Hey guys, for a while i have been scalping the markets and while making consistent profits the problem that keept going on was missing what was on the table. By that i mean simply missing the entry setup on certain instrument becouse of varius different reasons. The problem of missing out has nothing to do of being greedy and wanting to take more profits, but simply by valuing the time that you put in front of screen to make profits, the shorter the amount of consistent time per day the better, i am sure everyone would agree with that. Thus my aim was to shape full time day trading into activity that could be performed only 2 hours per day, while making consistent profits of it, which means that by default you have to follow many instruments to get the repeatitions/trades needed to do that, which naturally leads to missing setups here and there. So the answer is very simple how to solve the problem is connect together group of few/several traders that would trade my exact same strategy and send entry signals between eachother to decrease the chances of missing out on setup by a tons. Thus my plan first is to get those traders and then to develop indicator that would work inside MT4 and TC2000 so that traders would be able to send signals to each other online. If you can imagine the restaurant cooking/service system thats how it would work. A chef cooks the meal, rings the bell, the service comes and takes meal and takes it on table. Well thats at least how some restaurants perform. So in trading that would replicate on spotting pattern, entering trade and then emidently sending the signal on indicator. So now you are asking perhaps why not just using trade copying and let each trader only handle 1 pair? Becouse that would be not reliable to ensure all traders would participate, simply traders would after while drop of just letting the other traders do the work while they only get copied signals. So to ensure stable process it has to be done manually.
I am currency trader primarly, but my main focus was to fit the signal service into stocks, first two hours of NY open are best statistical way with high probability to ensure very large number of setups within 2 hours. Simply trading 15 currency pairs has much lower statistical probability of setup to appear than 300 stocks do, not to mention the probability of large move to accour when the trade is being entered within its life span of 10-30 minutes.
If you are person who wants to be come full time trader trading 1 minute charts then you are on the right place. Let me specify i am not interested in any higher time frame trader or someone who has full time job and cannot find on consistent basis at least 2 hours of free time durring LO-NY trading hours. You do not have to be long term trader nor to be previously profitable, having some basic understand of PA is a must though, which usually quallifies trader with few months of experiance.
In exchange you will be given consistently profitable (on daily basis) system for free, but you have to be willing to participate with sending the signals trough indicator once you get the grasp on system. I am also willing to explain system better trough Teamviever with plenty of examples for those who are serious on stepping on this road (altough you do have to bare with my broke english). So now perhaps you are asking why would anyone want to participate creating signals once they learn profitable strategy? Why not just "take the money and run away"? Becouse in order to achieve large number of repeatitions in very short amount of time you do need to follow many instruments. Indicator would have a track of every trader of how many signals have they put every month to other traders, anyone underperforming significantly would simply be cutted of from signal service. It is free service, but you have to contribute your share to take the positive of it.
Let me specify indicator will not be paid, nothing will be charged but it will be distributed for free only to selected members that have learned the strategy and are quallified in terms of their trading time they can put on consistent basis.
Strategy is very simple all it takes is discipline to follow it exactly. It consists of trading high probability setup (75-80%), with RR 1:1-1:3 and adaptive SL TP based on market volatility, change in volatility is the core mean for entry using the trendline as guide. Volume is a plus. Structures are the key. Important is to draw trendline correctly based on logical semi-symetrical volatility connection of market. It works in any market, any instrument as mechanical price system should.
I will also provide free alert indicator for MT4 that alerts trader when trendline is broken by candle close which greatly reduces chart watching and stress.
Rules for trendline drawing:
-trendline is drawn always from extreme point of price high low, never from avarage rejections.
-trendline is drawn on structure where volatility of legs has logical semi-symetrical sense eg legs should be similar in terms of movement
-always redraw trendline to follow last two high/last two lows. Always redraw if situation changes otherwise its impossible to make conclusion on volatility change in near term.
-only draw the descending trendline for longs and ascending trendline for shorts, never the other way around to ensure lower risk
Rules for risk managment:
-always use and set SL. Exit is based on break of low/high by close that was the leading leg of trendline break. Even though that exit is usually manual, SL should be resting somewhere near that area of low/high just incase you hit the news or micro black swan event.
