1M-System for "The 1 Minute €100 Experiment"

Hello Traders,

here I will outline my basic trading strategy which will be used when taking on my challenge which I am keeping track of in this journal: http://www.forexfactory.com/showthread.php?t=527693

This here should help me to bring my basic approach which I have within my head at the moment to paper and finetune and improve it as time goes by.

I am only using PA and some moving averages as dynamic support and resistances along with S&R Levels, round numbers and daylines (open,high,low) and from time to time some fibonacci retracements.

I will write some more later on.


Some Rules apply:
Everyone is welcome who wants to contribute something and take the system to another level.
If you do not like my approach you do not need to be here
I do not like indicators beside what I have outlined above and I do not want to discuss about a possible use of them to this system.
Do not post trades with fancy indicators.
Do not post trades which use a different system than the one which will be outlined here.

Do FF not utilize a minimun number of vouches that enables a member start a new thread anymore?

Chapter 1: Trend definition

The trend is your friend, everyone who trades knows that or at least heared it at least once.

I do not want to go into detail here. There are different trend sizes, according to literature it are 4. (Big, Medium, Small and Smallest)

I am identifying a trend by the P123 method. I attached a picture which i took from a book to outline my approach to trend definition. (Please ignore the white 1,2,3 they are not relevant for what i want to outline)

Basically in an downtrend: lower high follows lower low, again followed by a lower high....and so on and on. Where the start poin or highest pint is marked with a 1
and the lows are marked with a 2 and the lower highs are always marked with a 3.

For an Uptrend it is just the other way round.

For this system i am going to define the guiding trend on the M5 and M15 Charts.

I do not know but it does not look like it.

Chapter 2: What do i want to trade

I want to trade the movement within a defined trend (M5/M15) from a Point 3 to a new Point 2. (See attached Picture).

Why do i want to trade this part?

1) If i am going to trade the trend I always need to be patient when the trend goes into retracement and this is always a mental problem seeing the gains vanish and depending on the size of the retracement maye the trade will show a negative balance again for some time.
2) I am involved a shorter time in the market. The time that i maybe think what do i have to do which an open position is reduced
3) For me the movement from 3 to 2 is the best part of the trend

On the enclosed picture i marked the movement from Point 3 to point 2. This is what i want to trade.

Chapter 3: Where do i want to Enter the market

Now that i know what i want to trade I need to define where I want to enter a trade.

Basically I want to take the trade when the trend is moving back out of the retracement and is starting to speed up.

Enclosed a picture of my preferred "zone of action"

Chapter 4: Entry

Before talking about my Entry Setup I want to say thank you to all the guys who contributed to this thread http://www.forexfactory.com/showthre...&goto=lastpost
especially Phillip Nel. I learned a lot reading through this and parts of it I tried to incorporate into my trading.

For me it was always hard to determine a good point for an entry. Even when I have identified a trend and the retracement going with it, where the hell was the best point to jump in and try to get the best of it.

Here the above mentioned thread comes into play with its definitions about market rhytm and how the price respects some moving averages as lets say dynamic resistances.

I have chosen to use the EMA8 and EMA 21 as the moving averages.

Chart layout:

M15: EMA8, EMA21, EMA32(EMA 8 on 1H), EMA84 (EMA 21 1H)
M5: EMA8, EMA21, EMA96 (EMA8 on 1H), EMA252 (EMA21 1H)
M1: EMA8, EMA21, EMA120 (EMA8 15M), EMA 315 (EMA21 15M), EMA480 (EMA8 1H), EMA1260 (EMA21 1H)

What am I looking for?

I will describe it for a downtrend.

Bounce of EMA21:
1)A downtrend has been identified on the M5/M15 charts and the trend is currently in the retracement and possibly (u never can be sure!!!) in the area where i want to take action (Picture from chapter 3

2)Go to the M1 timeframe:
the price moved below the ema 21 and the ema8 and is now coming back to the ema21. When price action looks like that price will respect the EMA21 and bounce of it that is my signal where i want to get involved.

Bounce of EMA8:
is basically the same like above. Price has broken below EMA8 and is retracing now to it but finding resistance there. If I am trading of the EMA 8 i take care that EMA8 is close to EMA21.
The further EMA8 has moved away from EMA21 the more likely is a retracement to EMA21

SO what the hell am I doing with the other EMAs.

It looks like that some EMAs are respected by the price on different timeframes. So if the price moved up to one of the higher EMAs and bounced of and afterwards creating one of my above mentioned setups I am hoping for an even stronger and faster movement.

I attached to charts.

The first one shows the trend that I have defined on the M15

On the second one u can see my chart layout on the M1 with the different moving averages.
The places where the price is bouncing of the higher TF EMAs is marked there.
The green marked areas are primary entries I am looking for. The blue marked Entries are the ones where the price moved already a bit and a possible retracement might be ahead.
When I enter on those I will look to keep trailing the SL closer to the PA.

Been done here I think (one minute trading)
http://www.forexfactory.com/showthread.php?t=486543

thx for posting the link. have been looking through it quite fast. seems to be a similar approach.

i never stated that I discovered something new.

No problem Pips. I was not criticizing you, merely pointing you to threads, where Pins were discussed, to assist your research.

i appreciate that, already subscribed to this thread. if someone is trading a similar system I am pretty sure I can learn something

Chapter 5: Stop Loss and Trade Management

A Stop Loss is something very personal for every trader. Some prefer wider SLs some want to get into the market with a tight SL.

On the higher timeframes I usually try to keep my SLs very close to the market. mostly above the high of the last 1-5 candles.

When I am starting now my experiemnt on the 1M i will also try to do that. On the bigger TFs the market noise does not have that much influence like on the 1M, so
if it turns out that I will get stopped out to often on the 1M using this method I will reevaluate it and might set the SL a bit further away to the allow the market to breath.

Trademanagment:

I am not using a fixed profit target as I do want the market let decide when it is time to take me out of the trade.

My trading platform by now is offering some trailing stops, the ones that are intersting for me is a SMA8 TS, an EMA20 TS and a Supertrend TS.

Hi P1ps0mat

Man after my own heart, love 1 minute charts...

I like your approach trying to catch the momentum runs from 5 and 15 min trends. Like it and a good idea... Should lead to tight stops and good RR's if you get it right.

Its something a lot of guys on my thread refer to a lot as I tend to just trade the 1 min trend with no regard for the higher timeframes. However that doesn't mean I'm not interested in the idea of trading higher timeframe moves on the 1 minute entries. How will you be identifying the higher timeframe trends to trade??

Will be watching your progress with interest and if I can help I will, one thing I will quickly say is to try to identify the strongest tends on your higher timeframe as they are the pairs that will give you the longer runs on your 1 minute...

Good luck I wish you well..

hey clive,

thx for your response.

turnip15 brought my attention to your thread yesterday, and i have to say I like your approach as well. As you are already trading the 1M Chart for a longer time I am sure I will get some more insights there.

Regarding your question on how I will try to identify the trend on the M15, I am trying to find the most recent 1-2-3 pattern on the M15 (you name it ABCD)

Problem is that because of the different trend sizes this is also a personal thing. In Post 7 I attached a picture with an 1-2-3 which I identified as my governing trend for the M1

You already named it in your post. tight stops and good RRs is what I am looking for on each TF.

Wish u a good start in the new trading week