Hybrid scalping system

Hello fellow traders!

My name is Jan, i am currency trader for solid 5 months and i have been trying to test and learn pretty much anything i could find over past months (like most of you probably). After quick checking different systems, from MAs, EAs, realtime indicators, volumes, all indicators combined in either possible way in mt4, checking out the most popular systems online, i have come down to three systems that are in my view the most reliable and give decent signals that you can hold on as a technical trader.

Bare bone of this system are: Ichimoku, TMS (trading made simple system), Steven Hopwood 10.2 system and PA (old plain candlestick price action). NOTE BEFORE USING THIS SYSTEM YOU DO HAVE TO USE LEARN ALL OF THREE SYSTEMS WRITTEN ABOVE BEFORE STARTING WITH TRADING IT. Simply by typing in google any of keywords should give you pointers straight away.

*I DO NOT CLAIM OWNERSHIP OVER ANY OF ABOVE SYSTEMS, ALL KUDOS GO TO AUTHORS OF SYSTEMS*

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Are you wondering why modifiyng any of those great systems? Well simply becouse from my trading experiance doing changes here and there makes them much more powerful, or with other words combining some of their features and excluding others improved results a lot.

Here are some changes made:
-TMS itself is great system but after using Haiken Ashi candles or any other simplified candlestics used for TMS give much worse perspective over price action and S/R levels. Yes they do create less stress in trading but they also give weaker signals and more stress on entries. Probably the biggest advantage of default japanese candles is that you can get much better and cleaner entries compared to Haiken Ashi candles as HA candles are simplified.

-Steven Hopwood 10.2 system is great, but the peak of it for me was 10.2 slope indicator .I have been using this indicator since i started trading and it is for sure one of best indicators i have seen. Only by using of this indicator you can use it to determine your tp level. The rest indicators of this system were not that useful thats why i excluded them completly.

-Ichimoku is very powerful system, yet while testing it i have figured out two things. First you do not need any other line except KIJUN line. Just dont bare with other lines, it only messes your chart. There are only two valid signals with Ichimoku for this system, one is cross of kijun and PA and second is breakout now this is important -ON BREAKOUT PRICE AND KIJUN HAVE TO BE VERY CLOSE TO USE IT AS VALID SIGNAL, THE CLOSER THEY ARE THE BETTER THE SIGNAL. IF PRICE IS FAR AWAY OF KIJUN ON CLOUD BREAK, SIGNAL IS NOT VALID.
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The main advantage of this system over Ichimoku, TMS or PA used aloane is that you simply get more signals, better confirmations and you get better idea how long should you stay in trade.

The system is meant to be traded on M1 and M5 charts. But any other tf would do as well.


Rules of system:
-For entry try to get at least two decent signals (for example PA and 10.2 slope indicator signal)
-The more signals you have on your side the better the entry

TP:
For tp there are many different ways how you can do it. How i like to do it is either to use certains specific systems signal or use resistance or support for it. What i mean for specific signal is for example you look only for kijun and PA cross as exit signal, or you use 10.2 slope indicator power as guide when to exit trade. I preffer the most 10.2 to exit trade with support of PA.

Sl:
Resistance and support + Ichimoku Kijun crosses are best to use.

Signals to look for with this system:
-Ichimoku breakout
-Ichimoku Kijun and PA cross
-PA (all possible PA patterns - pinbars, morning star etc...)
-Oversold or overbought stocastic (especially look for clean stocastic swings)
-10.2 slope indicator change of bull or bear power.
-10.2 slope indicator increase of bull or bear power.


I am making this thread simply to give something community back as there would be no progress on my side without it.

Note that briliant thing about this system is that it works on any time frame and you dont have to use it for scalping only, it serves just as well on high time frames.

The best currency to trade is without doubt EUR/JPY. It has strong liquidity which is needed when you are trading of 1 minute charts. As second option GBP/USD and EUR/USD are good pairs too, any other pair is less reliable.



