MPE - Momentum, Pullback, Engulf | Forex Factory

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MPE - Momentum, Pullback, Engulf

  • #1
  • First Post: Jun 7, 2017 9:38pm Jun 7, 2017 9:38pm



MPE

Momentum, Pullback, Engulf





Hello to all,

I am going to share with you my scalping system. Its very simple and kind of similar to my 45mom system but much simpler. The basic concept is taking trades of the pullback from current momentum.

I use the minute chart, Macd and Engulf pattern.

Entry:
When price gains bullish/bearish momentum by stretching the Macd bars far enough, then wait for pullback, once the PB occurs then look for the first Engulf candle as an entry point, thats it.
(Important point; Your Engulf entry point must be inside Macds momentum direction.)

Exit:
Up to you!!... Ideally getting 10 pips is a good target. You can take less or more based on what you see off the PA.

Risk control:
You can set your stop right above or below the PB end point, which usually is between 4 to seven pips. Your RR would be 1:1 at worst in most cases.
Advance level would be having NO Stops by looking to give the trade time and extra chances to fall into profit for you and avoiding premature exit loss. If it goes against you by totally shifting the other way then you look to exit off the PB for lower damage. I know this part raises issues but trust me its the better way to trade and better results in the long run.

Best time to trade is London first a few hours and the u.s overlap... but anytime that you see a good solid momo move its good to go.

Trade small, look for best patterns on multiple crosses and repeat the same thing over and over again.
  • #2
  • Jun 7, 2017 9:41pm Jun 7, 2017 9:41pm
Chart example for clarity.
This was a great trade opportunity earlier today on Eur/Usd.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDproM1.png Size: 74 KB
  • #3
  • Jun 7, 2017 9:54pm Jun 7, 2017 9:54pm
gbp/usd today.
This is why I don't use stops, more often the not it hits your stop and moves into profit.
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDproM1.png Size: 73 KB
  • #4
  • Edited 3:32am Jun 8, 2017 3:21am | Edited 3:32am
Quoting fx-Tycoon
gbp/usd today. This is why I don't use stops, more often the not it hits your stop and moves into profit. {image}

Hi Fx-Tycoon, glad to see you again. I followed your first thread and I learned a lot, so first of all thank you.
What you presented is a classical scheme that I don't why is not common in this forum, and works in every timeframe, provided that ranges are different (higher TF means higher SL and TP but with a very good RR, 4 to 1 and better). I don't use the MACD but Fibo retracement. I'm not a Fibo fan, just want to see a retracement that touches at least the 38.2 Fibo and at that point I consider the pullback valid to look for an engulf.

I don't know if it's just a coincidence but, in the GU example you posted, this filter would have kept you out of the trade to eventually enter a few minutes later, and avoiding the DD and the SL issue (I don't like not to have a SL).
  • #5
  • Jun 8, 2017 3:24am Jun 8, 2017 3:24am
Subscribed!
  • #6
  • Edited 4:07am Jun 8, 2017 3:31am | Edited 4:07am
Quoting fx-Tycoon
gbp/usd today. This is why I don't use stops, more often the not it hits your stop and moves into profit. {image}

Hi fx-Tycoon, good of you to share your system, interested me as I trade a very similar concept of momentum scalping though I don't bother about MACD or the necessity of an engulfing candle, just eyeball the pullback reversing and the trend resuming.

The only thing I can't do is trade without stops. You are right that stops degrade performance by taking you out of trades that then go your way, but this comes at a cost: you have to trade smaller to allow a substantial reversal against you and, more importantly, you run the risk of getting wiped if it keeps going the wrong way and your discretionary position cutting discipline deserts you. I much prefer a tight stop beyond the pullback extreme, trade larger, have the potential of an excellent reward:risk trade if it does explode my way, and simply accept a lower success rate; I only want c.55% for my system to work nicely and the kind of setup you describe does deliver this over the long haul.

Other thing I'd say is that if you are right in saying more often than not a trade hits the tight stop then goes your way, why not simply modify the entry to take it off the second pullback, not the first? I do this very often as the double failure of the pullback sets up a higher probability trade and gives you a nice tight stop point defined by the market
  • #7
  • Jun 8, 2017 1:17pm Jun 8, 2017 1:17pm
Quoting L.m
{quote} Hi Fx-Tycoon, glad to see you again. I followed your first thread and I learned a lot, so first of all thank you. What you presented is a classical scheme that I don't why is not common in this forum, and works in every timeframe, provided that ranges are different (higher TF means higher SL and TP but with a very good RR, 4 to 1 and better). I don't use the MACD but Fibo retracement. I'm not a Fibo fan, just want to see a retracement that touches at least the 38.2 Fibo and at that point I consider the pullback valid to look for an engulf....
Thanks for your reply and you're most welcome.
Your fibo would perhaps work in this particular example and won't in other times just the nature of any filter its always give and take. Minute tf is too noisy in order for me to have filters that's where i come on this.
Cheers.
  • #8
  • Jun 8, 2017 1:57pm Jun 8, 2017 1:57pm
Thanks FX T.
I love price action trading, and this qualifies for certain.

One comment, the GU trade you show above, could have been a quick win if one waited until the engulfing bar was breached.
Or better yet, there were 2 more engulfing bars @ :25 & :26 past the hour. An entry @ either of those could have been a 10p win. I can't tell if your macd was still above it's 0 line. Your chart colors are very hard to pick up contrast.

