Help with Detecting Short, Few Minute, One Direction Price Shifts

[P.W. 10]

Hi all

 

I would gladly hear your recommendations. I am wondering is there a way to pick up on these short movements when the price goes continuously in one direction for 10 pips or so. I would be grateful for recommending me a few indicators that would help me to determine that.

What I am thinking of is to do a few (2-3) very small trades a day - a 3 pip take profit and a 3 pip stop loss + spread, per trade. It gives approximately 2:1 risk-reward ratio. Obviously, in order for it to be profitable a very high win rate is needed. That's why I want to choose favourable market conditions and a proper currency pair.

 

I'm working on MT4. Do you have any recommendations about the indicators I could use, currency pair and the time frame/number of ticks per bar I should try?

 

Cheers

P.

 

Help with detecting short, few minute, one direction price shifts

[rforexdad 10]

There is a simple process....

Open for example EUR/USD in two time frames

 

a) 15 minute

b) 5 minute

Add MACD indicator in both charts

 

If You see that the 15 minute chart is heading down.

wait for the crossover in the 5 minute chart of the MACD

Once it has crossed over...enter with a sell order by market

and give it a limit of 10 pips and a stop loss of 20 pips

 

Similarly if the market moves up

wait for a crossover in the 5 minute chart

 

This is a very patient game and only enter at the crossover.

 

8 out of 10 times you will be successfull...

 

Try it out...and let me know if you are successfull.

[ScottB 10]

PW this type of trade is very difficult to do profitably. You can do a statistical analysis of the number of moves per day/week etc that meet your requirements and then look at what happens next after the move i.e. does price continue reverse and how far.

 

You now have to account for reports and to be completely fair news events in general. Even given all that, you have to have tight spreads and low commissions and of course low latency won't hurt.

 

I am not trying to be negative but I would personally look for another way to trade until you have more experience with scalping algorithms. This type of trading seems simple and is not.

 

One area to look in that I alluded to above; see what the probability is of a 3 tick move (or any number you choose) given you have already had an N tick move (this is a type of Bayesian probability).

 

If you can partition your results along the lines I also mentioned above, you might find a good strategy.

 

After re-reading my own post, my guess is that it will sound like gobbledygook so pm me if you want a better explanation.

 

Best Regards,

Scott

[Tams 20]

  P.W. said:

Hi all

 

I would gladly hear your recommendations. I am wondering is there a way to pick up on these short movements when the price goes continuously in one direction for 10 pips or so. I would be grateful for recommending me a few indicators that would help me to determine that.

What I am thinking of is to do a few (2-3) very small trades a day - a 3 pip take profit and a 3 pip stop loss + spread, per trade. It gives approximately 2:1 risk-reward ratio. Obviously, in order for it to be profitable a very high win rate is needed. That's why I want to choose favourable market conditions and a proper currency pair.

 

I'm working on MT4. Do you have any recommendations about the indicators I could use, currency pair and the time frame/number of ticks per bar I should try?

 

Cheers

P.

 

Help with detecting short, few minute, one direction price shifts

 

do you have a chart example?

[rjrow104 11]

Hey,

 

 

So I am not being discouraging by saying this. But, if you are dealing with such small intervals and tp and sl 3 pips, it is going to be very wise to break down price further. I am getting ready to set up a tick depository and plot the results vs a milisecond time graph and monitor the rates of change between ticks, I think the most important thing before you start your research is to determine what market conditions are conducive to this type of trading style, because we know that there is no one system that can trade all markets. So it is important to make sure you find a time and place where your system will succeed. In my own opinion and from my scalping system I am building, I think range-bound markets are the most conducive for scalping type trading. A range is characterized by a failure of higher highs and lower lows, and looking for price swings almost like a sin wave. of course it doesn't always look like that but with what your looking to do, i think it would be wise to take a range bound indicator and then try and predict short term price moves by using a combination of time series analysis and using rates of changes of different intervals to look for price movement in different directions. because with your current setup the only recommendation i can make is to make sure you use oanda as a broker to keep your spreads as small as possible.

[zangar 0]

  On 2/25/2011 at 7:16 PM, rjrow104 said:

Hey,

 

 

So I am not being discouraging by saying this. But, if you are dealing with such small intervals and tp and sl 3 pips, it is going to be very wise to break down price further. I am getting ready to set up a tick depository and plot the results vs a milisecond time graph and monitor the rates of change between ticks, I think the most important thing before you start your research is to determine what market conditions are conducive to this type of trading style, because we know that there is no one system that can trade all markets. So it is important to make sure you find a time and place where your system will succeed. In my own opinion and from my scalping system I am building, I think range-bound markets are the most conducive for scalping type trading. A range is characterized by a failure of higher highs and lower lows, and looking for price swings almost like a sin wave. of course it doesn't always look like that but with what your looking to do, i think it would be wise to take a range bound indicator and then try and predict short term price moves by using a combination of time series analysis and using rates of changes of different intervals to look for price movement in different directions. because with your current setup the only recommendation i can make is to make sure you use oanda as a broker to keep your spreads as small as possible.

Hello, Thank you for your support. Have you heard about any range-bound markets dashboard or indicator for MT4 ?

or perhaps an integrated statistical tool to test a range bound indicator and have current market condition results for a period of time and based on that result we could make the conclusion that market is currently range bound?

I think there is a difference between range bound market which is good for certain indicator and ranging market which is not good for all indicators right?

Kind Regards.

[shon45 0]

  On 2/12/2011 at 1:24 PM, P.W. said:

Hi all

 

I would gladly hear your recommendations. I am wondering is there a way to pick up on these short movements when the price goes continuously in one direction for 10 pips or so. I would be grateful for recommending me a few indicators that would help me to determine that.

What I am thinking of is to do a few (2-3) very small trades a day - a 3 pip take profit and a 3 pip stop loss + spread, per trade. It gives approximately 2:1 risk-reward ratio. Obviously, in order for it to be profitable a very high win rate is needed. That's why I want to choose favourable market conditions and a proper currency pair.

 

I'm working on MT4. Do you have any recommendations about the indicators I could use, currency pair and the time frame/number of ticks per bar I should try?

 

Cheers

P.

 

Help with detecting short, few minute, one direction price shifts

check out Bookmap heat map, which for my opinion can be useful more the other indicators