Open Scalping Strategy

back to trading guys, very nice results griff

Thanks swilliam! One thing I've noticed with some threads here on FF is that they quickly deviate from the initial objective and proposed strategy. So, I have made it a point to leave unchanged the core rules as you defined on page 1. All the refinements suggested have been to enhance and fine tune the win% with respect to time filters and monitoring of statistics. Let me know if you think otherwise.

Ok, here we go! Got multiple setups - watch those BRN, NU&AU - had Tokyo dips (wins) on both. AU looks tough... a .900-level long into a BRN... EU, UJ, UChf, EG, GJ candidates

I'm taking a pass on AU - (5th wave of 5-wave move wave-3 isn't the longest in price? could be correction?) needs extension (or the B of the ABC?) + BRN (its a WMGG trade)

GJ - grappling with BRN which is above the entry (MWRR trade with no Tokyo dip)

Everything is pulling back to the W/M opens - hang tough

Good and bad news there ... bad was I dialed in the SL incorrectly on GJ 12ticks(!!! Son of a @##$% !!!), couldn't change it in time , no harm done (it only went south, like, 5billion pips!). Good news, EG +8pips (MWGG trade) in a millisecond That should have been two wins but sometimes you lose without even getting out of bed

UJ is up but the water is too muddy... Ok, Griff, would you like to take home your pips or risk them for a chance to get even more shinny green pips... ummm, I'll take these ones home please

hi grif

so far this system works well, what method would you suggest to improve it? can you explain it on a step by step. extra filters would reduce trades, but increase win rate

ty
mika

Hi Mikajap, I totally agree! Swilliam has come up with a brilliant trading strategy - its like the market comes to you instead of you chasing the market. I say brilliant because its one of the simplest strategies I've seen yet powerful, perhaps because of its simplicity(?). Something really unique and (somewhat) strange happens as PA approaches the entry.

It is important not to change any of the core rules of the strategy. Most importantly, you can not automate (EA's, although I'm just learning what they are, I have no experience with them, but find them interesting) or 'blanket trade' this or any other 'set rule' (non-adaptive) method - the results in the long term will in all probability come out 50% win. So discretion and time filtering + (of course) appropriate MM may produce the much desired 65% win for 1:1 R:R.

I haven't got a solid amendment to offer swilliams yet but this is what I'm using and thinking about... (I must say that all this may turn out to be non-fruitful, i.e. it may well produce 50% win in the long run after all - who knows?)

1. I note the results of the Asian session: I suspect the win% will improve if this session is not traded. It seems that when there is a win on one major its usually a win for most so the Asian session can be deceptive in this way. I also note the statistics presented by fbird (see above). However, it is a good idea to see the results of the Asian session as there may be an indicator in the PA. I've observed that a kind of a dip ('Tokyo dip') happens, i.e. PA dips into the entry (win or lose) and retraces (sometimes strongly). This seems to increase the win% if the pair triggers at the London open?

2.a. I trade at the London open (primarily): if there are too few trades I may consider the Asian session
2.b. I don't trade week 1
2.c. I don't trade Mon - core rules

3. I trade with looming Red News (usually the case): actually this is apart of the swilliam core rules and its really important - the Red News must result in decisive outcome, not be inconsequential but not be insane (tough rule)

4. I use PA its key: I make sure PA is not over extended. Especially if step 3 is not met. I prefer going with a trend and having a MWRR or MWGG trade (not sure on this yet). MWGR, MW RG, etc trades may well be extended by open of the current D candle. If PA or technical analysis shows me it's a strong move I'll put in a runner (1:3 Risk:R moving SL to 1:1 once price is around 1:2).

5. My TP target: ATR can be used as an average range of the candle that (may) will trigger the trade so it makes sense to want to hit TP within 1 or 2 candles(?). So I check ATR(14) on the 15M TF. If this reads say 4 and I choose TP=20 it may take on average 5 candles to hit TP. So, I chose either the ATR value or 2 x ATR at most depending on the PA [around 7pips is a good TP for EU, AU, etc]

6. [something I would like to do in future] Auto-reset SL: I find if there is a lose from a dip then either the entry is just hit and PA strongly retraces (nothing can be done here) or it goes for around 2-4 pips (spreads) before retrace and hits SL. So, I would like to setup an auto thingy where the SL resets to say 3 pips before the entry if 3pips are gained. The logic being if its not a win by then and comes back it most likely will take (full) SL.

7. MM: up to individual trader here and is essential. Otherwise you can have positive pips and negative profits (the number of +pips will be next to meaningless). I'm very conservative and trust my statistics which is why I have no problem watching a trade. Sure I get worried and emotional but I keep saying to myself - I trust my statistical analysis! I would have to make 10 consecutive loses in order to freak-out and I've never done that scalping (or anywhere near it actually).

Well this is what I do. I must say all this is grossly under-tested and going live with a full account would be madness. Linhpip is leading the way for us regarding data on a minor account. My disclaimer here is I cannot (at any stage) guarantee this amendment to the strategy will work for anyone but its sure working for me at the moment. Keep going, you are doing great and we'll see where it leads us!

EDT: other things to note are BRN&RN, I don't focus on the number of trades, rather on the win% (of course, the process takes precedent)

Ok, here we go! The quiet before the storm... watching GU (MWRR), Tokyo dip (win). UCad never came back from Tokyo (). EG (MWGG) a little Tokyo dip, looking steady...

