We are trying to be the most accurate in our entries. After registering you will be emailed login information, so be sure to use an email address you have access to. Your email address will not be published. First thing you need to run this system is a range bar chart.
Filters for Scalping Systems
Volume charts will draw a new bar once a user defined number of contracts traded. An example is the mini SP 10, volume chart which will draw a new bar once 10, contracts are traded.
An example might be an 18 ticks range bar chart on crude oil. If the market is moving fast, reports have come out or there is heavy volume in the market, the traditional 5 minute chart will need 5 minutes to complete the next bar before it provides you with a signal…if you have day traded futures before you know what 5 minutes can do to these markets…. The volume charts or range bar charts in this case will complete the bars MUCH faster because there is strong price action and strong volume and will be able to provide a signal faster than the time charts.
On the flip side, there are times when the market is dead…low volume, sideways, choppy action. If you are using the 3 minute chart and a moving avg. Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. It is much easier to trade, because when you have block after block, you know that price is going to the upside.
And then this is the moments of consolidation that I was talking about. Price is dropped inside a consolidation period and we have one bar moving to the upside and one bar moving to the downside, meaning that we are in a 10 pip consolidation period. And then we move to the downside, and again we have a very nice break of this down move, which can also be called a regression channel.
And then you have a new scalp for about 40 pips or so. As you can see, it is much easier to scalp a range bar chart than it is to scalp a time-based chart. And the reason is that during these regression periods before we took the second scalp, we are looking at this side of the candle.
These entire consolidation period before we move to the low s is this retraction of the 10 minute bar. And you can see that when we break to the upside, in fact we have a 48 pip win and right here we also have a 48 pip win if we calculate this movement to the top. These are the main differences between time-based charts and range-based charts.
I personally prefer to trade the range bar charts, because whenever you have a consolidation period, you will have less candles or less bars printed. And when you do have volatility in the market, you will see it by seeing brick after brick after brick.
And you can easily move your stops once this volatility encounters an area of resistance in this case and of course of support if we are short on the asset that we are trading. Practice Trading at eToro Now! Best Forex Brokers This suggestion applies not only for this system but for all day trading forex strategies. Trading outside of the 9 to 17 CET time window is not recommended for scalping or any other short-term trading strategies.
Trading right after the London and New York open tends to be more predictable. As most of the volume in the currency market is driven by banks, the times when these financial institutions open does matter.
The third busiest market opening is the Tokyo Open. We marked this open with a vertical line. Notice how prices started to move a lot smoother right after the open. What about the New York Open? The vertical line on the chart marks this market open. Right before NYO, prices were trading without any clear direction. Also notice how in both the London and the New York open examples, the further you go from the open the more trends start to become unpredictable.
This is why I recommend to try and stay in front of the screen for the first one or two hours after the market open. Since the 5 and 6 exponential moving average crossover system is a trend following trading technique, it stands to gain from filtering range bound market conditions.
And the easiest way to filter ranges is by good old price action. Setup brakeout boxes and wait for price to move outside before initiating a trade. Most of the losses due to unfiltered crossover signals occurred inside the boxes. Granted, you will have to suffer that initial loss or two before prices finally settle into the range and a brakeout box can be drawn.
Still, applying this method should lead to improved results as some of the losing trades will be filtered out. The application of this trading restriction is very simple. If prices are currently trading above the daily open, you are allowed to only initiate long positions. There are differences between traders on what constitutes as a daily open. Some like to use the most common forex daily opening time, the New York close. This is when most retail forex brokers will conduct the daily rollover.
New York closes at