Price Action Fractal Scalping Trading System - Forex ...

3 years, 28 pairs and 310 trades later

This thread is the direct continuation of my previous entry, which you can find here. I have the feeling my rambles may be long, so I'm not going to repeat anything I already said in my previous post for the sake of keeping this brief.
What is this?
I am backtesting the strategy shared by ParallaxFx. I have just completed my second run of testing, and I am here to share my results with those who are interested. If you want to read more about the strategy, go to my previous thread where I linked it.
What changed?
Instead of using a fixed target of the -100.0 Fibonacci extension, I tracked both the -61.8 and the -100.0 targets. ParallaxFx used the -61.8 as a target, but never tried the second one, so I wanted to compare the two and see what happens.
Where can I see your backtested result?
I am going to do something I hope I won't regret and share the link to my spreadsheet. Hopefully I won't be doxxed, but I think I should be fine. You can find my spreadsheet at this link. There are a lot of entries, so it may take a while for them to load. In the "Trades" tab, you will find every trade I backtested with an attached screenshot and the results it would have had with the extended and the unextended target. You can see the UNCOMPOUNDED equity curve in the Summary tab, together with the overall statistics for the system.
What was the sample size?
I backtested on the Daily chart, from January 2017 to December 2019, over 28 currency pairs. I took a total of 310 trades - although keep in mind that every position is most often composed by two entries, meaning that you can roughly halve this number.
What is the bottom line?
If you're not interested in the details, here are the stats of the strategy based on how I traded it.
Here you can see the two uncompounded equity curves side by side: red is unextended and blue is extended.
Who wins?
The test suggests the strategy to be more profitable with the extended target. In addition, most of the trades that reached the unextended target but reversed before reaching the extended, were trades that I would have most likely not have taken with the extented target. This is because there was a resistance/support area in the way of the -100.0 extension level, but there was enough room for price to reach the -61.8 level.
I will probably trade this strategy using the -100.0 level as target, unless there is an area in the way. In that case I will go for the unextended target.
Drawdown management
The expected losing streak for this system, using the extended target, is 7 trades in a row in a sample size of 100 trades. My goal is to have a drawdown cap of 4%, so my risk per trade will be 0.54%. If I ever find myself in a losing streak of more than 8 trades, I will reduce my risk per trade further.
What's next?
I'll be taking this strategy live. The wisest move would be to repeat the same testing over lower timeframes to verify the edge plays out there as well, but I would not be able to trust my results because I would have vague memories of where price went because of the testing I just did. I also believe markets are fractals, so I see no reason why this wouldn't work on lower timeframes.
Before going live, I will expand this spreadsheet to include more specific analysis and I will continue backtesting at a slower pace. The goal is to reach 20 years of backtesting over these 28 pairs and put everything into this spreadsheet. It's not something I will do overnight, but I'll probably do one year every odd day, and maybe a couple more during the weekend.
I think I don't have much else to add. I like the strategy. Feel free to ask questions.
submitted by Vanguer to Forex [link] [comments]

Schaff Trend Cycle

To me this is the most underrated indicators and it should be used more. It was designed for the Forex market and is a leading indicator. It basically shows you when a trend is about to go in the other direction sometimes before it even happens. I was surprised at how accurate this indicator was when i did some back testing with it basically predicting when are trend was about to change and it almost always did.
The only problem i found with this indicator is that it doesn't work well on the higher time frames but better on the lower time frames. For this reason i think it is a better scalping indicator, say on the 15 minute charts. I entered a couple scalp trades with this indicator and haven't lost any money "yet". I'm not saying that it will work every time because not every indicator is perfect but for now i'm really liking it. I like how it is a leading indicator and not a lagging one, and so far it has accurately detected market tops and bottoms and shown when the swing was about to happen. This is what this indicator was designed to do and so far it does it well!!!
I use this indicator along with a fractal system.
submitted by blastcoinmining to Forex [link] [comments]

