern #5 in the document enclosed). I would like to know if anybody has tried this technique.

Briefly, on a 5 min chart, you apply a 10 bar moving average and bands 1 std dev on each side. I am using Bollinger Band (10,1).

When the trend is up (slope of the bands), wait for price to dip inside the lower band and then enter long. Exit when price reaches the other band.

When the trend is down, wait for the price to touch the upper band and then enter short....


Hello, where did you get this ATR indicator on the picture of the first post ? Thanks
  • #16
  • Jul 10, 2012 4:54am Jul 10, 2012 4:54am
Quoting airquest
Hello, where did you get this ATR indicator on the picture of the first post ? Thanks
Here's one.
Attached File(s)
File Type: mq4 ATR in Pips.mq4   3 KB | 990 downloads
  • #17
  • Last Post: Jul 10, 2012 5:35am Jul 10, 2012 5:35am
Quoting Hugh Briss
Here's one.
Thanks, but I was talking about the ATR bars indicator on the bottom of the chart (separate window).
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