Here is example trades that could be taken on 28.1.2013 (picked day randomly) of 1 minute chart.
http://shrani.si/f/30/SZ/2GbsRPgB/ch...stemchart2.png
Green line represents what should be start of trading day on 9:00 GMT. This is ofcourse what suits me best, but the main point here is try to avoid trading asian session as signals in that session are far worse.

#1.Enter long at 122.050 after closing of engulfing bullish candle. Additionally 10.2 slope indicator shows that bulls are still in good control, which is good for longs, stocastic just bumped of 20 level and oversold area, which is good for longs too.TDI indicator has crossed bullish but note that this is very weak cross. TDI crosses are good signals only when crosses happen after bit longer time or so called clean sharp crosses.

#2.Exit long at 122.155. We have very clean TDI bearish cross, stocastic just passing overbought 80 level, which is good for shorts, and 10.2 slope indicator shows that bulls are cooling off.

Enter short at 122.155. All previous signals that were good for exit of long positions are practically good signals to enter short position.

#3.Exit short at 122.100. We have bullish cross over kijun line, bullish clean TDI cross, and stocastic oversold. All good long signals and bad signals to still carry in short.

Enter long at 122.100. All previous signals explain it.

#4.Exit long at 122.163. Stocastic and TDI did not give good signals this time, 10.2 slope bulls are decreasing in power, when reversal of power on 10.2 slope indicator is appearing this is good signal to start looking for exits or entries. PA did formed nice bearish signal, two strong body candles, previous had wick on up side and got rejected by resistance, bearish has more full body which indicates the way south.

#5.Enter long at 122.040. Clean TDI bullish cross, stocastic oversold and passing 20 level. 10.2 slope indicator is against us in this entry, but note that color is not yet strongly red which indicates only slow pressure of bears.

#6.Exit long at 122.100. Bears are starting to press which indicates stronger red color on 10.2 slope indicator. Bearish Ichimoku breakout which indicates that you should be always on guard for bearish breakouts, after kijun was crossed with bearish candle this indicates we should defenetly exit.

Enter short at 122.100. All previous signals indicate strong short entry.

#7.Exit short at 121.750.Pinbar indicates that downtrend might be over. There is still decent pressure of bears and entering against this pressure is always a bit risky. TDI and stocastic both gave no good signals.

Enter long at 121.750. Enter due to possible end of down trend (pinbar).

#8.Exit long at 121.910. Pinbar formed, which aloane is strong signal. Stocastic is additional confirmation while being overbought. TDI is still showing moving upwards but in this case we should ignore it.

#9.Enter short at 121.89. Two body candles with stronger wicks up which confirms rejection from resistance is decent bearish signal. All indicators in this entry are showing no clear picture, which means that this trade should be watched closely for any breakouts.

#10.Exit short at 121.81. Stocastic oversold and just passing 20 level, TDI has decent look of bullish cross even that it later didnt happen as clean. 10.2 shows bears are in charge but the power is yet not strong.

Enter long due to all signals above.

#11.Exit long at 122.02. PA confirms full body candles, bullish candle has wick above which indicates rejection of going higher, and full bear candle shows possible down movement. We have also very clean TDI cross after being long without any cross, stocastic passing over 80 level in nice arch.

Enter short at 122.02. In this case 10.2 indicator is against us, it shows that bulls are still very strong, actually over our short position being opened their power increased, but yet all previous signals are strong enough that it should be valid entry. Again the point of this system is using some of the most reliable indicators - systems together and pick as much as decent signals possible to decide on entry.

#12.Exit short at 121.85. Full engulfed bullish candle after downtrend, good PA signal. Very clean bullish TDI cross, stocastic oversold and going up from 20 level. 10.2 shows bears are still pressing but there is more signals going in side of bullish movement.

Enter long due to signals above.

