On an intraday trade or scalp as it is
This article - the result of years of observations, the author's personal experience when trading in the market FOREX. This article was prepared specifically for the magazine "Foreign currency speculator."
This paper describes a new system of intraday trading. The system is based on the use of traditional indicators and their combination. Although the system and is recommended for traders with minimum deposit or dealing with a little experience, it can be successfully used to obtain a fairly substantial profits and knowledgeable investors. Following the intra-day trading system, it is possible with a high degree of accuracy to find the entry point at the conclusion of transactions and exit point at the closing of contracts in the market FOREX. This method of trading in the first place affect the interests of those investors who do not have enough initial capital, but have a great desire to try his hand at the market FOREX.
During the initial period of operation - a year and a half - a trader needs to develop (at least in the "raw") trade strategy. I am sure it does not require any special mental abilities, but only on observation, perseverance and self-control, which, incidentally, allows traders (especially with a small deductible) does not lose the original capital.
For those who want to try your hand at this particular activity, the proposed method of making ready for the opening and closing positions. New equipment intraday trading came from years of experience working with various financial instruments. By using this trading system can make a profit on the deals are much more frequent than losses.
Goals and objectives of the method
Let us consider some important points that were included in the framework of the trading system "Technique intraday trading." This system makes it possible to trade intraday trader as accurately as possible to find an entry point at the conclusion of transactions and exit point at the closing of contracts in the market FOREX.
This trading system can work with relatively small deposits ($ 1,000-2,000), and its compliance with impeccable, guarantee a stable income with minimal losses. This assumes acceptance of key decisions on the 5 - and 1-minute chart, of course, with a preliminary analysis of all previous time schedules, starting with the day. Analysis of the weekly and monthly schedules for this method is not required. This trading system is very rigid and requires the trader to an equal degree of patience, perseverance, discipline and much higher concentration.
The indicators used
In the trading system "Technique intraday trading" uses the following indicators. The system of "Parabolic" (hereinafter Parabolic) with periods of 0.02. Parabolic basically gives the true signals when the trend and often false alarms during the lateral movement of prices. Simple Moving Average (hereinafter CC) with a period of 4, 9, 18 and 65 - allow signals to the "golden cross", "dead cross". The first three SS can determine the horizontal movement or trend in the price chart. CC with a period of 65 - the trend in intraday trading. MACD with average values of the exponential 12, 26, 9 to determine the beginning of the sale or purchase, the closing of open positions, as well as divergence and convergence. RSI with period 9 determines priority, shows oversold / overbought signals gives divergence and convergence. Stochastic Slow (hereinafter S.Stochastic) with a period of 14 indicates oversold / overbought, determines the purchase or sale, as well as divergence and convergence. DMI with a period of 7, being filtered SAR to confirm or refute his testimony.
We examine here are a few guidelines.
A. At all timeframes (beginning and ending with the day 5-min) is considered the location of the SAR. In this case it is necessary that in all graphs Parabolic was on one side of the price (or just above, in this case it is necessary to open short positions, or just below, in this case, you need to open long positions). Allowed a 5-minute chart the location of the SAR on the opposite side of all the above. However, in this case, technical analysis candlestick of this time period should definitely talk about the beginning of their movement in the direction of the SAR.
If the location of the SAR on the daily chart is different from all others, the daily chart is excluded from the analysis - as well as weekly and monthly. But in this case the trader should always remember that a range of gaming in this context can be much shorter (although it is sufficiently long to extract some profit). Two. Build a line of support and resistance trend line. If necessary (for 60 -, 15-minute charts) to determine whether there was a trend line break, and what it is - true or false.
Three. Between the SAR and the price (candles) are SS with periods of 4, 9 and 18. While between the SAR and the candles are 18 SS-period, the Parabolic SAR is as if under the "protection". As soon as the Parabolic "dive" under the SS, or the candlestick rise of the movement (at the location of the SAR at the top), or fall under the motion (at the location of the SAR from the bottom), it is considered that the Parabolic out from under "protection". In this case, the trader must be prepared for the fact that the candles will be pulled to the Parabolic SAR and "proshyut" his shadow or body. In other words, the Parabolic SAR will be "blocked", which means that it pops up on the other candles, and price, respectively, will go in the opposite direction. It is for moments such trader can determine the future of the end of the price movement by analyzing the 1-15-minute chart is in order of ascending THEIR, not vice versa. In addition, the SS give themselves the signals for the purchase and sale, which also need to monitor and take into account the trader. Thus, a buy signal gives the time of crossing from the bottom up ("golden cross"), 4 and 18 SS and 18 SS and 65. Accordingly, a sell signal ("dead cross") gives the intersection of the SS, but from top to bottom.
4. SS must go out of the body MACD histogram, giving traders a signal to buy or sell. RSI must be above the value of either 50 (in the case of intent to buy) or below 50 (in the case of the proposed sale). Location S.Stochastic for 60 -, 15-minute charts does not matter. However, do not want their location in the overbought zone (if we want to buy) and oversold (if we want to sell). This indicator is not in any case should not be oversold (with intent to sell) or overbought (with intent to buy) for 10 -, 5 - and 1-minute charts. The minimum value of the indicator on a 5-minute chart - not less than 25 (for sale) and not more than 75 (when buying). At the same time Parabolic must lie with respect to candlesticks, as described in Section 1.