-SL can be scaled lower if there is micro structure (rejection candle) near the patterns breakout. SL is put above/bellow micro high/low.
-Using volatility adjusted risk. This is very important part, for scalper that trades trough very different volatilie markets or instruments trough the day, adjusting position sizes to adapt to volatility could make or break the profitability on system. Many traders do not have to adapt to this profile if they use pips fixed SL (for example 10 pips every trade) or if they specifically trade in very similar volatilite based hours or strictly one TF. But as soon as you start to cross over volatility will have major impact on your profit performance. This means that trading volatility based system where you SL is adjusted to volatility size (highs lows and price reaction in pips distance) you need to constantly adjust position sizes depending on your pip risk per trade. There are plenty of position size calculators, either indicators or websites, you can also use simply paper and write down per each pair how large your position has to be depending on SL. Since every position is exactly the same in terms of risk, the profits should be measured in R sizes instead of pips. Typical R per trade is 1:1, but R is always structural high/low dependent on TP size, which means some trades have larger R on TP side. Each R counts as one unit which is reflected at % of risk of your total account.
Position size calculator:
http://www.forexfactory.com/attachment.php?attachmentid=2036724&d=1476124797
Rule for TP:
-TP is based on last swing low/high of structure before the break, unless the instrument is in trend. If in strong trending state TP is doubled. If you are unsure about trend, just go by first method.
Rule for entry:
-Entry by candle close, meaning break of trendline confirmed by trendline break.
-Candle close after break has to be close to the trendline, if break and close confirmation is far pass the setup. Distance is never measured by pips, you want to adapt to volatility which means that what guides you for distance is visual percentage distance of your actual TP on setup. If distance is larger than 20% of TP on structure, that is the number that exceeds quallified entry.
-Observe the change in volatility of the side that is breaking the trendline. If you see strong change in leg candle size when it breaks its usually a better signal to be completed. What i mean by that for example if you have structure where each leg has 5 candles in their leg either up or down, but sudenly the last leg that just broke trendline has only 1 or 2 candles that is usually good confirmation for breaking side to countinue the plot.
Rules for instruments specific:
-Stocks i only trade on long side and never have any positions opened trough market close due to significantly higher risk of gap no SL fills.
-Anything can be traded that has liqudity and the spreads/commisions are low enough. The maximum distance of commision+spread can be 20% of your TP size, it is VERY important that you get ECN broker for FX and good low comission broker for stocks. On crosspairs always have spread line visible on your chart, so that you can visually see what you are being charged at the time for spread, since the spreads are changing depending on liquidity. The larger the liquidity the better, meaning usually the stronger the moves the better. Scalping is not about fleeing away when things start to roll, but actually grabbing the oportunity becouse it creates larger amount of repetitions and it decreases trading costs.
Always be mechanical. Execute the rules exact every time.
Examples:
I will be posting more examples tomorrow.
I am currency trader primarly, but my main focus was to fit the signal service into stocks, first two hours of NY open are best statistical way with high probability to ensure very large number of setups within 2 hours. Simply trading 15 currency pairs has much lower statistical probability of setup to appear than 300 stocks do, not to mention the probability of large move to accour when the trade is being entered within its life span of 10-30 minutes.
If you are person who wants to be come full time trader trading 1 minute charts then you are on the right place. Let me specify i am not interested in any higher time frame trader or someone who has full time job and cannot find on consistent basis at least 2 hours of free time durring LO-NY trading hours. You do not have to be long term trader nor to be previously profitable, having some basic understand of PA is a must though, which usually quallifies trader with few months of experiance.
In exchange you will be given consistently profitable (on daily basis) system for free, but you have to be willing to participate with sending the signals trough indicator once you get the grasp on system. I am also willing to explain system better trough Teamviever with plenty of examples for those who are serious on stepping on this road (altough you do have to bare with my broke english). So now perhaps you are asking why would anyone want to participate creating signals once they learn profitable strategy? Why not just "take the money and run away"? Becouse in order to achieve large number of repeatitions in very short amount of time you do need to follow many instruments. Indicator would have a track of every trader of how many signals have they put every month to other traders, anyone underperforming significantly would simply be cutted of from signal service. It is free service, but you have to contribute your share to take the positive of it.
