Nice I am trying this system now, but this will only work with a high leverage right? With my 1:50 and 1000USD I will not make enough money per pip I guess, since I can trade 1 Lot max.
Tried two trades on demo account, both times everything seemed fine but it turned out badly.
Ignored
Hi BobbyJ. I'm learning too. But I will give you my opinion. Even though this is a more mechanical system, we have to add a little bit experience. jmflukeiii (post 24) and Paulus (read posts 30, 38 and 50) said to wait with the entry, until the fast stochastic passes through the 20 or 80 line, changing colour to grey. This would have helped you stay out of the GBPUSD trade.
For the AUDUSD trade: jmflukeiii said in another scalping thread, that he always looks at higher TF's too. So, I think, that minimum the next higher TF has to agree with your entry. See the attached charts. On the 1m chart there are marked 3 possible entries with vertical lines (where your trade failed). At this moment, price has broken above 3 previous swing highs (the line at 1.0262). The 3 SH's ran against this line or small zone (=resistance). So price broke above a resistance line (warning!). Now look at the higher TF, the 5m chart: just before the 3 vertical lines (the possible entries from 1m), there are 2 strong momentum bars and these 2 bars erase the down move from the 8 bars before. Momentum is up at this moment (see also 5m stoch's). If we see that, we stay out.
I never traded the 1m chart before and all is very quick here. I have to quicken my thinking and situation-judging and that requires a certain experience, I think.
4 entries today. 3 winers, 1 loos.
I still learning this system, so thats why my RR is 1:1. SL=TP=1%.
Within few days i am going to incrase RR to win 2-3% per trade.
Most people getting a 4 pip win would think great £40 win !
I think
10k account
5% risk = £500 / 4 pips stop loss = £125 per pip using spread betting account
I win 8 pips which is a 10% return in this case I make 8 x £125 = £1000
Big difference from £40 because my risk reward is linked to my % gain
Think % NOT pips
Ignored
I totally agree with you Paulus, about thinking in terms of %'s and not pips. (Actually I think in terms of units. In your case 1 unit is 5%).
However, there are 2 things about this.
1) If you are targeting 8 pips to return 10%, that is appx 1.25% per pip, which may be above the maximum possible on the account depending on the margin requirement of the broker, (Who do you use?)
2) Beware of slippage unless you have guaranteed SL, which will cost you pips and may not be able to be set 6 pips or less from the market price. At 1.25% per pip, a 40 pip slipped exit could be very damaging to an account and mentally. (Of course, this is all broker dependant, but the past months movement on EURUSD has shown whopping big moves).
