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A Guide to Creating a Minimalistic Scalping Strategy

  • #81
  • Edited 9:02am Apr 25, 2017 8:27am | Edited 9:02am
Hey guys,

Check pages 195 - 225: John J Murphy - Technical Analysis Of The Financial Markets.pdf

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There is a big chapter on Moving Averages, advantages and disadvantages. Some great examples.

This method is also described there.

Best,
  • #82
  • Apr 25, 2017 8:42am Apr 25, 2017 8:42am
Quoting Plainview
Hey guys, Check pages 195 - 225: John J Murphy - Technical Analysis Of The Financial Markets.pdf There is a big chapter on Moving Averages, advantages and disadvantages. Some great examples. This method is...
Thank You. Plainview
  • #83
  • Apr 25, 2017 11:57am Apr 25, 2017 11:57am
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Short signal appeared on the SPX just a few minutes ago.
  • #84
  • Apr 25, 2017 12:28pm Apr 25, 2017 12:28pm
guys this system is great for periods when there is no choppy action like on days before some important release from central banks holidays bank days etc... if u can somehow avoid those periods or someone has a way of not getting so many losses during the choppy market is free to share
  • #85
  • Apr 25, 2017 12:33pm Apr 25, 2017 12:33pm
Quoting ionut_blue
S/R indicator may be useful for enter/exit. {image}
Could you share your S/R indicator. it's look good!
  • #86
  • Apr 25, 2017 12:48pm Apr 25, 2017 12:48pm
Quoting jkptk
{quote} Could you share your S/R indicator. it's look good!
Download from here: https://www.fxtradingrevolution.com/...esistance.html
  • #87
  • Apr 25, 2017 2:56pm Apr 25, 2017 2:56pm
ionut_blue

Thanks for sharing.
  • #88
  • Apr 26, 2017 1:16am Apr 26, 2017 1:16am
Quoting vladutz112
guys this system is great for periods when there is no choppy action like on days before some important release from central banks holidays bank days etc... if u can somehow avoid those periods or someone has a way of not getting so many losses during the choppy market is free to share
Hey vladutz112,

Agreed. This is great system for trending market. When there is established trend you can basically grab every pip on your way up or down with this. But when it is ranging it can give you lots, and lots false signals.

Answer to this came to me from book I have mention above. It the excerpt I've published there is mention about Average Directional Index (ADX) indicator. It is used to determine when price is trending strongly. In many cases, it is the ultimate trend indicator. ADX is plotted as a single line with values ranging from a low of zero to a high of 100. ADX is non-directional; it registers trend strength whether price is trending up or down.

So, let's say, if it is boing below 25 we know it is not a trend. Anything above indicate trend. If this meets with our MA crossing than we have indication with confirmation.

This is situation from yesterday:

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And the same situation with ADX:

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Best guys!
  • #89
  • Edited 6:57am Apr 26, 2017 5:02am | Edited 6:57am
Quoting Plainview
{quote} Hey vladutz112, Agreed. This is great system for trending market. When there is established trend you can basically grab every pip on your way up or down with this. But when it is ranging it can give you lots, and lots false signals. Answer to this came to me from book I have mention above. It the excerpt I've published there is mention about Average Directional Index (ADX) indicator. It is used to determine when price is trending strongly. In many cases, it is the ultimate trend indicator. ADX is plotted as a single line with values ranging...
Sir:
1. I have updated the Pinescript to reflect the new ADX filter as you had proposed
2. However, i have also learnt that (from Dr Barry Burns, via YouTube videos) that the ADX filter should be programmed to detect if it is RISING, rather than if it has reached a certain threshold level such as 20 or 25, because it, too, is lagging, and may not reach 25 when the MA's cross over. The script checks for a rising ADX, which, obviously, can be changed to check for an absolute value if you wish

