Hi - when I do it I don't use either, because they slow the mind in calculation. I recommend you trust to the greatest computer in the universe, the human mind, like a Jedi knight with a light-sword.

I watch the ticker. After 20-30 minutes, you will get a feel for it. The mind has an inbuilt ability to recognize numeric patterns and sequences.

N.B. your limit order should be entered at 1.5 times the minimum stop your broker allows. If you win 40 times in 100, you will be in profit. More than that and you are doing very well!

A trending market displays shorter cycles, so you trade faster and more successfully in one direction. In a rangebound market, the cycle frequencies expand so it takes longer and is more chop-and -change.

Here is one for you to comment on: using momentum on two timescales. You can calculate momentum as C(1)-C(n) or C(1)-O(n) if you prefer a sharper one.

Have you tried using breakout lines with mom? The first line on the faster indicator(blue/red) shows a breakout over the line, following a pullback after 5:00. The slower indicator (green/black) is still line-bound but note the indicators crossover marked by the box.

At that point, price starts to rise and eventually the slower mom breaks its line, too. But note, as the slower one peaks, the faster one registers a negative divergence (see the circles), suggesting reversal. This duly happens.

The whole sequence then begins again, as price cycles back up.

So breakout lines, crossovers and divergences are all part of the story that momentum has to tell us when trading at all timescales. Combine this with your key levels and it is a helpful tool.

Tony

Giving the recent volatility in the markets a range trading strategy would have been a losing one. However, once the dust settles, we may see pairs enter into longer term ranges. As we can see in the image attached, after the "loonie's" big move against the dollar at the end of last year, the USDCAD traded in a range for the next eight months, where a range strategy would have provided several opportunities to make money.

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__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

I'm assuming you suggest always putting the risk at the minimum so that you can achieve this risk reward?

For myself, I put in two orders each trade and set a standard stop on both defined by technical analysis. For trade management, first target equals the risk on that one lot, move the second lots stop up to B/E when the first is out and then I will either trail its stop or just let the target and hard stop go.

I like having this rigid structure; but I have also found that it is very important to work within the flexibility of what the technicals will allow - very important.

__________________
John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

Working "within" what the Technicals will allow is key indeed. One very simple yet visually effective Chart scalping method is to set your screen to a 2 minute Chart ... 1)using Candlesticks (I prefer a Black background) and then behind your Candlesticks (on the screen) you pull up a 2)"simple oscillator" and format it to straight thin lines running vertically (as opposed to the thin horizontal line) ... next you pull up (once again - on your screen) behind your Candlesticks you pull up 3)Bollinger Bands ... your Bands should have three horizontal lines ... your top and bottom lines and the "average" in the middle ... next you pull up the 4)Parabolic SAR Dots* ... these "stop and reverse" dots will appear above and then below your 2 minute Candles. Now working "within" the 5)Daily Pivot Ponts ... calculated from the previous Day's High / Low / Close ... you Trade accordingly. You can go to if you don't feel like doing the calculations manually. I'm not going to go into any more detail than this ... You can figure your own process from here. I use FXAccucharts. One more piece of info ... set the same screen up for larger Timeframes ... 30 min ... 1 Hr ... 4 Hr etc... for larger pictures of prevailing strength and weakness ... who knows ... for some this may be all that is required to take an average of 30+ pips Daily. Regards. Your trigger for entering a Trade will be the the break above or below the middle "average" line of the Bollingers with the latest Parobolic SAR Dots already on display ... indicating the next advance or decline. One other piece of info ... let's say your Trading the North American session at 9 am EST ... let the Open post ... mark the "Opening Price" on your screen ... wait for the first Hour to pass ... and you will observe the short term Trend setting up. You can get in for an average of 30+ pips or two to three Hrs ... whatever suits you for that morning. Even though the Forex Markets are 24 Hr Markets ... knowing when each of the Global sessions Open is of utmost importance because you need a place from which to "start in" order to gauge or monitor Market activity.

Interesting set up. I like how you lay out your entire strategy step by step.

I still have discretionary snafus in my trading, but I'm following along the same path to being more mechanical.

This is definitely an important habit to have especially for scalping.

__________________
John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

After a month where risk aversion has dominated price action, we may start to see price action take a more typical form making these strategies more relevant. A quick look at the EUR/USD and USD/JPY shows that over the past week the pairs have started to become more range bound.

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__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

Another Visually effective way to Trade short term is to simply pull up the "Ichimoku Kinko Hyo" Clouds indicator behind your 30 minute Trading bars or Candles (once again I prefer a Black background) and using the previous Days Pivot Points (again) you just buy above the Cloud or sell below it. Some may consider this more of a Swing Trading style. So this is a very basic yet objective way to Trade ... as you are trusting only one indicator with Pivots as confirmation. Alpari has a fairly friendly "Ichimoku" and you can get it free with a demo account (sometimes you can get it without having to go the Meta4 route). I rely on this one frequently to monitor the prevailing Trend.

