(binned per thread starter’s request) 007 Scalping

A little upgrade

FT I mean what do the lines represent like this below. Not 1hr 4hr etc They are daily, weekly etc OHLC what are they ?



So I have my own naming convention, so I can look and see and know that 1.07381 was week 12/2017 open.

Another line might tell me 2014 Open, Another might tell me Monday close, Understand now ?
So what are your lines in accordance with this info ?

The last unvisited levels (fresh levels)
Close/Open h1 and h4

Ok FT, I don't want to go that low in what I'm presenting here but yes you will see overlap that monthly or weekly etc will also be an hourly or 4 hourly etc as the open and closes are obviously always on the top of the hour. I don't know how far down the line experience wise you are but best to stick to them and see them as they are represented in the larger context.
So what is 1.06597 ? What is 1.06412 ? I know you probably get what I'm talking about but it is best to see what they represent and at some point I will likely go into why.

This post for FT. Don't take this as ridicule mate, it's not, I hope it makes you think about the trades you have taken and how you reduced your odds. Now of course you can ignore if these trades are for a different strategy but you will still see how you may have increased the odds of survival if they were placed differently and at least give you time to take stock and think about your situation. I see you are on demo which is fine and you held through the news when your entry was so close to market, again fine if it's part of your plan but if not it is not wise to do that. You will also note that the momentum from news found sellers at the daily open. I have said look for where the first road block might be. Not a million miles from your entries. That was a warning shot across the bow to proceed with caution. You then added again do I need to say more ? I seriously doubt it was part of another strategy as even for scaling, entries were on top of each other. Learn from it, I hope this dissection helps you. Good Luck.

My background was very poor, my parents did their best, old man was a boy sailor on Atlantic convoys during World War 2 from the age of 14. Then post war worked in construction but was very political and that cost him in earnings. He was often blacklisted as wasnt afraid to stand up and be counted for his fellow workers rights etc. That continued all his working life. My mother worked too but low paid stuff to makes ends meet. I look back and would not have it any other way, still had great childhood even without much money. So your formative years in that kind of environment kind of conditions you to think this is the hand we have been dealt, just get on with it, try and get one step further up the ladder than the last generation.

So I fast forward a bit. I was working in London as a site engineer late 80s early 90s. All round Canary Wharf heavy development going on and earning good money for the time but working 7 x 12 most weeks. Anyway it was around the time the term Yuppie was coined. Local paper was awash with the exploits of these characters. So these Yuppies turned out to be London Traders and generally behaved very badly, spent enormous amounts quaffing finest champagnes, lunching on Lobster Bisque/Filet Au Poivre and crashing Porsche 911s like they were matchbox toys. So I start thinking to myself, what have those guys got that I havent? Of course I mean apart from the fact of their current employment status. So I made a point of reading around what these guys were saying/doing and I concluded that a lot of them actually were not overly intelligent, they talked a good game and seized their opportunity. Fair play to them really.

My interest wasnt because I wanted that lifestyle but when youre working 7 x 12hr shifts for the cost of one of their lunches, you do start to think about easier ways to bring home the bacon. So started to make a point of saving a few quid and started trading AIM with E Trade ( I think or TD, maybe both cant remember). Anyway I did ok but looking back I think there was a large amount of luck. So kids came along and everything goes on hold as just not enough hours when they are tiny but still tried to keep learning stuff bit by bit. Somehow came across a book by Cornelius Luca, Trading The Global Currency Markets. I dont actually remember any of the detail in it now but that and the fact my brother used to get paid in US$ sparked an interest in currency trading. I like the John Rambo vid because one of the very first currency deals I did was using a fax the same as Rambos, the order was to a contact my brother had in Thailand, I know crazy, hard to believe now isnt it but it bobbed along and between us it worked out for a while. I might add absolutely light years away from Rambo in terms of size. So kids growing up and needing my time/ training/working, something had to give, so trading went on back burner until they were teenagers or thereabouts and I started again but this time online.

So as of now Im on my second stint at trading full-time as first time I scalped the clock round and burnt out, went back to work for a rest and traded longer time frames (still looking for tight entry) but came back to what I love scalping but take time out now for other things.
So in terms of stumbling on my approach (I dont like the word system it sounds too rigid for my liking), I was lucky that I still had the thoughts of those yuppie guys who liked to make it sound so complicated. I was never convinced as despite some having good education they seemed complete morons. Right place right time kind of thing. So I told myself this is all a ruse to keep guys like me from wanting to get in on the action. So I read some technical trading books but never really connected with much and never felt comfortable in trusting the signal of an indicator, so with a bare chart started with some lines of very basic support and resistance and started to notice the effects of OHLC which is what I still use today and I was right, you dont have to be very bright to trade this way. Incidentally Ive no idea if any of the yuppies traded this way but it was a nice story and got me focused.