Thanks,
Darryl
  • #9
  • Jun 8, 2017 2:08pm Jun 8, 2017 2:08pm
Quoting marcmarc
{quote} Hi fx-Tycoon, good of you to share your system, interested me as I trade a very similar concept of momentum scalping though I don't bother about MACD or the necessity of an engulfing candle, just eyeball the pullback reversing and the trend resuming. The only thing I can't do is trade without stops. You are right that stops degrade performance by taking you out of trades that then go your way, but this comes at a cost: you have to trade smaller to allow a substantial reversal against you and, more importantly, you run the risk of getting...
Thanks for your reply, well thought out points.
Macd to see the momo in one quick glance when watching multi crosses.
Betting small is actually a favor and not a cost that any trader can do for oneself... Amping the capitol will result in satisfying profit when betting small, that takes care of that problem verses having tight stops which is prone to be hit one way or another in this market.. Or not letting your trade and game plan to play itself out.
About entry modification... Look, lets be honest no matter how much tweaking and maneuvering one can input in the end it will lead to some misopportunities or etc, which will lead a trader to to be perfecting a entry ones entire life.
No stop has also its own problem what i see is that i will have trades that will run into big profit and i will have some loss trades that i have to eventually close it for large negative, i figure they wipe each other out give and take.. But the mediocre normal gains is what will make the difference which i will not let it to be prematurely exit me for loss.. I either break even or win on most of those... Overall i should come ahead.
This is all MHO based on experience.
Thanks for your reply once again and i hope i answered your questions or concerns.
  • #10
  • Jun 8, 2017 2:09pm Jun 8, 2017 2:09pm
subscribe...
  • #11
  • Jun 8, 2017 2:19pm Jun 8, 2017 2:19pm
Quoting diamonddbw
Thanks FX T. I love price action trading, and this qualifies for certain. One comment, the GU trade you show above, could have been a quick win if one waited until the engulfing bar was breached. Or better yet, there were 2 more engulfing bars @ :25 & :26 past the hour. An entry @ either of those could have been a 10p win. I can't tell if your macd was still above it's 0 line. Your chart colors are very hard to pick up contrast. Thanks, Darryl
Thanks diamond
It very well could be, basically you want to get in when you spot a good one for a possible resume before watching opportunity passes you by.
I hate to miss any chances.
Thanks for your reply.
  • #12
  • Jun 8, 2017 4:00pm Jun 8, 2017 4:00pm
Quoting fx-Tycoon
{quote} Thanks for your reply and you're most welcome. Your fibo would perhaps work in this particular example and won't in other times just the nature of any filter its always give and take. Minute tf is too noisy in order for me to have filters that's where i come on this. Cheers.
You're absolutely right, when you filter there's no way to avoid filtering some good trades. Personal preferences, just like the SL. I prefer to have small losses even if the price turns back in my direction after hitting the SL. As long as the balance is on the right side is all good.
  • #13
  • Jun 9, 2017 1:17am Jun 9, 2017 1:17am
e/g perfect setup and solid result just about an hour ago..
Attached Image (click to enlarge)
Click to Enlarge Name: EURGBPproM1.png Size: 55 KB
  • #14
  • Jun 9, 2017 1:22am Jun 9, 2017 1:22am
G/U same..
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDproM1.png Size: 59 KB
  • #15
  • Jun 9, 2017 1:57am Jun 9, 2017 1:57am
There were some messy ones too... I make e/u as an example with explanation:

The first entry is a off of a weak swing which I probably would not have take it based on my experience but if I had as you see it would have not gone into profit and would have definitely hit the tight stop. The way I would have end is to make a exit decision for modest loss right around where i drew the eclipse.. I know still is loss but it is on my term when I see fit to exit.
The 2nd entry off of a rather stronger swing (breaking out of the range) but similar situation after a modest gain it shot up to grab the tight stop ( the X mark) and resume for a solid profit
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDproM1.png Size: 54 KB
  • #16
  • Jun 9, 2017 2:17am Jun 9, 2017 2:17am
I just took this G/U trade.. its a live one..
Attached Image (click to enlarge)
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  • #17
  • Jun 9, 2017 2:29am Jun 9, 2017 2:29am
Quoting fx-Tycoon
I just took this G/U trade.. its a live one.. {image}
Ok out for +26... its a like a dream trade. I wish they all were like that.
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDproM1.png Size: 58 KB
  • #18
  • Jun 9, 2017 2:47am Jun 9, 2017 2:47am
which pairs do you trade the most with this?
Everyday better.
  • #19
  • Jun 9, 2017 2:52am Jun 9, 2017 2:52am
Quoting arlucad
which pairs do you trade the most with this?
Thanks for your reply.
I watch over about 12 crosses, which ever one gives the most crisp setup I take that one.. so who knows one month could be e/u another g/u or... however I pay more attention to the 6 major crosses preferably I like to trade those just for the sake of a more controlled volatility when trade goes against me its more manageable.

Cheers
  • #20
  • Jun 9, 2017 2:56am Jun 9, 2017 2:56am
So you watch 12 pairs on 1 minute chart the whole time? but trade 6. i think 6 is really alot when a engulfing forms on m1 it can go really fast imo

do you set pendings or how do you manage that?
Everyday better.
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