m1/m5 Scalping

The reason I am starting this trade journal is to document my trades so that I can improve the success and my discipline in trading this method I am trying to develop. It is not my main trading method so if it doesnt work no problem, I have begun trading this on demo. I will not be giving specific details on this method. (This thread is not in the Trading Systems Forum it is in the Trading Journals Forum.)
This is also not a signal service. As this method is unproven it is not recommended for anyone to trade this with real money at this point in time including myself.

I believe that to be successful in trading you have to treat trading as a business. I also believe in the 10,000 hours concept (4-5 years full-time). To be expert in something you have to spend approximately this amount of time practising, studying etc. Of course there are no guarantees. It is no coincidence I believe that to gain a degree in most disciplines it takes 4-5 years of study. A lot more in some cases.
https://www.investorsunderground.com/10000-hours-day-trading-success-doesnt-happen-overnight/

Many newbies like to think there can be shortcuts in trading to be successful. Just follow some of the threads here on Forex Factory and they will make loads of money. Maybe some of them will. I doubt it though. There is no substitute for hard work I am afraid.

I also believe that every trader should develop their own trading method. The trading method should match their personality. Dont subscribe to signal services. I used to do that. I dont think one was ever consistently good. And it just distracts you from learning to trade profitably.

Following a Trading System thread here religiously may help you to become profitable. The trouble is most thread starters do not provide proof that they are actually trading that way successfully. You have to take their word for it. Undoubtedly some will be profitable at their own method but it can be very difficult to know who is and who isnt.

In general terms this trading method consists of finding a strong currency and matching with a weak currency on m30 or m60 TF.
I then look at m1/m5 chart and match the strong/weak pair in the opposite direction, ie look for them to be in a retracement in the HTF.

I also use Support and resistance. I try to protect my SL ideally with a confluence of S/R. Also I use S/R for potential target area. I always attempt to get at least 1:1 Reward/Risk but rarely succeed. If price action is choppy after I have entered a trade I might close it for just a little profit.

When I enter a trade it is generally by market order with a default 15 pip SL/15 pip TP. I then adjust SL & TP to where I want.

I started trading this on 15/06/2016.

I opened a cTrader demo account as I wanted to try cTrader. So far I like it a lot more than MT4. Unfortunately there does not seem to be many brokers offering this at the moment. The spreads I get on crosses are not as good as my main MT4 broker. One way of improving profitability if I do start trading live will be to find a cTrader broker with lower spreads.

From 15/06/2016 to 08/07/2016 here is my equity curve which cTrader displays.

Attached Image (click to enlarge)

cTrader also can display trade stats. Here are the trade stats. so far

So far this method has been profitable. I have been trading it with very low risk about 0.1%. Max DD 1.09% which occurred shortly after I began and was still working out the trading methodology.
Profit Factor at 1.24 is a bit low. I need to improve that. Most trades were taken on m1 but later some were m5. My gut feeling is m5 execution will be more profitable but less opportunities.
Edit. I stated I was trading at about 0.1% risk. Not quite correct more like 0.3% risk

Yesterday I took a couple of trades on an MT4 demo account I have instead of my cTrader account. I switched accounts as I wanted to create an EA to manage my trades on MT4 so in future I can decide whether I want to stick with my main MT4 broker with low spreads or make the switch to cTrader.

Attached Image (click to enlarge)

+12.7 pips (no commision)
The 2nd trade (eurgbp) I closed early as I heard that the future UK PM was about to make a news statement that would undoubtedly mention the Brexit fiasco

2 trades today.
NZDCHF long -11.3
USDCAD short +19.0
Net 7.7 pips

Wednesday 13th
6 trades
Net -53 pips

Thursday 14th
8 trades
Net 1.8 pips

Friday 15th
4 trades
Net 31.0 pips

Week 28 Summary
22 trades
Net 0.2 pips
4 profitable days and 1 very unprofitable.

Have added a couple of new rules:
1. Trading hours will be between 09:00 to 13:00 and 15:00 to 17:00 UK time.
2. I will stop trading for the day if I am down more than 35 pips.

I Journal every trade in a spreadsheet. I have added 4 filters to the SS and I give the trade a score based on the filters.
Filter 1 is HTF trend.
Filter 2 is retracement size.
Filter 3 is Support/resistance. And
Filter 4 is time, ie No trade entries before major news announcements and I don’ trade this at the London open or NY open.

It is probably no surprise that most of the trades I took on Wednesday had a Filter score of 2 only. In future I may only take trades with a Filter score of 3 or 4 only. I want to practice more before making such an idea a hard and fast rule.

Monday 18th
4 trades
Net -3.0 pips
Last trade GBPJPY short, 25 pip SL, trade was up 30 pips, moved SL to BE+1. Stopped out. Should have taken half off before moving SL.

Attached Image (click to enlarge)

I totally agree that unless you treat fx trading (a) as a business (b) put in at least 10,000 hours in learning trading and chart watching techniques you can't be a profitable trader.

I started with fx options trading in 1997 on a casual basis, shifted to fx spot trading during news events in 2002 and made money, changed to long-term fx trading in 2003 and lost money, switched back to fx options in 2004 and recovered all losses of spot fx trading and built up substantial equity by 2014. Finally, one year ago went back to fx spot trading while continuing fx options trading. Between 2003 and 2015 a lot of changes had happened in terms of development of MT4 indicators.
I used to watch charts regularly and learned to use indicators and EAs for analysis. I am a discretionary trader. The strength and weakness of currencies concept appealed to me. Good analytical indicators were available to trade MA retracements. I am trading exactly like you. I trade only in GBPJPY because of high daily range and use GVC's basket trader V6 analytical EA as spot trading GPS (from doing top-down analysis to identifying Instant Trade Now triggers for 1m-5m timeframe trading). I keep a target of total 80 pips a day (5 to 6 trades) trading only in Asian and UK sessions.

For money management I don't use stop loss and instead depend on my directional view of medium term to average positions. I keep sufficient equity in my account to have five positions added to average and reduce break-even for adverse trades of small-time TF. So far the returns have been good and there hasn't been any loss but drawdown has touched 25% level. The equity has grown by more than 65% as I trade on and off for 6 months in a year. All the profits are withdrawn every two months. When I am not trading fx spot, I trade fx options in EURUSD only - non-directional trades and book profits from premium decay using not more than 25% of equity. The fx options need risk managment by way of rolling vertical positions if the pair breaches any of the upper or bottom boundaries

Sounds like you have a very well-rounded experience in forex and options which is a very good thing.