Weird stuff ...wasn't a good session for scalping, PA was all over the place after entry and liq very low

GU -7pips : just missed TP by 1pip
EG -7pips : gave 5pips

...there was too much pip-age on the table to let it come back but this was very interesting...

The US open went really well yesterday (I didn't set any trades) much better than the London open... nothing looks good here... this is the first time I've seen this... there is almost nothing on the majors... GJ, UJ & UCad maybe in the US open?

Ok, I see what is happening... the 1D candle two days ago (on the back of multiple Red News) on a number of majors were relatively large and induced immediate corrections (inside candles - Harami's effectively) and thereby changing the trade types for this system; for excample,

NU is a MWRG, AU is a WMRG, EU is a MWRG, UJ is a MWGR, UChf is a WMGR, GJ is a MWGR

So, PA is too far from entries...

Side note: once again good trade on Aussie 200 +10pts no problem [had runner but just came back to 1:1, no problem]: amazing statistics here with 100% wins so far! I guess this is easier to trade.

A weird week with low results... 2 win (including Aussie 200) and 2 lose and 1 error (equal to BE?)... I'll be reviewing this one

hi guys
i read whole the thread , and one question
when there is a high news impact ahead , we still need to keep these trade run or just close all ?

Hi cavenlee92, this is a great and important question. It seems like you are on a knifes edge with regard to what type of news to trade. In fact, its apart of the strategy to trade Red News (as you read in previous posts, traders described this as a news strategy). But we know there is various levels/importance of Red News and, as it seems, various ways they impact the Market. Generally, I have observed to keep away from extreme events (NPF, etc). To tell you the truth - I have 'no idea'.

Thanks for the reply griffinssoul
ok! So the latest indicator u guys using is on first page?

Ok, traders, just found something of interest when analyzing the two losing trades from this week. I discovered an interesting, and rather general, connection between the 'historical volatility indicator (HVI)' and potentially reversing/bouncing trades from the entry (the type that trigger entry and reverse to hit SL). This, the HVI, is more transparent than just using the ATR (as I usually do, and still will but for other reasons). (I should note that these indi's simply supply estimates that would otherwise be too cumbersome to calculate and are generally not used as triggers etc.)

Looking at the chart (below, EG 15M TF) it turns out that the further away the trigger candle's HVI value is from the middle HVI value (defined by High of HVI + Low of HVI, divided by 2, from previous day) of the previous day then there is greater risk of a 'bouncing' losing trade (as was the case for EG and GU this week). A quick glance back at all my losers shows that this was the case. Note that the period of the HVI is important - I have set this as the time between the Tokyo and London opens, 28 periods (15M TF)*. This needs more analysis and testing. I must say that this should not be interpreted as a 'trigger signal' but rather as a measure of risk going into a trade. For example, if the middle HVI value is 1.00000 and the candle before the potential trigger candle is 0.01000 then this would be high risk of failure. If it was 0.50000 then you may still enter the trade but with a tighter SL strategy - like setting the SL to BE if you gain ATR(14)-spread pips?

*If the period is too small <20 then the reliability of the indi decreases and eventually, for small enough periods, becomes somewhat meaningless.

Hi cavenlee92, Yes, you may download the indi from swilliam's original post. I simply do things by hand - put in horizontal lines that is, no problem, either way. If you have any problems there are many many experts here on FF that can help you.

Please note there are various definitions used for the HVI (not to be confused with things like VIX etc). So, the basic one used here is defined by the formula

HVI = Standard Deviation (Close+Previous Close)/(Previous Close) over N periods

Been a good month for me so far!! So far this month I have made a decent amount of pips, it seems avoiding the first 5 forex trading days or full working week works quite well.
I didn't get to trade on the Friday last week but on the Thursday I got

AJ +15pip
EA + 7pip

My losses for the day only totaled 14pip so I was profitable for the day. Which seems to be the case so far this month my winning trades have outnumbered my loosing trades or been more pips winning then loosing.

My most profitable pairs so far have been GJ (86pip profit) and UJ (122pip profit) which would indicate that a TP and SL of 15pip seems to be perfect for these pairs. I am going to start changing the TP and SL for my least profitable pairs and see if I can find a good number for these pairs.

Hi Reeeen4, thank you so much for the information. You are getting incredible results! I really admire the way you are thinking and applying your analysis, well done!

Ok, this is what has been found from the trades so far based on HVI (all trades gave shown pips and came back to SL - 'Tokyo dips')...

NU(MWGG ): 1st entry gave 0pips ; Probability of success was 29% : 2nd entry gave +4.4pips ; probability of success 49%
AU(MWGG): 1st entry gave +12pips ; Probability of success was 51%
UJ(MWRR) : 1st entry gave +7pips ; Probability of success was 31%

I guess its time to create an indi on MT4 because this is too cumbersome to do by hand...

so far for today

AU +7pips
EU pending
UJ first trade -7pips
second trade +10.5pips
GU no trade
GJ no trade
EJ no trade
AJ no trade
total = 10.5pips
i reopen again the UJ at the same price point but , the TP add more 50% as the first page mention
anyone using the second trade method? it is correct to use second trade method ?