Scalping system #7 (Great GBP/JPY 1M scalping strategy)

Thank you Edward.

Ive been using an Alpari UK live feed and I would hope that they would not risk stop hunting in fear of action from the FSA.

Do you have any recommendations what needs to be done to check the market to see if conditions are favourable. i.e.

Not too close to news
Not near S/R levels

What else could we check prior to placing a trade that follows this system?

Thank you

Lee

Hi Lee,

The first cause of whipsaws often comes from major news announcements. If you're caught trading small time frames during news time you may get whipsawed very easily.

The other cause of whipsaws could be trading near major support/resistance levels. The strength of the level will determine the amount of force the price will be thrown towards and from it in case it attempts to cross the level. Chaotic up and down moves would again shake up all small time frame traders.

Well, in the worst case scenario, a dealing desk broker himself can detect unwanted trading style of any particular trader and then literally create a whipsaw situation for him with the purpose of taking out trader's stop. In such case, if you suspect an unfair whipsaw, try to check the charts form other brokers. Upon result, change a broker if needed.

Regards,
Edward

Take only the smallest. For the EUR / USD and USD / CHF 65 pips use in a time of 8 minutes and is hitting at the ends of the Bollinger of 50.3 make the reverse operation. For the USD / JPY use 40 pips in 8 minutes. With this is getting the Spikes of time. A hug to everyone. Rogerio Maia. forex.brito @ gmail.com

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Peguem somente as esticadas. Para o eur/usd e usd/chf use 65 pips em um tempo de 8 minutos e se bater nas extremidades do bollinger de 50,3 faça a operaçao inversa. Para o usd/jpy use 40 pips em 8 minutos. Com isto está pegando os spikes de tempo. Um abraço a todos. Rogério Maia.

Thank you Edward.

I have found with this system that I only ever trade when the first BB is at least 40 pips away from the EMA. This gives me enough space to collect over 10 pips letting emotions get in the way. In some cases I have added a trailing stop and just let it run as far as it can.

With regards volatility, A particular problem was more the whipsawing of the market. The price did behave as we expected in the end ( i.e- there was a reversal that did generate pips ) - but it was too risky to leave some of the trades open. - the scare factor was too high.

Could you give me some insight in to the cause of whipsawing - and how to avoid or prepare for them.

Thank you

Lee

Hello Lee,

Volatility can be measured by next indicators:

Bollinger bands - while bands are widening, volatility rises; on the contrary, very narrow bands indicate no volatility.

ATR - Average True Range indicator - when rising, it suggests a rise in volatility. Average true range is commonly used to determine a place for a trailing stop based on market volatility and price true range.

Also there is such indicator as Chaikin volatility.
High values indicate that there has been significant changes/shifts in price during certain time period (the time frame you trade). Low values indicate that price is staying relatively constant.

A bounce off BB is a bounce when:
- in an uptrend a bar#1 touches BB for the first time, and the following bar#2 closes below the first bar OR, if bar#2 is shy from closing below bar#1, then the next bar#3 should finalize it by closing below bar#1.
- opposite for downtrend: we should get a touch of BB followed by the close above the bar that touched BBands.

Kind regards,
Edward

Ive had great success with this in the past 3 weeks - until this week that is.

- Im still happy with it though. Its just practice - and avoiding greed that I need to work on.

What indicator would be used to calculate the level of volatility in a pair? Like today for example Ive been stopped out on a number of occasions when really I should have just logged out.

Also - When is a bounce a bounce? 2 closed candles off the BB?

Lee

Anyone knows Super Signal, I think it it is a good filter for the system

Well, it is obvious that the strategy won't work during good trends - the price will simply follow alongside the Bollinger band rather than bouncing away from it.

the initial screenshot on the main page perfectly illustrates the point - profitable trading was taking place during ranging market.

Let's not give up on it. We simply need one good filter, which I'll be looking for.

Also answering your question, I didn't trade the system consistently to confirm the results, only tried. I often don't have time for scalping.

Kind regards,
Edward

Looks like this thread is in a death spiral.... :-(

Well I haven't been successful with this strategy, if I try to buy retracements most of the time the price just continues in the direction along the bbands without reverting to the mean and the bbands simply expand.

I tried to incorporate the laguerrere indicator on the 5min time frame but this doesn't seem to work either, if I try to trade in the direction of the laguerre indicator in the 5min time frame the price never even reaches the bollinger bands.
If the 5 min lagurre has just crossed above 0.15 I find the price never even reaches the bottom bb let alone bounce of it, so I don't have a buy point.

Maybe I'm doing something wrong?

Has anyone else been successful with this strategy? Edward? Chelo? Anyone else?

Can some please point me to a strategy that works ...... I'm reaching the end of my tether ...... dunno what to do?

Cheo thanks you very much for sharing your strategy and thanks to Edward for tweaking it and taking the time out to create this this wonderful site.

I hope someone experienced can tell us what the live results have been like as an inspiration for the rest of us who are practicing this strategy.

Anyway thanks again everybody!!

better than sending questions through email, is to post them here. as my teacher in high school said: you are probably not the only one with that question... the purpose of the forum is to share q & a's. i am glad you liked this strategy

Chelo

hi
me mido
it is the best strategy i ever learned,and the way of describing it is simple and any one can get it quickly,
thanks very very lot chelo,and i would like to ask u some questions if u can send me ur email
ur the best

DOES ANYONE USE THIS STRAT WITH LIVE ACCOUNT. WHAT IS LONG TERM PERFORMANCES

Hi Jim,
All the best in your learning and trading!
There is no summary form Chelo yet. Writing such summaries isn't everyones' favorite :). May be someone else here can offer a help, otherwise I'll come back later to make my own review.

Regards,
Edward