#13.Exit long at 121.85. This would be breakeven long (not considering spread). Full body bear candles show for down movement, clean bearish TDI cross, stocastic overbought. 10.2 shows increase of bears, practically no reason to stay in scalping long anymore.

Enter short due to reasons above.

#14.Exit short at 121.70. We have clean TDI bullish cross, stocastic going up from oversold, 10.2 slope shows that bears are loosing power, PA shows that bearish candle had strong wick down and there is quite decent full body bullish candle.

Enter long for signals above.

#15.Add to long position. Price got rejected by kijun, PA shows clearly that as both candles spawned wicks down towards kijun, clean TDI cross shows bullish movement, stocastic is going from heavily oversold up.

#16.Exit long at 122.000. Full body bearish candle confirms possiblity for down movement. Stocastic is overbought and 10.2 shows that bull power is weak.


*FOLLOWING THIS SYSTEM FOR EXAMPLE CHART ABOVE 9:00 -12:00 GMT, IT WOULD PRODUCE 168 PIPS (NOT INCLUDING SPREAD) ON M1 TIME FRAME. THIS IS SOLID THREE HOURS OF TRADING FOR A VERY NICE BOUNDLE OF PIPS. *

I have made little less than 50% this week with barely any loosing trade.
This are some example trades of this week:
http://shrani.si/f/H/FB/1ab5hxhD/charthybridtrades.png
I will be posting live trades later on.

I am running the same topic on Babypips forum, i just posted it here too so more people can find it.

Indicators:

If you have any questions regarding entries let me know. I think that posting this system on this forum might be little more appropriate than babypips since there are many TMS and Ichimoku users here.

Hi Jan,

Thanks for the detailed post! I had started with the Steven Hopwood 10.2 System but never really followed through. However, maybe it is time for me to go back and take another look.

I really feel like a hybrid system of uncorrelated signals is a great way to build any trading strategy and I love how detailed you are in terms of objective entry signs. I am going to dig a little deeper into your system overall and the Steven Hopwood System, but just from my initial read through this looks like it could be very viable ( I will most likely be applying it to longer timeframes, as this is more my style).

Thanks for sharing and I am excited to dig deeper!

Happy trading,
Tad

@tads One thing...This system barelly relies on 10.2 Stevens system. Of all systems that it is based on Stevens system is practically the least important. Due to that i would suggest you to learn Ichimoku, PA and TMS. 10.2 TMA slope indicator is quite easy to learn you can pick it up in 1 day for sure.

Ok, that was the feeling I got after reading a little more, but it is good to hear that from you. I am already familiar with trading Ichimoku (and I do agree with you that the kijun line is the most valuable) and PA but will have to brush up on TMS. Thanks for the advice!

This is some random m5 chart, i have placed where entries should be placed. Just for study of this system over weekend.
http://shrani.si/f/1m/zR/47PHttBM/hybridentries2.png

1.Short
2.Exit short
3.Long
4.Exit long
5.Short (after trendline support is broken)
6.Exit short
7.Short
8.Exit short, Enter long
9.Exit long, Enter Short
10.Exit short, Enter long
11.Exit long
12.Enter long
13.Exit long

All entries would produce over 100 pips.

If you have been already actively trading this system this week you could have noticed that system itself has three cathegories of signal quallity or priority for trending markets which become most clear in heavy trending conditions such as this week.

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Signal priority of system for trending markets and markets with "normal"- not sideways movement:
1.Ichimoku
2.PA
3.TDI and 10.2 TMA slope and Stoch

This means that Ichimoku signals such as breakouts or kijun crosses are strongest stignal to follow in such conditions. You could have noticed that PA tops with dojis or pinbars have been broken a lot in such conditions, TDI failed many times, 10.2 TMA after giving signal for bailing of bulls recovered the next candle.