Forex Scalping Trading Stategy

Forex Scalping Trading Stategy
Dear Traders,
My name is Ludovico and I am an associate of Horizon Trading team. Today, I would like to share with you a scalping technique that will give you an advantage in following price action fluctuations. Most importantly, this article will focus on fast timeframes trading tactics, how to spot important key levels and trigger your positions.
So, do scalping and price action go well together?
Considering that price action aims to predict what price is doing right now and where is heading, fast mindset and quick analysis become crucial; scalp trading is about the same thing. A scalp trade will take approximately 1 to 30 minutes, so to be effective and consistent in this discipline one must be reacting rapidly to price movements. Therefore, scalp requires quick analysis, quick responses and quick decisions, and at its core there is price action, which as well is all about speed and efficiency.
Now let s move on today’s topic on how to steadily understand fast trading potential earning set ups and to become a killer scalper.

What is scalping trading?

Scalping is a trading style that specialize in profiting off small price changes. It requires high level of concentration, because, due to its speed, a trader must have a strict entry exit strategy, otherwise one large loss could cancel all the many small gains in a blink of an eye.
The main features of scalping are:
Less exposure, lesser risk: A smaller exposure to price fluctuation will reduce the odds to run into adverse events.
Smaller moves are easier to forecast: Because like every market forex works on principles of supply and demands, a higher imbalance is needed to generate bigger price changes.
Smaller fluctuations are more regular than wider ones: Even in days when markets tend to less volatile, working with smaller timeframes such as (M1, M5, M15 & M30) will still grant chance of earning more frequently.
While swing trading relies on big price moves, therefore aiming for long trend following a scalper will trade that fluctuation continuously. Price action comes into play here, a solid scalp trader must be very aware of level of support and resistance and when the price could bounce off.
See image Below:

Figure 1: Support & Resistance, XAUUSD, M1, (23rd July 2019
In order to better find these areas a comparison between timeframes is necessary considering that is always advantageous to highlights the most recent zones of support & resistance (2 to 5 previous days)
Once understanding levels strategy become easier to follow, let’s find out.

Simple scalping and Horizon X scalping pattern

When trading trends continuously, important is to gauge market signals which indicate the trend is strong, opening to new potential earning scenarios for investors. When noticing price is coming back to retest important key levels forming pullbacks, a trader should always look out for entry-points.

Scalping pullbacks

Scalp traders must focus on key resistance and support level to find entry point while trading pullbacks. Here at Trading Academy we developed a system, based on fast moving price action that will enable traders to have successful daily session.
We based our method on understanding where big money players come into action and by following their liquidity volume open winning positions. Horizon X is based on several scalping price patterns which find their fundamentals in risk and money management, key levels and entry points.
See image below:

Figure 2:Scalp trading pullbacks, XAUUSD, M1, (23rd July 2019)
In the picture above I highlight the principle of trading pullbacks in M1 timeframe, this method relies on entering the market in specific hot spot key levels. Even though many traders globally do not take into consideration risk management, our vision is that while scalp trade, investors should follow clear objective rules to be effective, here is one of our coral patterns and its trade management rules.

Horizon X Pattern #3

This pattern aims to gauge momentums, big money players moves, consisting in fast formation of large body candle sticks (black bearish/white bullish)

Figure3: Pattern #3 configuration
To be formed Pattern #3 require several steps to be accomplished by the market before we can enter our position with confidence:
  • First Momentum
When price level is broken out at consolidation level big buyers make the move dragging price level on a rally, usually between 10-15 PIPS (as the image above suggests).
  1. Large candles (bodies)
  2. Mostly of one colour (back/bearish, white/bullish)
  3. Candles close its high/lows of the move
  • Consolidation Period
Within this first part price level is conditioned by the presence of many buyers on one side and sellers on the other stabilizing the price in a narrow range while building up important structure.
  1. Small candles, at least 3
  2. Greater mix between white/black or bullish/bearish candles
  • Second Momentum (breaking the price level at consolidation) – can be bearish or bullish depending on scenario)
When price level is broken out at consolidation level big buyers make the move dragging price level on a rally, usually between 10-15 PIPS (as the image above suggests).
  1. Large candles (bodies)
  2. Mostly of one colour (back/bearish, white/bullish)
  3. Candles close its high/lows of the move
  • Pullback
Price is coming back to retest level at the previous consolidation level and when fractal is formed market is giving investors hints that a good spot to open a position is coming up.
  1. Small candles, at least 3
  2. Greater mix between white/black or bullish/bearish candles