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// Define the 3MAs
study(title="Scalping with 3MA",overlay = true, shorttitle="Scalping3MA")
inp1stMA = input(12, title="1stEMA-Fastest", type=integer)
inp2ndMA = input(26, title="2ndEMA-Slow", type=integer)
inp3rdMA = input(55, title="3rdSMA", type=integer)
EMA1 = ema(close, inp1stMA)
//EMA1 = security(ticker,"1",ema(close,inp1stMA)) // This EMA is hardcoded to M1
EMA2= ema(close, inp2ndMA)
//EMA2 = security(ticker,"1",ema(close,inp2ndMA)) // This EMA is hardcoded to M1
SMA3 = sma(close, inp3rdMA)
//SMA3 = security(ticker,"1",sma(close,inp3rdMA)) // This SMA is hardcoded to M1
// Define colors for the 3 MAs
c1 = EMA1[1] > EMA1[2] ? green : EMA1[1] < EMA1[2] ? red : yellow
c2 = EMA2[1] > EMA2[2] ? green : EMA2[1] < EMA2[2] ? red : yellow
c3 = SMA3[1] > SMA3[2] ? green : SMA3[1] < SMA3[2] ? red : yellow
// Plot the 3 MAs
Plot1=plot (EMA1, color = c1, linewidth = 1, title = "1stEMA")
Plot2=plot (EMA2, color=c2, linewidth=1, title='2ndEMA')
Plot3=plot (SMA3, color = c3, linewidth=3, title="3rdSMA")
fill(Plot1,Plot2,c1,transp = 90)
// Define ADX and DI
lenDI = input(14, minval=1, title="DI Length")
lenADX = input(14, title="ADX Smoothing", minval=1, maxval=50)
up = change(high)
down = -change(low)
trur = rma(tr, lenDI)
plus = fixnan(100 * rma(up > down and up > 0 ? up : 0, lenDI) / trur)
minus = fixnan(100 * rma(down > up and down > 0 ? down : 0, lenDI) / trur)
sum = plus + minus
adx = 100 * rma(abs(plus - minus) / (sum == 0 ? 1 : sum), lenADX)
// Define bull and bear
bull = crossover(EMA1,SMA3) and adx>adx[2] // rising ADX
bear = crossunder(EMA1,SMA3) and adx>adx[2] // rising ADX
// Plot buy sell signals
plotshape(bull,"Buy",shape.labelup,location.belowbar,green,text="Long")
alertcondition(bull,"Scalping Long","Scalping Long")
plotshape(bear,"Sell",shape.labeldown,location.abovebar,red,text="Short")
alertcondition(bear,"Scalping Short", "Scalping Short")
//End of Script Scalping3MA

Dr Barry Burns, on ADX:
Inserted Video
  • #90
  • Apr 26, 2017 5:42am Apr 26, 2017 5:42am
Quoting SnoopyAKQJT
{quote} Sir: 1. I have updated the Pinescript to reflect the new ADX filter as you had proposed 2. However, i have also learnt that (from Dr Barry Burns, via YouTube videos) that the ADX filter should be programmed to detect if it is RISING, rather than if it has reached a certain level such as 20 or 25, because it, too, is lagging, and may not reach 25 when the MA's cross over. The script checks for a rising ADX, which, obviously, can be changed to check for an absolute value if you wish {image} // Define the 3MAs study(title="Scalping with 3MA",overlay...

can u attach this indicator here
  • #91
  • Apr 26, 2017 5:57am Apr 26, 2017 5:57am
Quoting nveemjay
{quote} can u attach this indicator here
It is a script, not an indicator. The script is already in the post that you quoted.
  • #92
  • Apr 26, 2017 9:29am Apr 26, 2017 9:29am
Quoting Plainview
{quote} Hey vladutz112, Agreed. This is great system for trending market. When there is established trend you can basically grab every pip on your way up or down with this. But when it is ranging it can give you lots, and lots false signals. Answer to this came to me from book I have mention above. It the excerpt I've published there is mention about Average Directional Index (ADX) indicator. It is used to determine when price is trending strongly. In many cases, it is the ultimate trend indicator. ADX is plotted as a single line with values ranging...
you need to start thinking in advance what i mean is something like "why will be no volatility? and why would be volatility?"because indicators show the past wich could change in any minute
  • #93
  • Apr 28, 2017 2:26pm Apr 28, 2017 2:26pm
what if i take trade on white dot and suddenly price moves back against me on green vertical line .. adx line (blue) above 20, red DMI- just crossed greed DMI+.. also above 20. means trend is on the move (bulls just take over). so what to do? exit trade or wait price hit stop loss (brown horizontal line) ? but as u can see price still continue its bearish trend. we can't tell. mind broken eng sry

