Scalping system #9 (Trading by Psychological Levels)

Hi guys interesting strategy, i think the one hour candle should be changed to the four hour candle though, i find the one hour candles direction can change a couple of times during the hour, just a thought.

Jon

ALL YOU NEED TO TRADE IS A HORIZONTAL LINE.

Hey Patrick, I AM glad to see you spreading the word about HORIZONTAL LINES at the PSYCHOLOGICAL PRICE LEVELS.

TRO simple rules:

Plot horizontal lines at the prices ending in 00, 25, 50 and 75.

If H1 candle is green, you go long at the first line price touches.

If H1 candle is red, you go short at the first line price touches.

If you want to use the session basis, then you only take long trades

above the open and you only take short trades below the open.

- Avery aka TheRumpledOne

P.S. I am constantly updating my TRO indicators so make sure you search the net for the latest version.

Hi Mark,

Yes, you've laid it out correctly. Also note, that if the color of the 1 hour candle is the same as for the daily candle, you can look for few extra pips.
5-8 trades a day.

Regards,
Edward

More special thanks to Edward and Patrick.
Without reproducing what Anniefx has just said-some questions:

On the hour you have a look at the 5 minute and 1 hour charts.
If the price is say 1.4200(GBP) AND the 1 hour chart is green(buy) you then enter at 1.4225 looking to take 5 pips?

Stop loss of 20 pips?

5 trades a day? Thanks for the input Mark

Hi Anniefx,

From what I've read, the risk is 5%, that's correct.
Regarding the best hours, I would suggest the opening of the london session and all the way through the New York session (dropping out the last hour or two of the NY session, if already in profit for the day). Let's hear from Patrick as well.

Regards,
Edward

Special thanks to Edward and Patrick for explain this method... u r great!! this site is wonderful!!

just two questions...
1- What do u think is the best time to trade this strategy? when london and Ny r open? or just new york? or just europpean section?...
2- Ur money management as i could understand is risk 5% with 20 pips... that´s right? and take 5...

I really apreciatte ur help...

Thanks again..

Anniefx

what is this more powerful method for the people who are more advanced already?
Thanks

Thanx edward because of the language barrier you can say it much better then myself.
It still is one of the most powerfull methods out there.
I just know 1 method that is more powerfull but you need to know more about trading. This method is for later.
I suggest to every new trader learn to take those 5 pips the rest comes later. For every newbie who can follow this method it is easy to take 5 pip. If you can catch 5 trades a day and use my MM then you make a lot of money in just 2 years. Don't get greedy take your time it will pay off, believe me. There was a time (2years) i was searching on this side to find the best method for me. Now i'm trading 5 figures each month. Never give up on trading but you need to met the right people to teach you. I've been teached, now i'm ready to teach you.

Levels 00, 25, 50, 75, 00 are called "psychological levels", because traders would usually choose those levels to place stops and/or limits at. It seems logical, you won't look to set a trading order at some unusual number, like 34, 67, 81...

For example, if you were looking to choose a stop level of around 100 pips for EUR/USD (buy order) which is now trading at 1.2873, what number would you normally type in? I guess it would be something like 1.2775 or 1.2770. You would naturally go for round numbers, convenient numbers. These round numbers are psychological levels, easy levels, common levels. If you were to avoid those levels, you would set a stop at some 1.2778 or at 1.2782 level.

By knowing about those psychological levels in trading, you can take benefit from trading around them.
The most powerful psychological levels are 50 and 00 levels. (From the previous example with EUR/USD these would be 1.2750, 1.2800, 1.2850 and so on). If you look to place a trading stop, you should try to avoid those levels, instead look to place a stop few pips further away, behind the psychological levels, in order to stand a fair chance for a trade to prove that it was a losing trade, and you were not taken out by the momentum that swept you order away around the well known psychological level.
If you are, on the other hand, looking to take profits from a winning trade, try to squeeze your Take Profit order 3-4 pips earlier than the next coming powerful psychological level. This 3-4 pips sacrifice will make sure you get a reward before the market reacts on a new round number and makes a u-turn.

Regards,
Edward

If you don't know what those levels are then you have a lot of reading to go!! Try to attach the indicators and figure out what it is. Watch the screenshot.
Do you SEE the lines --> levels ;-)
Now you understand, your welcome.

what is "level" and 00-25-50-75-00?

can you explain more pls..

thanks..

For those who have problems with settings for the sweet spots of gold. Go to the indicators list click on sweet spots take the input tab and change sublevels from 25 to 250 now your screen will be much better. This is because that indicator is written before the 5 digits on MT4

PS. This method can used on every pair you want!

First of all this is a scalping method. A lot of great traders use only psychological levels. These are random numbers 00-25-50-75-00. You don't trade the bounce, you only go with the same H1 color. If H1 green get ready to buy on the next level or vice versa!
There is no take profit, you grab what you can. When you feel confident with this method you can trade from level to level. You only need 2% daily to get rich. Why don't take 10 pips if your target is 30 pips away and your SL is at 50. I would have taken the 10 instead of the -50. That's called money management.
Tip: Watch out on the third and fourth level. At these levels price will turn very often.
One of the indicators "sweet spots of gold" plot the levels auto. The point of this method is: You don't need indicators they are all lagging. Trade what you see.

Price levels ending on 00-25-50-75-00.
For example, 1.2300, 1.2335, 1.2350 etc.