simple profitable 5pip scalping strategy

Hi all......

I'm starting this post to share with you my strategy in the hopes that anyone willing will help to both confirm my findings and further improve upon it.

the entry rules are very simple.....

we have a 15 lwma (orange)

a 25 smma (green)

a 290 lwma (red)

and a babon slope (red and white)

when all 3 moving averages are moving up and the babon is white you buy. set a tp for 5 pips and an emergency sl at 20 pips.
re-enter after a winning trade when the babon slope has changed from red back to white and all 3 ma's are heeding up (do not re-enter if the babon is still white it must go red then back to white)

the opposite is true for a sell signal.

in this example there are 7 winning signals and 2 that failed, the entry points are the yellow arrows and the exits are the red.


how to spot when a trade has failed using the green smma....

here we would have taken a trade as conditions were right at the yellow arrow but slowly things began to turn and eventually the green smma began to move in the opposite direction so we close the trade for a small loss



when to trade and when not to trade....

I have found the best time to trade this is during the London trading hours when movements tend to be bigger. I'm on gmt and up at 7am and things always seem to be gearing up by then and are good till some time between 4 and 5 pm (gmt obviously).

if things are flat then you can get false signals so avoid using if the green and orange are both interacting with each other a lot or worse all 3 are looking flat



and as always big news announcements that can shake up the market and cause you to hit the emergency stop before to can close a trade!!! at least a half hour ether side.

I follow 2 pairs at the moment eur/usd and usd/jpy because of there small spreads with potential for large moves.
from what I can seen you can shoot for around 50 to 100 pips in a day.

as I said I want to see whet people think and what can be done to improve this. I'm working on a indicator that lets you know when the conditions have been met but at the moment it paints on every candle rather than just the first one then don't paint again until conditions are broken then met again so any help with that would be good.

all suggestions are welcome.
ill work on a better template but here it is along with the babon slope
happy hunting.

here is where I'm at with the indicator. as you can see it paints when all 3 ma's are moving up but is ignoring the babon slope also it paints on every candle and seems to be a bit sensitive as the 15 lmma is actually going down at some points but it is still throwing out signals.
if anyone is willing to help with this It would be much appreciated.

I know its just after news time but here is a quick 5 pips. entered as all 3 moving averages are on the up and babon went to white. was actually the second possible trade I could have gotten in that movement.

I think you should delete those funny moving averages, then the system might work.

would love to see whats coming up

not a lot of love for the Moving Average. maybe I'm fluking it but they seem to be working for me

What time frame please?

At least he should find some plain basic reason why that mix of lines can predict the market. Otherwise it is BS

its on the 1 minuet

thanks, I'm away from the computer a lot at the moment so its hard to catch every trade. wrong time of year to get anything done

that's fair to my knowledge (all be it still limited) the 15 lmma represents the trend on the 1 minuet and acts as a reasonable support level. the 25 smma is showing what's happening over 5 minuets and is your second support. and the 290 lmma shows what's going on over 15 minuets. the babon slope shows what direction the price is currently moving. when they are all in agreement its easy to snipe 5 pips.

Indicator with alerts.

7 winning trades and 2 failed means -5 pips... Just doing the math

the stop loss at 20 pips is only there in case of emergency you use the green ma to tell you when the trend has changed and its time to get out the trade. the first trade that filed to hit its 5 pips was closed at -2 pips and the second was closed for a tiny profit. soon as the 25 smma has changed direction you close the trade. in total there is over 30 pips profit there.

thank you ill take a look at it

fishbo81, thanks for sharing your trading method. I believe your system is flawed because your risk to reward ratio is off. You are risking 20pips to make 5pips. Even with a very high win rate, you stand a good chance of blowing up you account.

I've attached an image that shows a better entry and possible exit to your system with a better risk to reward ratio.

I am wondering how traders come up with the MA periods, in this strategy 15, 25 and 290. What is the magic of those numbers? Otherwise you might as well use 30, 50, 580. Or 1,2,3. I'm just curious.

Now it looks more reasonable thanks for the explanation. I'm not quite techy in trading (use order flow data from futures to estimate S/R levels) and suppose fundamental analysis is more powerful and rich for trading signals. But will also keep an eye on your endeavors maybe there is worth something to learn.

already answered this in post 11

very interesting. defiantly a good way to catch the bigger moves. the 20 pip stop loss is only there as an emergency. I define an entry as failed when the green ma changes direction which usually results in a 4 to 6 pip loss