Is it possible to scalp and make a living in the markets?
Have you ever heard of Paul Rotter? Well he was an independent trader who was raking in 7 million/month scalping.
Read this interview with the infamous Paul Rotter and let me know what you think.
So it is a trend day and you were not awake when the trend started. Where do you jump in???
CCI to the rescue!
I have developed a simple system that utilizes CCI divergence, TMA bands and 13 pip range bars to trade pullbacks, allowing you to enter trades in the direction of the trend.
On the chart 1) is a bullish CCI divergence.
2) Confirmation of the trend/trade direction
3) Entry signal – piercing of TMA bands.
It is important to wait fot the the TMA bands to be pierced. If they are not pierced, then no trade.
To keep this a low risk trade – use a 6 pip stop and target at least 12 pips.
Looking at a market profile view of the GBPUSD you will immediately notice that price has been trading in a range smaller than the single range of last Friday.
The double inside day usually means when we do break out of the existing range, we could be in for some pretty big moves.
It is also of interest that today’s high was right at Friday’s VIRGIN POC and with 30 minute tweezers. That first time virgin bounce was good for about 50 pips, but never made it down to the virgin created yesterday at 1.5431. That with todays action created a virgin at 1.5479 creates a nice trading range between the two virgins
I think virgin POC’s are good complimentary indicators so look for whatever system you use to give entries around 1.5431 and 1.5479.
Trade well.
First, if you don’t know what I’m talking about when I say “Quarter Levels” then you need to go over to my good buddy Mongolians thread on Forex Factory. The thread is “Make Money Everyday: A Guide To Short Term Trading” – brilliant concept.
I have incorporated the quarter levels into my trading and am amazed at how price respects these psychological support and resistance levels. Mongolian advises in his thread to just use the levels to scalp 12 pips all day long, which I have done and I must report is very doable. However, I never being settled, have been tinkering with a way to stay in trades longer…so I have been toying with a few indicators to the pure price action method Mongolian uses.
I have been playing with a system called “Forex Gold H1″ on a 5 minute chart. I have not tested it out with cold hard cash so I cannot offer you anything other than my observations.
Thus far, it seems pretty promising.
Just a couple of examples. In the first one during the London session price actually dropped about 80 pips from the pivot. I am a scalper so I only collected 5.
In the second image, you had to be quick as only 8 pips were offered. I have a take profit of 5 for this trade so it worked out well for me.
Drum roll please…..
Really there is nothing earth shattering here. I was talking to a trading buddy of mine and recalled my most profitable trades were done using 4 hour pivot points and… oh yeah thats it!
The strategy is so simple that many will just brush it aside, but give it a try and you will see how profitable it can be with minimal risk. All you do is pull up a naked chart – any time frame you like (or this example I used 1 minute) and plot the 4 hr pivot points. You can do this
in a spreadsheet, by hand or using an indicator (send me a message if you need help here). Once plotted, enter your trades. We will be fading the market so for short entries enter a limit sell 1 pip below the upper pivot and for long entries enter 1 pip above the lower pivot. For example in the chart to the right R1 is 1.3833 so your order should be to sell at 1.3832. Set a stop that you can live with and take your profit after a 5 – 12 pip bounce.
There are instances when you can hold this for a swing trade, but that requires a little more homework and risk so i’ll table that for another day.
In my opinion pivot points are not magic lines but rather levels that so many traders use that they become self fulfilling levels of action. At the end of the day I could care less, I just want to see green on the last line of my brokerage statement and I hope you fell the same.
The key to this technique is to get comfortable with it and add size as you see how predictable the market is around pivot levels.
Give it a try and please comment on how it works.
A little late this morning, and currently the Euro is surging, although I wouldn’t get to excited as there is a serious zone of resistance from 1.3660 - 1.3680 capped with a virgin POC at 1.3680.
Trading range: 1.3470 – 1.3680 (don’t be too shocked if we hit 3700)
Well – thanks to the Fed, we are finally out of the trading range we have been stuck in for the past few weeks. And while there are several resistance levels above – there is a lot of thin air below. No range that I can identify so I will be employing a scalp and run – SHORT ONLY – technique today.
Not much to say – we are in a range that most likely will not be breached until the Fed announcement later today.
Same trading range as the past 3 sessions 1.3590 – 1.3792
Yesterdays low was within 2-3 pips of our trading range low, making for a pretty low risk long entry.
Price action is still a little choppy, but trading above the daily pivot so I have a slight bas for the long side today, at least till we hit the virgin sitting at 1.3792.
Todays range – same as yesterday: 1.3590 – 1.3792