So you can see all of that is no overnight success story but it is all worth it.

So Im comfortable financially but because of my nature and the back story of having nothing I had the foolish notion that I would like to help other ordinary working people who are just starting their journey, I can see how that idea is flawed now and no doubt there are a few who want to put the time in and they will likely make their way just like I have but like I said in the April Fool Post the GOLDRUSH subscribers and lurkers at the bottom will probably remain losers.
I have been willing to show you something which has enabled me to be able to throw a few quid on the table just like that.



Using that age old formula for volume. L x B x H = 7 x 4 x 2 = 56K Lying Around in Cash.
All I could fit on the table and still keep it looking symmetrical.

All I have asked for is some participation. Only couple traders jumped in, they will likely go on and succeed they were not afraid to step up and will likely find their own way. I wish them well.

TWEE PLEASE CLOSE THREAD.

You made out of the stuff of your father. Glad to have you as a friend, mate. Those that want it bad enough will get it. Period.

Stu, thank you for your effort and time.

No, none of the entries has to do with the subject matter here, I'm testing various forms of approach using the demo account. But your observation is good.
And yes Im learning, thank you Stu.

And yes I think I will get there

Nice aproach Stu, thanks for sharing


second trade was close to news, so decided to take small profit and not trade in to the news..

I'll chime in so we can keep the discussion going..

Stu, please don't shut down the thread just yet. This really should be one of the top few threads on FF. Obviously the majority of new traders want to get rich quick and get rich easy. They don't want to put in the work that this method requires even though it's fairly simple. I hope that we can let the thread continue growing and as time goes by more interest will be generated.

I've been working on scalping reversals at S/R levels on the 1M time frame and I do believe I may be able to use these OHLC prices and combine it with the current method I've been using to extract pips. My rules are slightly different. However, in order to avoid confusion I will discuss this concept and strategy as Stu presents it.

I think a lot of people are overlooking how profitable this strategy can be if you can develop the right entry and exit rules to take advantage of these "magical" levels. It does involve good price action reading skills (not just price patterns, literally how price is acting at those OHLC areas). It seems that price is drawn to these levels only to have a bounce reaction to them (not always). We don't know how far the reaction will be because we can't guess how many orders are stacked in the area. But, we can hop on for the ride and take a piece of the action. As Stu has said, it's a dynamic market and in order to become profitable you must be a dynamic trader. If you can do that, this method can really become a money making machine.

Here's an example of a potential trade:

USD/CAD Daily Chart


The highlighted bar in question is the Daily open on April 04, 2017. Watch what happened when price returned to that level.

USD/CAD 1M Chart


A bounce right off of the level! In fact, that was the daily low for the day.


You could of entered as price reacted to the level, or you could of waited for a confirmation that the level was going to hold before entering. Either way would have worked. If price went against you and it was clear the level wouldn't hold you either cut the position or get out at the next best price. As price moves your way, you follow it and cut when it begins turning. No need to be greedy and catch the whole move, even a catch of 10 pips is better than nothing. As mentioned earlier, be dynamic and go with the flow.

Now obviously not every level will work out so perfectly. This is where the odds enhancers come in. They help put the odds in your favor and combined with good price action reading skills you can become very successful.



Notice how price is making ~10 pip moves. When it comes to the level, it just completed a 12 pip move which is about what we wanted to see at that moment of time. There was a decent chance it would make a pullback from here which enhanced our odds.

If the hit to the level coincides with an hourly close or increased tick volume activity, it would further strengthen the case for a long.

So that is my understanding of how this method works so far. How did I do, Stu?

Hopefully we can get a good discussion going with ways to enter and exit, more examples, live trades, questions, etc.

Let me also quickly add that it had been around 31 hours since that USDCAD level was last hit before testing it today. This plays a role because the fresher a level is, the better the chance of a bounce. A recently hit level has a higher chance of breaking. Obviously this doesn't happen every time and many times a level that's hit may hold again. But in a game of probabilities the higher your odds the higher your chance of success.

For those considering this method, here's some homework to open up your eyes:

Open up a EURJPY Monthly chart. Mark a horizontal line at the close of last months bar. Now go to the 1M time frame and look at how price approached that level today, April 5th, 2017, and watch how it reacted. What do you see?