Let me specify indicator will not be paid, nothing will be charged but it will be distributed for free only to selected members that have learned the strategy and are quallified in terms of their trading time they can put on consistent basis.
Strategy is very simple all it takes is discipline to follow it exactly. It consists of trading high probability setup (75-80%), with RR 1:1-1:3 and adaptive SL TP based on market volatility, change in volatility is the core mean for entry using the trendline as guide. Volume is a plus. Structures are the key. Important is to draw trendline correctly based on logical semi-symetrical volatility connection of market. It works in any market, any instrument as mechanical price system should.
I will also provide free alert indicator for MT4 that alerts trader when trendline is broken by candle close which greatly reduces chart watching and stress.
Rules for trendline drawing:
-trendline is drawn always from extreme point of price high low, never from avarage rejections.
-trendline is drawn on structure where volatility of legs has logical semi-symetrical sense eg legs should be similar in terms of movement
-always redraw trendline to follow last two high/last two lows. Always redraw if situation changes otherwise its impossible to make conclusion on volatility change in near term.
-only draw the descending trendline for longs and ascending trendline for shorts, never the other way around to ensure lower risk
Rules for risk managment:
-always use and set SL. Exit is based on break of low/high by close that was the leading leg of trendline break. Even though that exit is usually manual, SL should be resting somewhere near that area of low/high just incase you hit the news or micro black swan event.
-SL can be scaled lower if there is micro structure (rejection candle) near the patterns breakout. SL is put above/bellow micro high/low.
-Using volatility adjusted risk. This is very important part, for scalper that trades trough very different volatilie markets or instruments trough the day, adjusting position sizes to adapt to volatility could make or break the profitability on system. Many traders do not have to adapt to this profile if they use pips fixed SL (for example 10 pips every trade) or if they specifically trade in very similar volatilite based hours or strictly one TF. But as soon as you start to cross over volatility will have major impact on your profit performance. This means that trading volatility based system where you SL is adjusted to volatility size (highs lows and price reaction in pips distance) you need to constantly adjust position sizes depending on your pip risk per trade. There are plenty of position size calculators, either indicators or websites, you can also use simply paper and write down per each pair how large your position has to be depending on SL. Since every position is exactly the same in terms of risk, the profits should be measured in R sizes instead of pips. Typical R per trade is 1:1, but R is always structural high/low dependent on TP size, which means some trades have larger R on TP side. Each R counts as one unit which is reflected at % of risk of your total account.
Position size calculator:
http://www.forexfactory.com/attachment.php?attachmentid=2036724&d=1476124797
Rule for TP:
-TP is based on last swing low/high of structure before the break, unless the instrument is in trend. If in strong trending state TP is doubled. If you are unsure about trend, just go by first method.
Rule for entry:
-Entry by candle close, meaning break of trendline confirmed by trendline break.
-Candle close after break has to be close to the trendline, if break and close confirmation is far pass the setup. Distance is never measured by pips, you want to adapt to volatility which means that what guides you for distance is visual percentage distance of your actual TP on setup. If distance is larger than 20% of TP on structure, that is the number that exceeds quallified entry.
-Observe the change in volatility of the side that is breaking the trendline. If you see strong change in leg candle size when it breaks its usually a better signal to be completed. What i mean by that for example if you have structure where each leg has 5 candles in their leg either up or down, but sudenly the last leg that just broke trendline has only 1 or 2 candles that is usually good confirmation for breaking side to countinue the plot.
Rules for instruments specific:
-Stocks i only trade on long side and never have any positions opened trough market close due to significantly higher risk of gap no SL fills.
-Anything can be traded that has liqudity and the spreads/commisions are low enough. The maximum distance of commision+spread can be 20% of your TP size, it is VERY important that you get ECN broker for FX and good low comission broker for stocks. On crosspairs always have spread line visible on your chart, so that you can visually see what you are being charged at the time for spread, since the spreads are changing depending on liquidity. The larger the liquidity the better, meaning usually the stronger the moves the better. Scalping is not about fleeing away when things start to roll, but actually grabbing the oportunity becouse it creates larger amount of repetitions and it decreases trading costs.
Always be mechanical. Execute the rules exact every time.
Examples:
I will be posting more examples tomorrow.
