Scalping system #4 (5 pips with GBP/USD)
Submitted by Edward Revy on May 20, 2007 - 07:42.
This simplified trading system derived from the previous “2 SARs to go” system and is a work of our dedicated scalper – Alex Wakemann. Thank you, Alex! His scalping insights will be published and updated on our pages as we move on. With this Forex scalping system Alex claims to always get at least 5 pips per trade.
Trading setup
Trading pair: GBP/USD
Time frame: 5 minute chart
Indicators:
MACD (5, 8, 9)
SAR on MACD (0.1, 0.11)
SAR on the chart (0.1, 0.11)
Trading rules
Trade only from 7:30 am EST to maximum 11:30 am EST. Preferred days – Tuesday to Friday.
Once both SARs are in agreement, e.g. suggest the same buy or sell opportunity – enter with either 1 order (to get 5 pips and leave the trade) or 2 orders at once (to chase the market further).
A stop loss is adjusted upon entry to the last but one SAR dot on the chart. If at the moment of the entry there is only one dot on the chart – set stop at this dot.
Profit targets – 1st – 5 pips.
2nd – only when an opposite signal appears – both SARs change direction or when the stop (by that time it is usually a profit stop or at least a break even situation) is hit.
If before that you feel that profits are already high to keep – lock them in earlier.
Now about exits:
If while keeping an open trade one SAR suggests an opposite trend, but the other does not – stay in trade.
Remember – a stop loss is always at the second nearest SAR dot on the 5 min chart.
With each new SAR dot – adjust stops for all orders to the second nearest SAR dot.
Why second? I found that very often the first SAR dot can be hit, but the second will hold. At that time I do not move my stop and sit tight until the SAR reverts and I can continue trading.
Additional notes: want even a better entry? Then open an additional 1 minute chart with the same settings and once got a signal from 5 min chart, look at 1 minute. Does the price confirms/moves in your direction or is it going the opposite way (temporarily making small corrections)? With the second option you have a time to wait until the price on 1 minute chart aligns with 5 minute chart.
Happy Forex scalping!
Edward Revy,
http://forex-strategies-revealed.com/
Copyright © Forex Strategies Revealed
Hi JS
What is your ADX settings?
Thanx
Team,
For the past 2 months (two 20 day trading cycles), with a LIVE OANDA account, I have used Alex's modified 2SAR method (5m and 1m validation) and expanded the time to include all LONDON and the LONDON/NEW YORK crossover, trading 6 major pairs (USD/JPY, EUR/USD, AUD/USD, GBP/USD, USD/CHF and USD/CAD).
Modifications:
Main screen as Alex instructed, but went with OLC instead of Candlesticks and RED (bearish)/GREEN (bullish) SAR colors
MACD screen, same for SAR color, but "blacked out" MACD indicators (shows only PSAR GREEN or RED dots)
Added ADX to ensure TRENDING (25-45) as opposed to oscillation (<20)
T/P most pairs 5pip (S/L set to 2nd to last para in a trend, per Alex's instructions), with the occasional nice trend(such as today, 30+pip LONG from LONDON on a single pair).
Results:
Trading whatever pair on a "first come, first traded" basis, as long as I have "4" of the same color SAR (5m and 1m match) and ADX is greater than 25...10-30 pip per day (2-6 hours of work) with few "losses" (less than 5 per week). Have not had a net loss week yet.
Money management:
Using "all in" methodology at 50:1 leverage, $10,000 initial investment, I am on track to essentially double base capital every 20 day cycle (assuming average is 20 pips per day). I started with $1000 first cycle, topped off to $5000. Now at $10000, just going to let it double on it's own exponentially. See where it goes.
Sharing my 2 cents as a current Business Intelligence Analyst (soon becoming a Technical Analyst) because Mr. Revy asked for real feedback in this method. I sincerely appreciate the logic from Mr. Revy and Mr. Wakemann.
Thank you,
JS
Hello,
I find this scalping trading system very interesting! I have two questions. Do you wait for the candle to close before entering the trade? What is a good guideline for the number of pips for the stop loss?
Thank you for your help!
Ian
on MT4 platform
Hi I'm newbie where can I get the SAR chart??
check out the earlier comments.. it's not always possible to put SAR on MACD, unless you use a custom indicator (also posted in the comments), or use OANDA as your broker. Good luck!
pls how can i place my parabolic SAR on my MACD
Thx for the help you are offering newbies like me.
Seth
i will try it hope it will work
Wonderful stuff!
Thank you for making it into a comprehensive Guide and EA.
We'll publish a copy here as well:
Download full ZIP: Parabolic_EA.zip
Download EA: Parabolic_SW.mq4
Download Guide: Alex_Scalping_EA_User_Guide.pdf
Happy trading!
Edward
I have coded an EA for this system - available from http://www.forexfactory.com/showthread.php?p=4983989#post4983989.
could you please send me the complete trading plan for 2 sars to go, at [email protected]. thank you, i want to replace my job! and do this full time. i want to make 75,000 a yr, is that possible, or dreaming! any way, thank you for this info, i will tell others of your site, and ideas.please send complete info, as i am a new to this,and need all the help i can get, thank you.how to set up, what software,plateform, ect, or broker would help. as you can see i need all the help i can get, thank you, your friend ed,, piphawk , god bless
NNAMDI
This system looks promising
in MT4 drag SAR indicator into MACD window. Do drag indicators, use Navigator window in MT4.
... another way is to use trading platform from oanda.
Hallow sir
i am D.M.Kumaar from INDIA.
how to put MACD with PARABOLIC SAR same window?
Sorry, I don't know, never used TICK_SAR.
Regards,
Edward
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