There is also daily open within couple pips of the top

To be totally honest,as a new trader I cant unlock my brain around this,its a big ask but can someone with a bit of confidence make a video explaining this method then I'm sure the light bulb will come on then :-]

I have been looking at the OHLC levels fore a while but like nozzer find it difficult to understand at what point you pull the trigger and what candles you are looking at in relationship to the present price. What I mean is are you looking at this months, monthly weekly daily levels or or you looking left to the levels in the past near present price. I am sorry that I did not jump in quicker and that Stu has closed this he seems to know his onions. All of what he says is true. I find so much information on this site I become overwhelmed and flit from subject to subject never sticking with one strategy.
Ps nozzer what part of the uk are you from.

I am with Steve on this one,Stu be a mate and start the thread up again :-]

Took this one on usd/jpy, got horrible fill for some reason and only took 1pip

Hi inuit,

It's kind of hard to tell what you're looking at without the level labelled or any sort of chart info. What platform are you using?

First of all, I believe we are looking at the past OHLC on Monthly, Weekly, and Daily time frames, not the current month, week, or daily bars. I think Stu mentioned finding past OHLC levels around 50 pips from current price and watching price reacting to them. Nailing the reaction is the hard part.

There is no wait for a pin bar to form and then take the trade. There is no wait for an MA crossover before taking the trade. What we are talking about here is pure dancing with the flow, trying to read the underlying order flow with pure price action. It's ALL gut feel and conviction. You're basically watching current price approach the level, seeing how it is reacting at the level and taking a guess on whether it will hold or not. The edge is that because it was a key level on such a high time frame, a lot of other traders will be watching the level too and have orders stacked their and there is a better chance that the level will give a decent reaction (not always). So there's your reason why the level is important, now you just wait for a reaction at the level that can confirm the level will hold and take the trade. Once you're in, it's all about trade management. Cutting your losses while riding out your winners.

So I'm basically not giving you any entry criteria except to watch how price is reacting to a level although there's no pin bar or engulfing or whatever off of the level. I sound like a mad man. Most people will have no idea how to watch price reaction to a level. For those people I encourage them to learn how and why prices move. Here's a start. Go to my really old thread and read the microstructure basics: https://www.forexfactory.com/showthread.php?p=7957450#post7957450

That should give you some sort of understanding of what causes the price to move. Continue learning from there. Learn about order flow. Learn about liquidity. Learn further market microstructure topics. There's plenty of information online. You could also just use the basics of microstructure and watch how prices react over time in real time. Gain the charting experience which in my opinion is one of the best ways. Eventually, you'll get to a point where the price ticks themselves will give you a clue. You'll also get a sense of momentum, exhaustion, and other price behaviors that help initiate the trade.

The unfortunate part is that it's not really easy to explain what I am seeing. It's all gut feel I've gained through hours of practice and experience, and of my understanding of markets. Here's an analogy. A professional golfer isn't inside his head analyzing exactly how hard or soft to hit the golf ball at exactly what kind of angle to get it in the hole. He just does it. His mind has been trained through hours of practice and experience to know how he should hit it and he just goes with the flow. It's like that in almost any sport. Same thing with trading, I'm not analyzing everything with a set of structured rules. I've trained my mind to subconsciously know when to pull the trigger and that's what makes me a good discretionary trader. Call it a sixth sense if you will.

On G/U today 4/6/17 there was a near perfect bounce off of the daily high of March 22, 2017. Unfortunately I didn't catch this one. I did also have the daily high from April 4th plotted on the chart and here's what I saw.





Here's the reaction so far:



Now I obviously didn't catch that whole move, but whatever I did catch (~10 pips) is profits to my account and so I'm happy. I also unfortunately missed the March 22nd level, oh well. It's also better probabilities to play bounces from levels rather than trying to time the reversals. I just wanted to show that with enough experience you gain a sense of things and take some nice trades. It's just a matter of learning to go with the flow.

In case some of you might be wondering..



What if I entered on that bounce from the shaded area? If there were strong odd enhancers there and I liked the way price was reacting and took a short, normally if I didn't get out with a few pips or at least have it on BE, I'd be looking to cut the loser. There's a few ways to do this as Stu hasn't given us trade management criteria. For example, you could exited on the breach of that swing high. I think Stu uses a wider hard stop loss as an emergency stop loss to give his trades more breathing room due to the fluctuating nature of markets. But he normally cuts his trades before it gets him in trouble.

Hopefully he can further share more of what he does.

Hi fxmastersk, i try to formulate my charts better next time, im using pro realtime platform.
What you think of using preset tp orders when scalping these levels? So far i found that the initial reaction can be quite fast, faster than my fingers.