chart is EURUSD M1 apr 28 20:50+ (broker gmt+2)
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  • #94
  • Apr 29, 2017 3:10am Apr 29, 2017 3:10am
Hi Plainview. I just wanted to say thanks for sharing your strategy. I also use a similar strategy but on the 15m time frame on the GBP pairs between 8am and 10am. My EMA's are 10, 25 and 50. I target 30pips on all except Cable which usually gives 20pips. The other strategy I use is on the D1 timeframe using 5 &10 EMA and the 100EMA for direction. I find adding the Stochastic indicator is good for confirmation of entry and exit points.
  • #95
  • Apr 29, 2017 4:27am Apr 29, 2017 4:27am
Quoting swc
Hi Plainview. I just wanted to say thanks for sharing your strategy. I also use a similar strategy but on the 15m time frame on the GBP pairs between 8am and 10am. My EMA's are 10, 25 and 50. I target 30pips on all except Cable which usually gives 20pips. The other strategy I use is on the D1 timeframe using 5 &10 EMA and the 100EMA for direction. I find adding the Stochastic indicator is good for confirmation of entry and exit points.
Hi swc,

Thanks for stopping by. Could you write us more as a feedback? Wondering how long do you trade those strategies and with what results?

As for my approach: I trade for almost four months now with rather consistent results around 340 - 400 pips a month. Which translated to daily activity would be around 20 pips. I am still not fully geared up and treat this as a indication not a mechanic system (if, then). My recent experimentation include ADX to watch trend strength.

Best,
  • #96
  • Apr 29, 2017 4:33am Apr 29, 2017 4:33am
Quoting unmaskedluke
what if i take trade on white dot and suddenly price moves back against me on green vertical line .. adx line (blue) above 20, red DMI- just crossed greed DMI+.. also above 20. means trend is on the move (bulls just take over). so what to do? exit trade or wait price hit stop loss (brown horizontal line) ? but as u can see price still continue its bearish trend. we can't tell. mind broken eng sry chart is EURUSD M1 apr 28 20:50+ (broker gmt+2) {image}
Hey,

Very good example. Once trend went your way - great. But we can see as ADX go down to 20 the trend started to range and as you see all MA goes flat. If it is flat and price hits 55-SMA from below - exit.

Pro tip:
Every second on the market is an exposure to risk. Get in, make money, get out. Do not wait. If it goes not your way - go out. Cut loses quick and let profits run.
  • #97
  • May 5, 2017 1:47pm May 5, 2017 1:47pm
Hello Plainview, thank you for sharing your trading strategy. I will start trading with it next week.

What do you think about a 200SMA? If price is below it, only sell orders. If price is above it only buy orders.

Regards
  • #98
  • May 31, 2017 3:04pm May 31, 2017 3:04pm
Quoting Plainview
Hi All, Two trades today. London open: +21 pips {image} and NY open: +13 pips {image} Done for Today.
I love days like that!
  • #99
  • May 31, 2017 7:20pm May 31, 2017 7:20pm
Quoting Plainview
Hello Traders, This my first thread in Forex Factory. I present my minimalistic strategy which brings me about 20 pips daily on average for the last three months. Forex scalping doesnt need to be complicated at all. This simple strategy with basic indicators that can be applied to low spread currency pairs. Use on the 1 min charts as indicators periods are tuned for this exact time frame. Time frame: 1 min. charts Trading sessions: London session, US session Currency pairs: Low spread (EUR/USD, USD/JPY) Indicators: 12-period Exponential Moving Average...
Thanks for sharing Plainview. I think your approach is fantastic. I will be testing this tomorrow for the first time. I'm eager to know how long you trade on average per day. You've stated you've average 20 Pips a Day for the past 3 Months. I have the following 3 questions for you:

1 - How much time do you spend trading (e.g. 15 minutes to 30 minutes a day)?
2 - Since you've found this strategy to work well for you, why not more?
3 - Do you find this strategy to be more effective at a particular time of day or trading session (e.g. Market Opening, Immediately After News Release, Anytime of Day)?

Thanks again for sharing. I wish you all the best and look forward to your response.
  • #100
  • Jun 9, 2017 2:57pm Jun 9, 2017 2:57pm
Hello guys,

i am just testing out this system. I did some backtest i want to show you my results. The logic is simple behind it, if @SnoopyAKQJT script show buy, you buy and hold it until short signal is appear. If it's appear you go short, and so on, dead simple. It not really scalping i guess. Here is my backtest about the last 5 day. I think it's not the worst, but need some improve. I try to trade this system with different tactics i will update you about the other ones. Please note the timezone is UTC+2, so London time+1. If someone can write a backtest script for this strategy on tradingview, i would be very honored. Thanks for Plainview,SnoopyAKQJT for everything. And the pictures:

2017-06-05

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2017-06-06

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2017-06-07

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2017-06-08

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2017-06-09

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