Entering the market

Pattern #3 can be traded by entering the market within the retesting price area at consolidation level, however the tactics would be based more on aggressivity of trader personality and behaviour. In this booklet we will describe the most commonly used one.
Entering in consolidation structure
Market needs more liquidity for further movement and is going deeper toward the structure taking stop losses of weak traders. Smarter investors, however, use these stop losses for their position gaining, entering the market when a fractal is formed.
See image below:

Figure 4: Pattern #3, entering market at consolidation structure, USDCHF H1 (22nd July 2019)
Entering at consolidation boarder
Price touches edges of consolidation and starts to reverse. We would like to open position when fractal is formed.
See image below:

Figure 5: Pattern #3, market entry at consolidation border, GBPUSD M1 (14th Mar 2019)
  • Entering after false break out
Severe stop-loss testing. Big players move price aggressively till the point that it breaks consolidation structure. This is a perfect situation for major traders to enter the market, pushing the price towards its original direction. We will conservatively open trade when the price level reaches back consolidation, forming a fractal.
See image below:

Figure 6: Pattern #3, market entry after false break out, GBPUSD M1 (6th June 2019)

Trade Management

Similarly, we can use 4 elementary exit strategies of our Horizon X Pattern #3.
  1. We will aim for a high structure level from higher timeframes (very good as a second take profit).
  2. For 1-minute timeframe we will take half of our position with 10 points profit as a target and put our stop-loss on break-even for the rest of the position.
  3. Our take profit is based on having ATR 80 %.
  4. Rule of safety. Our first take profit is set to risk-reward ratio 1:1 with a half of position. When the take profit is hit, we are in a risk-free position for the second target.
On the other hand, stop losses will be always places on top of the entry structure to avoid important losses which will likely vanish all the trader day effort.
submitted by Horizon_Trading to u/Horizon_Trading [link] [comments]

Where to begin learning basic code applications for Algotrading

I am sorry about the amateur post; I am sure the community here just gets flooded with these regularly because of the nature of this topic. I had a couple questions and I was wondering if anyone here could provide me with some insight.
I have been trading demo in forex for a couple years and have learned a lot about market data and trading in general. It has turned out to be an entertaining practice that could be quite profitable if I went live.
I am a very math literate and would love to learn more. I would like to use this literacy plus my capability to use logic in my trading by producing my own automated system. To start out learning this I would like to learn how to program a simple fractal based automated trading system and then optimize it by adjusting variables in my system. My problem is I have zero experience with programming or code and I do not even know where to start.
So if you have any suggestions on where I should begin it will be very very appreciated! Questions I still have is what languages are these algorithms written in and what platforms are used to execute them? I saw a backtest website in the comments of this sub linking to:
https://www.quantopian.com/algorithms
Is there any chance I could have enough understanding of python with self teaching and study only?
If anyone wants to help me build an algorithm for the rule set I will list at the bottom of this post in the comments then it would really help me understand how to get started.
Another quick question I have is: are most people here trading high frequency algorithms or is this a place where people develop systems that only trade a few times a week?
Thanks for your replies in advanced. This is a topic that I wish I had better understanding of but seems so daunting that I feel like I couldn't ever begin to understand it. My formal education is for nursing but I feel like I could dedicate myself enough to make this a worthy hobby.
-AlgoTradingReddit
submitted by AlgoTradingReddit to algotrading [link] [comments]

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