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Now here is signal priority for sideways market (no trends, pair does not pick clear dirrection of move):
1.PA
2.Stocastic
3.TDI and 10.2 TMA slope
4.Ichimoku

You can notice that signal priority in sideways market completly changes. It becomes very obvious after you are using system for 1 month but might be little surprising right on start. The best about this system is that there is no need to discard your trading day if market is moving sideways as this systems works perfectly in such conditions too, the only requirement is that moves are high enough to cover your spread and giving you a pip or two.



One more example:
http://shrani.si/f/q/ra/2YVGaeIl/chart54.png

And some more trade examples:
http://shrani.si/f/1m/7G/A6I2wGl/hybridequity4.png

http://shrani.si/f/35/7/4RFyPUE3/hybridequity3.png

your profits seem miniscule. are you just coming out with 1 or 2 pips each trade ? also, you are trading all day long instead of just 3 hrs you had stated. poor profits for 2 whole days.

I have attached required indicators to main post.

@whatfx I am not sure if you can call 250% per month miniscule profits. My exits are very different it depends on what signal i am exiting, on m1 charts trades are usually between 2-6 pips but 5 minut charts are above 10 pips.
This is just an option you can pick rather 5 and 15minute charts to have less entries with more pips on them, or even h4 charts if you preffer. This system works on any time frame and is not scalping only system.

Just wanted to mention that EURAUD short looks nice h1 or h4 chart. (2397)

Interesting system, and nice explanations in post #1.

Can you post the template along with the indicators. or the indicators are already with the right settings?


Thanks.

All indicators are already on default settings. No need to change anything in indicators. Just apply them.

If you have any more questions regarding entries let me know.

If there is anyone trading of mobile phone i am using the same system just two indicators are faked:
-Stocastic
-Ichimoku
-MACD (instead 10.2 TMA slope)
-2SMAs inside RSI (instead TDI, you do not use RSI line, only its levels, SMAs are 5 and 2 peroid).

Fake TDI is not that usefull as it gets very distorted, but still good enough to read some signals of it.

Good trading system, If I may share my candlestick pattern, It is called pattern stoch 533, this indicator has good pattern formula filtered with stochastic 5,3,3



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bb trading test

could you please TPL (tamplet) indicator

Hm could you let me know how to save template?

i cant load templates. can you attach the indicators seperately ?

how long have you live traded this and what were your results ?

Very nice system Janpec, thanks for sharing.

Hope you will be successful
but one thing for sure!
Scalping by Ichimoku (lagging and misleading Indicator) will be very surprising as you can see the history of this indicators which never be able to guide you during trading specially Scalping
You can visit Babysite, DailyFx, and so many sites which traders have been tested these indicators individually and mix with other more than 5 years and unfortunately all of then disappointed for scalping although the way each person uses and looks at the market different ( Hope you will be the one)
Any way May you will!

@whatfx I have attached separate indicators in first main thread. They should work without any problems.
As for trading i have been trading each of separate systems that "make up" hybrid system for few months. My results this month are over 300% of account increase, i have already moved to Zulu trade as signal provider.

@Fx compas no problem hope you will find it for good use.

@kamifx Dont know, from my experiance i have tested nearly all valuable and promising systems on forex factory and babypips. Hybrid system is made of best of them, at least by my testing.

hi Janpec,
thanks for sharing your system and for giving a good explanation on how to use your system. i am just new in forex trading and i still have a lot to learn to kick of my trading so I'm very thankful for people like you and most of the members here in FF for sharing their knowledge......more power to all of you.

i have one problem in regards to TDI, cause i cant find it in my MT4 list of indicator...can any one help me please.

thank you in advance.

"hi Janpec,
thanks for sharing your system and for giving a good explanation on how to use your system. i am just new in forex trading and i still have a lot to learn to kick of my trading so I'm very thankful for people like you and most of the members here in FF for sharing their knowledge......more power to all of you.

i have one problem in regards to TDI, cause i cant find it in my MT4 list of indicator...can any one help me please."

Once you download the indicators from post 1, copy them to your Metatrader experts indicators folder,
then close metatrader and re-open it. Look in custom indicators. It will be there.