Scalping system #14 (EURUSD scalping with Bollinger Bands)
Submitted by User on April 15, 2010 - 16:05.
Submitted by Hessel
Currency: EUR/USD
Time Frame: 5M, 1M
Before I explain my simple scalping system, I have to thank Chelo who posted ''Scalping system #7''. I love the simplicity of the system, and it seems to work pretty well! However, I was not fully satisfied about the entry-rules and the stop loss. Prices can move up and up and up between BB 50-2 and BB 50-3.
So I thought about tuning the system up a little bit, making the entries more reliable.
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Hi,
I have been using this strategy with Oanda 30sec chart - no luck yet!
The first posts say TP 3 pips so what stop loss do i use for that??
Do you need to go with the trend?
I now realise its best on ranging market or it just keeps following bb up or down
Which time in GMT is best to use it?
Regards
Phil.
Hi Phil,
Let me quote the author:
"I don't use stop losses with this system, because (especially on 5M time frame) entries are nearly almost a success. When prices go the wrong way, I just double my bet!"
Trends: "ONLY sell when RSI is above 70 and the Full Stochastics (almost) hit the 80 line. Opposite story for a long entry!"
From myself, I'll say that time (GMT or not) doesn't matter.
This system is very similar to a system Mrs. Mayumi introduced in her book which was a best-seller in Japan. (http://www.mayumifx.com/). However, there are some differences. She adopted 20 day period of bollinger bands instead of 50. She also introduced RCI (Rank Correlation Index) which I believe effectively filters out unprofitable trades. (MT4 custom indicators for RCI are available. Most popular one is 'Spearman'.) She insists she's making 100% (doubling) profit every month.
Here is a simple scalping strategy on the one minute chart. Bollinger Bands using 21 & 2, SMA. The second indicator is RSI at the default settings. When the price penetrates the upper band and the RSI is above 70 consider entering short and exit at the center line or 3-5 pips. When the price penetrates the lower band and the RSI is below 30 consider entering long. This stategy is effective in a ranging market. If there is a trend, wait for the price to penetrate the center line indicating the trend is over before entering long or short. For confirmation, you can add Stochastics at the default settings.
Thank you for the feedback!
The scalping system has been published here for discussions:
http://forex-strategies-revealed.com/scalping/bb_rsi_range
The Spearman's Rank Correlation indicator can be downloaded here:
SpearmanRankCorr.mq4
Best regards,
Edward
Hi
This seems like a great strategy if there was a better way of determining entry points. I have been testing for a couple of days on the Eur/Usd usim 1M charts. RSI set at 75/25 and also Full Stochs at 80/20. I set at SL at 5pips and take profit at 3-5 pips. Achieving 60% success rate so far. The strategy only falls when there is a strong trend in place. then it is very hard to judge entry points and the stop ofgten gets taken out. However with a bit of practice I can see this system working and will persevere.
The easiest way to scalp is to enter with momentum and positive expectation. What I mean is that if your trade is not in profit straight away close it Now. Place hard stops of 4-5 pips just in case, but don't let them get hit. If trade goes against you get the flip out. This way you can scalp many times before you call it a day. WIth this I make on average 40 pips a day, average number of trades 200. more on my blog at tradeconscios(dot)com.
Hi Edward thanks for a good work.I'm new in forex,How to setup a pivot and fibonacy and which strategy can I USE to trade using these analysis.
Thanks
INNOCENT
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