Breaking even is very much reasonable for the average trader at this level.
Apart from that, all depends on capital, risk position etc etc etc etc....
Forex scalping
- Thread starter karsat
- Start date
Breaking even is very much reasonable for the average trader at this level.
Apart from that, all depends on capital, risk position etc etc etc etc....
I'd like to tell you scalping FX is good for 50 PIPs a day but your setup, stops, & were you take profits is totally up to you.
My advise if your new to FX is to focus on one or two techniques that work for you and master them. Here's an example, when I first started trading I focused solely on taking the BO of 10+ bars worth of tight congestion on the 1 hr chart. Its was easy enough to see on the chart, I could place my cat. stop close enough to the price action that I wouldn't get killed(stop placed on the other side of congestion), & finally this setup happened just about daily. At first, I was so anxious to take profits that once I saw 10 PIPs I'd get out. It was usually at the point I got out that the market would really start to run and I'd sit there saying what the #%@*! So after many months of promising myself today I'm going to stay in & trail my stop only to get out too soon because I was so into feeding my ego by taking profits I said enough. So I got over my ego by doing the following:
1. Enter on BO of congestion
2. Cat stop placed at opposite side of trading range
3. Stop moved to BE once hourly bar closed outside of TR and on its extreme
4. If the next hourly bar ran further establishing a new intraday trend I'd move my stop to +10 PIPs
5. Trailing stop placed just beyond 20MA on hourly chart
I couldn't believe my results. Some days I'd get out with a small profit, BE or a small loss but other days I'd see huge profits and that's when my account really started to see results.
My point is this is a simple technique which once mastered will generate nice results for you. A few more points:
1. Is this scalping? Well to me yes because most days I'd be out before the session ended but usually once or twice a week the daily bar closes on its extreme and I will hold the position into the next day and that is when the really money is made.
2. Take a look at last week's Cable/$ 1 hr chart. You will see this setup worked well on Mon, Tue & Wed and could have made you definitely a few hundred worth of PIPs
3. Do yourself a favor and don't listen to what other traders or advisory services are doing. No one knows whats going to happen next and listening to them will only cause you to lose money. The beautiful thing about this strategy is all you need to do is wait for the setup to form & act when the BO occurs. You don't need to worry about economic reports, were the Fib #'s are, overbought/oversold levels, ect. Your just watching price action which is the only thing which matters.
4. I'm not one to push an advisory service or an author but I need to tell you that when I started trading my results were marginal to say the least and after quiting my job to trade full time, I was at the point were I was quickly running out of money and finding it hard to support my family(now that was a huge blow to the old ego). Then I picked up a Joe Ross book and literally the light turned on. This guy writes about trading in a way which even a hack like me can understand so if your thinking about doing this profession seriously I can't recommend his books enough.
5. The setup I'm talking about is forming up on Cable/$ for Sunday/Monday:
Cable is trading in a narrow band between 17550 & 17500. What I'd like to see Sunday night is price to continue to trade in this narrow band. I'll be a buyer on a BO @ 17560 & a seller @ 17490 and would expect the BO to occur into the Asian fix or early Europe. Stop goes at the opposite extreme and lets see how it goes. I'm definitely adding contracts on a BO of 17650. Now my gut is Cables going higher next week but my gut usually get me into trouble so I'll resist the temptation to just blindly buy without this pattern forming up alittle more. Good luck.
karsat:
The strategy which follows is generally not what I do today because I'm trying to stay in the position as long as possible to catch the longer intraday trend but I'll describe how I would handle the Cable setup in the past:
Again, what I'd like to see is Cable to trade in this narrow band on Sunday. I've got two entry levels in mind(top of band & bottom). At some point its going to break, which side I don't know. When it does there should be some good thrust to the move because if it breaks to the downside Cable will be breaking the low of four days worth of price action and if it breaks to the upside there is a high probability Cable will go up to test 17650 which is the top of a larger trading range. My cat stop is placed at the opposite side of the congestion.
Now if you pull up a 1 minute chart as this BO is setting up you should see price congestion around the BO level which will form a 1-2-3 on the 1 minute. Upon the BO you could place your cat stop just beyond the #3 level which because of what I suspect should be thrust is a level which won't be hit. I would wait for price to congest at a new higher or lower level(depending on BO) and trail you stop just beyond each congestion level. Or you could trail you stop on a 20MA on 5 minute chart. My point is I'm quick to get my stop to BE but only once the initial thrust has occurred. This is how I would have handled this trade in the past but this is only if Cable opens inside this band, if it gaps on open I will not trade unless price comes back into this congestion and only then take the 2nd BO. Finally, there needs to be volatility of the markets so I won't trade until all the majors are moving around which is why the Europe open is probability when the BO will occur.
Why I don't just scalp a quick 10 PIP profit today is because like I mentioned in my previous post I'd be getting out literally a few minute before the next move. Also, I needed to develop the discipline to stay in the trade because many times the market will move alot further than anyone could predict. A good example was last week when Cable went to 17780's from the BO of congestion @ 17465. When I start scalping 10 PIPs for this particular technique I start to lose the discipline which has taken years to engrain.
If you look for a quick scalp and want to get back in here are two techniques:
1. If price comes back into the TR after the initial BO you could take the next BO or a higher probability trade is to trade the BO of where the initial trust stopped.
2. If price doesn't come back and you get out, trade the BO of congestion of where the initial trust stopped.
Finally, I'm always watching E/$ & $/Swissy to confirm their moving in the same directions. Lastly, Cable probably has a few stops just below 17500 which the market will try to run but there may not be much follow through. If the market hits those stops and comes back to trade through 17550 then the initial BO was false and 17550-60 is a high probility trade for 17650 & later to last week's highs around 17800. Good luck.
3rdocagt:
Cat stop is catrastrophic stop: last level price can trade to before the setup is a total bust. If price breaks out of the range I've described and it comes back into the range only to BO of the other side then something is definitely wrong. Typically if this scenerio happens I double my stop so I'm out of my orginal position and on the right side of the trade with a new position. The new cat stop is placed at the other end of the TR.
Unfortunately your going to get stopped out with a loss from time to time. So the thing to watch for is that initial thrust, it should be there and if you don't see it then start looking for an exit. We need volatility for this technique to work so Europe & NY morning sessions is were you'll see the most breakouts.
Haven'ytyou heard? He vowed to hibernate in Chat. But that only lasted 12 hours and he poked his head out....cause he got bored posting pic's.
Michael B.
Michael B.