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Thread: Channel Scalper Modification

  1. #1
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    Default Channel Scalper Modification

    Funyoo/All;

    I've been manually trading the Channel Scalper and have been using a general rule which has been fairly successful. You use the Channel Scalper template with the two Moving Averages, but you add two (2) additional indicators.

    1. Bollinger Bands - Period = 20; Shift = 0; Deviations = 2

    2. Stochastic Indicator - %K Period = 12; Slowing = 3; %D Period = 3; Price Field = Low/High; MA Method = Simple; Levels at 80 and 20

    3. Template is using Candlestick Charting

    4. UPDATE TO STRATEGY 04-28-14: MAKE SURE THAT THE DISTANCE BETWEEN THE TOP AND BOTTOM BOLLINGER BANDS IS AT LEAST 10 PIPS. DO NOT TAKE THE TRADE IF THE BOLLINGER BANDS ARE NOT AT LEAST 10 PIPS APART!!! Also, you will have to adjust this for the higher timeframes. If you move to a 15-minute chart, make sure the bands are at least 15 pips apart. If you move to the 30-minute chart, make sure the bands are at least 20 pips apart. It improves your chance for profit if you just want a set profit target. You could always wait until the price touches the other side of the bands, but that doesn't always end up in good, consistent profit.

    5. UPDATE TO STRATEGY 04-28-14:

    a. For a BUY signal, a RED candle closes below the bottom bollinger band. The next candle would be a green candle and would open below the bottom bollinger band. All of the rules above would apply as well. Make sure that price is touching or below the Stochastic 20 line.

    b. For a SELL signal, a GREEN candle closes above the top bollinger band. The next candle would be a red candle and would open above the top bollinger band. All of the rules above would apply as well. Make sure that price is touching or above the Stochastic 80 line.

    6. PROFIT TARGET: 5 pips on 5-minute chart. 10 pips on a 15-minute chart. 15 pips on a 30-minute chart. You're basically adding 5 pips of profit for each higher timeframe.

    See updated pic below...

    It would be great to code an EA that works this way.

    THE PICTURE BELOW IS A MORE AGGRESSIVE EXAMPLE OF THE PROCESS AND DOESN'T FOLLOW THE 10 PIP DISTANCE RULE. IT WAS THE FIRST PICTURE I PUT UP. I HAVE SINCE AMENDED THE STRATEGY.

    TRayD
    Attached Images Attached Images Channel Scalper Modification-eurusdm5-png 
    Last edited by trayd; 04-29-2014 at 16:09. Reason: UPDATED STRATEGY

  2. #2
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    BTW, if you have the ability to enter both buy and sell trades at the same time, it is a definite plus. This way, if you get negative on a certain trade, you still have the ability to continue buying and selling. Two Brokers I recommend for this are FXGlory and FXChoice. They DO take American clients...
    Last edited by trayd; 04-29-2014 at 02:42. Reason: Added Brokers

  3. #3
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    The Candlestick Indicator is from Don Steinitz. You DON'T have to have it to make profitable trades. It's on my chart because I had it loaded at the time I took the screenshot. I believe Don charges about $50 bucks for it. I like it because it's an extra layer of confirmation.
    Last edited by trayd; 04-29-2014 at 02:44. Reason: Comments on Steinitz

  4. #4
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    This guy on YouTube from UrbanForex has the same idea... But, I think he trades it on the 15 minute chart. Take a look...

    Urban Forex 10 Pips Per Day Scalping Strategy - YouTube

  5. #5
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    Here is a screenshot of testing I've done over the past two weeks on a $300 live account. This was just me trading off and on whenever I had time. I was not sitting in front of my computer day and night looking for trades. If I had a robot to do the trading for me, there would have been more trades. Let me add, too, that I did NOT use a stoploss on any of these trades. I manually traded and was looking for 4 to 10 pips on each trade, depending on how volatile the market was at the time, and the spread of the Bollinger Bands. Let me know if anyone can help code this, or modify the Channel Scalper that Funyoo has to reflect these trading rules.

    I HAVE SINCE AMENDED THIS PROFIT TARGET SO THAT I TRY FOR 5 PIPS ON EVERY TRADE. DEPENDING ON WHAT YOUR SPREAD IS WITH YOUR BROKER, YOU MAY HAVE TO ADJUST THIS UP OR DOWN. IT SEEMS TO BE WORKING FOR ME. AND, WITH THE AVAILABILITY OF HEDGING, I CAN ALWAYS PLACE A TRADE IN THE OPPOSITE DIRECTION.

    Channel Scalper Modification-last-two-weeks-in-april-2014-png
    Last edited by trayd; 04-29-2014 at 02:46. Reason: updated comments

  6. #6
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    SEE THE UPDATE TO MY STRATEGY ABOVE. LINE 4 IN THE FIRST POST.
    THANKS!

    TRayD

  7. #7

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    Quote Originally Posted by trayd View Post
    Pic for today...

    Attachment 28385
    Link not working

  8. #8
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    Here is a screenshot for today...

    Channel Scalper Modification-eurusdm5-04-28-14-png

  9. #9
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    Just closed out this trade I made earlier this morning... Re-entered another trade about 10 minutes later... NOTE: Make sure, as I mention above, you measure the distance between the two Bollinger Bands. The trade I just took had a signal about 10 minutes prior to this one, but I didn't take it because the Bollinger Bands were too close together.

    Channel Scalper Modification-eurusdm5-04-29-14-jpg

  10. #10
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    Another update for today... A continuation of what I was doing last night. I placed one SELL trade, but it didn't close out right away. A couple of hours later there was another SELL trade signal. I took the trade. However, I did NOT measure the distance between the Bands... It was NOT 10 PIPS. I broke my own rules... BAD!!!!... Luckily, it worked out in my favor. As soon as the Euro opened, the currency dropped and I was closed out on both trades. A BUY signal appeared about 10 minutes later, which I took. A few minutes after that, the London session opened and the currency jumped back up and closed me out of that trade. So, about 20 PIPS overall for the day. US Markets opened a couple of hours ago... I may jump in there if I see a signal. There was one about an hour and a half ago, but I wasn't awake yet. Let me know if anyone has any questions.

    Channel Scalper Modification-eurusdm5-04-29-14-part-2-jpg
    Last edited by trayd; 04-29-2014 at 15:22. Reason: Added more comments...

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