I use ichimoku and some stochs and macd for my charts...... I use volume charts, 5 time frames......

Hi Kate!
Scalping is a term that goes back to pit trading at the exchanges, where the floor traders, being members, didn't have to worry about spread. After making one point, they would close the position. This was done up to 60 times a session and even the younger members found it exhausting!

With FX, I don't think precisely the same method is practicable. There is too much volatility. And why risk 25 pips to make 10, say, when the amplitude of a micro-cycle, on the yen crosses for example, is 120-160?

I prefer the method of swing trading, which is basically buy low and sell high. You can try the following:

1. Open a 5-min chart on EURJPY and put on stochastic (9-5-3) and RSI (9). I prefer to have RSI as a histogram as it is clearer to me. You can also use plain momentum as an oscillator.

2. Preparation: identify the bias over the past five hour cycle. Let us assume the direction is now up, so we will be buying not selling.

3. Signal: stochs must visit 20 or lower to start you off. This is often accompanied by RSI doing a low around 22. This is your alert. You are not trying to buy the indicator low!

4. Trigger: you must have one, or you will never enter the market! A trigger is a hard rule you always follow. I suggest a good trigger is a line on stochs at 46. If the %K moves over that line, they are buying, so you can join them. If it baulks at that level and returns lower, the cart is still pulling the horse. 46 can also act as a support level for a second surge, which is very lucrative.

Generally, because financial markets move in a compound series of half sine waves (like frogs hopping along a pathway), if the indicators visit a low, eventually they WILL get back to a high (stochs around 90 on this setup, RSI at least 65). However, you cannot just buy and sell the indicator levels - the world is not so simple.

Tips:
The higher cycle bias will predominate, so you need to check the 2-hour and 30-min charts for the status.
Don't sell in an upswing or buy in a downswing of the cycle.
Start with buying - it is a lot easier to identify a low node than a top node. Selling is a different game.

Closing a position is up to you. But I often wait for a second surge and possible negative divergence on indies. Alternatively, you may be content with 120 pips and use a limit order.

This method works in reverse for buying in a bull (prevailing larger cycle upswing) market.
But we are now in a bear market. A downcycle swing in a larger downcycle is very fast and profitable.

Change your chart from 5m to 3m, leaving RSI (9) and stochs (9,5,3) in place. However, this time you are going
to use a swing technique that was discovered by Gann. I have seen his notes for this.

On the price chart, put moving average (3)lines on the highs and on the lows. This rule is two consecutive lower lows and a close over the line.
Trigger - wait for the end of the bar to see if it is indeed closing below the line. Then you must act quickly to be quicker than the bank traders, who will also be hitting sell buttons.

In the larger picture, RSI and stochs can be helpful in setup, but they are not the trigger. Use the trigger method not the high stochs crossover.

First micro-cycle, RSI will make to 65-75 range to peak. Second time maybe 55. Third time it may only be 32. For stochs, first time reaches 85 as does the second time perhaps. But the last one you trade is likely a turndown below 50.

You have to leave most countertrend buy signals unattended or risk getting taken out very quickly. The exception is when you have completed three sells so the next buy signal is worth taking, as the start of a new micro cycle.

Usually you will be able to do a Gann swing three times in one direction, and the third occasion sees much lower turndowns on the indicators than you can make a rule for. You have to use the trigger or be sidelined.

What about the cycle timing for short-term trading? If you look at your market, you can see each of your smaller cycles lasts about 1h30m, and there are two of these in a set. The first pullback may be 50% to 76.4%.
So given the M shape of the two together, the best short sells are during the second downcycle of the set. But you should take the trigger sell of the first.


RSI below 20 often marks the end of a two-cycle set, lasting about 4 hours on the yen crosses. These cycles are within larger cycles, and so on up to years.

This week in the gbpusd thread (week of oct 19), we have been using my cycle analysis to great effect. It is Delta Phenomena type of thing using short term charts like the 5 min. It is a 28 day repeating period with market turns plotted out into the future for the trading week, with about 1.8 hours between swings on average, about 13 or 14 swings per 24 hours. I provide this freely to everyone interested. A copy of the turn points are provided on the thread so you can copy and print your own hard copy.

Actually, let me place a picture of the turn points for the week of Oct 26 here now.

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Now that the one way dollar onslaught has eased there is developing several scalping opportunities. Take the GBP/USD for example a hammer candle would show the way to over 200 pips and a historic drop in U.S. consumer confidence sparked enough risk aversion to sink the pair a 100 pips.

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__________________
John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

Hi All,
I started spreadbetting in the past month. I am out of work and looking to find the best system possible to make 30-40 pips profit each day with minimal losses. Please can someone help or advise me.

Thanks

Hi Again,
Please can someone explain the system Shaun Madden was talking about 14th/15th July 2007 on this thread. I am currently looking at candlestick charting packages. Am I looking at the wrong thing??? What is Shauns Slow Stoch Strategy

Chris