One of my favorite trading systems is a scalper of my own that I use at GO! Standard account. I love this strategy because it is so damn simple and it works much, much better than hundreds more complex things I tried...
It uses only a few moving averages, as well as calculate price deviations. By doing this it looks at three dimensions of price movement:
- direction
- deviation
- volatility
Idea in short: if there is some consistent direction of the price movement, and price moves sharply* enough against it (without breaking the most recent retracements deviation pattern) - the system enters trade in the direction of the main move.
Sharply* is very relative but it is the key. Obviously the system doesn't try to match the main trend volatility, but rather the most recent volatility. For example: it looks for a sharp retracement in the morning compared to nightly volatility. This volatility is in fact very small compared to day-time one, but the short term deviation will be negative and main trade direction maintained. In general, smaller volatility periods are present very often during all kind of trends and the trades are distributed almost equally throughout the day.
This system works on multiple timeframes and symbols (currencies as well as indices), however my favorite one is EURUSD 1M. The Risk to Reward ratio is dynamic, depends on pair / timeframe.
Sharply* is very relative but it is the key. Obviously the system doesn't try to match the main trend volatility, but rather the most recent volatility. For example: it looks for a sharp retracement in the morning compared to nightly volatility. This volatility is in fact very small compared to day-time one, but the short term deviation will be negative and main trade direction maintained. In general, smaller volatility periods are present very often during all kind of trends and the trades are distributed almost equally throughout the day.
This system works on multiple timeframes and symbols (currencies as well as indices), however my favorite one is EURUSD 1M. The Risk to Reward ratio is dynamic, depends on pair / timeframe.
I even thought about publishing source code of this EA... But I won't. Why? Why should I...? EURUSD 1M backtest:
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