Five. In this trading system price movement in the opposite direction (after the entry point) is practically reduced to a minimum and can only be influenced by some fundamental factors, or in the case of an inaccurate determination of the point of entry and premature opening of the contract.
6. If, after entry into the market move in the right direction is still not developed, then after 35-50 minutes after the opening position (if re-analysis has shown that you have not opened it prematurely) to close the deal, as the market is obviously waiting for some information, which can throw it in the junk for you aside. In these cases (keeping in mind the commandment "Do not lose!") Is better to get out, look around, wait and after the situation will be explained again by selecting the entry point to open the contract.
Trading on short positions
Now analyze a concrete example of a trading system on short positions (trading long positions - a mirror). Assume that the location of the SAR on the daily chart is different (Parabolic SAR is below candles) on the location of the SAR in all the rest (60 - and 5-minute) charts (SAR are located on top of spark) (Fig. 1). In this case, discarding the analysis of the daily chart and proceed to the analysis of the 60-minute time frame and the next (as they are descending). Define and establish support and resistance levels (near the lifts do not sell, and close to the resistance - do not buy).
- Trend - bearish, Parabolic candles on top and under the "protection";
- SS (moving average) with periods of 4 and 18 showed "dead cross", or intend to do so;
- DMI confirms the testimony of the SAR and shows the sale;
- RSI is in the zone below 50, or turned in this direction;
- MACD gave a sell signal either going to do it;
- S.Stochastic gave the signal for the sale and not in oversold territory (however, if this is not the case, the trader should not be a scare, as the 60-minute - long enough period for intraday trading).
All of this allows a trader to conclude that the 60-minute schedule allows him to make a bearish trade. Similarly, for the same parameters analyze the 30-minute chart. Just analyze the 15-minute chart. It is important that the Parabolic was under the "protection". If not, the trader must obtain additional information about the presence of convergence and reversal candle shapes, talking about the upcoming "rollback." In the presence of such signals the opening of the short position is more at risk, in this case it is better not to conclude a deal, but wait until the end of the "rollback".
If the analysis of the 15-minute chart is not contrary to the terms of the sale, then switch to 10-minute schedule and conduct a similar analysis, paying extra attention to S.Stochastic, which should not be oversold
After that, switch to a 5-minute chart, and perform the same analysis as in the previous charts. All the conditions for the sale must be met:
- S.Stochastic in any case should not be oversold;
- Parabolic must be under the "protection", and if the location of the SAR from the bottom of candles candlestick analysis of this time period should definitely talk about the beginning of their movement in the direction of the SAR, as the absence of this condition can lead to a floating loss (rollback) immediately after a short position;
- SS should be tilted downward.
Only in the case when the analysis of all the above chart shows that you can open a short position, switch to the 1-minute chart and find the entry point. It is necessary to wait for the situation where S.Stochastic show overbought zone or close to it. Parabolic should be under the candles. When the trader waited for such a situation, ie defined entry point, he tells the broker to sell.
Closing a Position
Closing a position in reverse order. Trader analyzes the charts from 1 minute to 15 minutes, that is the most short-term, as in that order beginning to work indicators that prompt him when to close a position.
At the 1 minute chart (Figure 5) 65 SS turns away from its bearish direction and is on the horizon, and 18 SS tends to cross the "golden cross" that 4 and 9, while the SS is shown.
MACD at this time should show a purchase, or its signal line should cross the moving average line and the MACD divergence to start with it in different directions.
S.Stochastic to be oversold and starting it from the output (point 3). DMI shows a purchase. Parabolic same should still be above the candles, but no longer under the "protection", or closer to the exit from the "protection".
If there is a situation we are dealing with the beginning of a rollback and the dilution of the indicators. However, we still do not know if this will be rolled back short-term (within 1-minute chart), or it will go deeper (in the sense of price and time). For this purpose, switch to a 5-minute chart. If there is a Parabolic "protection», MACD will not be a purchase, not near the level of support, do not give a candlestick reversal signal, and the convergence of the indicators are not seen - that would roll back a short time and move prices higher.
If a 5-minute chart Parabolic SAR is not under the "protection", and on indicators of convergence is seen, then rolled back to the 1-minute "hook" of 5 minutes and will take longer time and deeper into the price movement. Analysis of the 10 - and 15-minute chart is similar to the 5-minute. If there will be prerequisites to the return run, it means rolling back on a 5-minute chart "hook" the 10-minute, and he, in turn, a 15-minute, and start something like a chain reaction. When there is such a picture, it is necessary (at the beginning of a rollback of the 1-minute chart) instruct the broker to close the contract. Otherwise, it can lead to partial or complete (if later it becomes clear that this is a trend reversal) floating loss of profits. This method of trading for short periods of time (with a deposit of $ 5,000 and at the opening of the contracts of several lots) allows to obtain rather impressive profits.