Scalping FX with Cyrox Rainbow

[shodd]

Like you and Prawn I have decided to concentrate on AUD\JPY. I have to thank you Tayser for doing the analysis that I based my decision on

Last night was a good one for going long. Made some good pips going that way, but the end result could have been a lot better if I had decided to stay out of shorting. Must remember to consider the longer term trend (from 30 sec chart) more!

 

[prawn_86]

Just opened up my charts and there was a nice setup

However, continuing my not holding long enough theme i only managed to nett 1 pip.


02:15:07 AUD/JPY Executed Bought 30000 AUD/JPY at 100.23
02:17:04 AUD/JPY Executed Sold 30000 AUD/JPY at 100.25

 

[prawn_86]

Another 3 pips nett before dinner.

While i was away i missed an awesome setup with it breaking up through 100

 

[prawn_86]

Another 3 pips

Today was my 2nd best day ever. Amazing what happens when you actually only trade the signals, rather than trying to predict things.

 

[tayser]

I only just clawed myself back to breaking even last night.... the first three were in a sideways market that I didn't realise - I should have as a fairly decent downward move had just completed itself (I was looking for the continuation...) trade 4 is what I should have just waited for - clear break of previous resistance and if I hadn't have taken the 3 previous trade, I'd have stopped with a net 8 pips (close enough to the daily target for me). Last trade got me to 1 pip down where I stopped.

Time Order ID Message Event TIF Orig Trader ID
18:40:02 0w0002s:04q9-00 Sell Short 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.09) Filled GTC
18:42:33 0w0002s:04wr-00 Buy 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.12) Filled GTC
18:47:32 0w0002s:055b-00 Sell Short 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.09) Filled GTC
18:51:52 0w0002s:05e3-00 Buy 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.10) Filled GTC
18:52:52 0w0002s:05h8-00 Sell Short 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.07) Filled GTC
18:54:55 0w0002s:05k7-00 Buy 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.10) Filled GTC
20:18:48 0w0002s:066o-00 Buy 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.14) Filled GTC
20:26:53 0w0002s:0bbc-00 Sell 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.23) Filled GTC
20:47:07 0w0002s:0c8p-00 Sell Short 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.18) Filled GTC
20:50:28 0w0002s:0ccu-00 Buy 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.18) Filled GTC
21:03:15 0w0002s:0cw0-00 Buy 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.22) Filled GTC
21:10:33 0w0002s:0dcn-00 Sell 900000 AUD/JPY @ Market on MBTX [expiring: 27/05/2008] (900000 traded at 100.25) Filled GTC

-3(-4), -1(-2), -3(-4), 9(8), 0(-1), 3(2): total 5 gross, (-1) net.

 

[prawn_86]

Got 2 pips this morn. Slowly improving...


The signals weren't quite there, but the Resistance was very strong at 15 and 12 so thats why i entered. .2 was my target and i just missed that 1st spike.

Im starting to be comfortable holding longer

 

[Trembling Hand]

The signals weren't quite there,

In fact the rainbow inverted after you entered and gave you a sell signal didn't it?

 

[tayser]

prawns attempted to pick the bottom/reversal, the entry's a little too early - had he waited for the first couple of waves after he entered to complete and then let it ride (how far did it go eventually prawn?) it would have been perfect contrarian trade.

You need to get as early an entry as possible on the trend continuation trades - patience is needed for the contrarian trades. What I see when I see that chart: can see the momentum was slowing and that's where you prepare for a reversal/contrarian trade.

well that's my two Euro cents anyhow

 

[korrupt_1]

hey guys... been following this thread with much interest... i'm a total noob to FX trading, but from my understanding (trial and errors)... 1 pip is not worth a hell of alot right??

i tried trading 1 AUD/USD contract on IG's demo a/c. The deposit I needed was USD$2000. However, 1 pip ($0.0001) was worth only $10...

When you guys say that you get nett 1 pip.. that's only $10? So... if you needed $2K capital to trade and get $10 in returns... that's 0.5% return on capital?

I trade the Aussie 200. 1 contract requires AUD$1750 deposit. Each point is worth $25. So if the index moves 1 points... that's $25 profit... return on capital outlay is 1.4%...

So to all you FX traders, what deposit do you need to make it really worth the while to scalp 1 or 2 pips here and there?

 

[tayser]

Depends on the leverage & the lot size.

100,000 AUD/USD, 1 pip = $10USD
1,000,000 AUD/USD, 1 pip = $100USD
10,000,000 AUD/USD, 1 pip = $1000USD

100,000 EUR/GBP, 1 pip = 10GBP
1,000,000 USD/CAD, 1 pip = $100CAD
10,000,000 USD/CHF, 1 pip = 1000CHF

using 1:100 leverage (1:50 in brackets - which I think is what IG offers), in order to trade 100,000 AUD/USD, you need $1000AUD ($2000AUD) as your margin
1,000,000 AUD/USD requires $10,000AUD ($20,000AUD) margin
10,000,000 AUD/USD requires $100,000AUD ($200,000AUD) margin

You need X amount of the currency on the left hand side of the pair to trade it and your pip value is always in the Y amount on the right hand side of the pair.

I highly recommend buying this book:
It's by an Aussie author and it'll teach you all the basics you need to know about. It's readily available in Dymocks/A&R etc.

cheers.

 

[prawn_86]

(how far did it go eventually prawn?)

It went as high as .24, so i didnt catch the full rise, however i was happy exiting at resistance at .2

Korrupt:
While i am unsure of Aussie200 trading and the like, here is my take on forex:

Assuming i put $1k into a new account.
I trade 3 lots of the AUD/JPY each trade.
The margin for 3 lots is roughly $300 (give or take)
Thereofr marging is 33% of starting capital.
Each pip with that lots size is $2.75 (approx again due to fluctuations)
So if i nett 5 pips per day that = $13.75
That = 1.37% of my initial capital.
If i can make 1% a day on my initial capital consistently (which is the key) it doesnt take long at all to compound gains.

Hope that helps

 

[Trembling Hand]

Assuming i put $1k into a new account.
I trade 3 lots of the AUD/JPY each trade.
The margin for 3 lots is roughly $300 (give or take)
Thereofr marging is 33% of starting capital.
Each pip with that lots size is $2.75 (approx again due to fluctuations)
So if i nett 5 pips per day that = $13.75
That = 1.37% of my initial capital.

Looking at that from account size to maximum risk per trade you are way over-leveraged. With scalping you can guarantee that if you do it regular enough to make money from it at least once a month you are going to take a 2 or more R loss. I know you are just feeling out the system with demo trades but you need to do some more work on R:R before you leverage a small account like you have stated above.

 

[prawn_86]

Thanks TH,

I appreciate the advice.

I am slowly reading my way through various trading books at this stage also, so hopefully i'll pick up some stuff there too

 

[Stormin_Norman]

Looking at that from account size to maximum risk per trade you are way over-leveraged. With scalping you can guarantee that if you do it regular enough to make money from it at least once a month you are going to take a 2 or more R loss. I know you are just feeling out the system with demo trades but you need to do some more work on R:R before you leverage a small account like you have stated above.

yeah that is the same thing ive been thinking in discounting scalping as a long term successful strategy (not saying people cant do it. we just have different risk preferences).

have a go of this excel file and see the difference the risk ratios can make to the results of an account.

it is set up to have 1/3 successful trades. Anything over 10% sees the account more then likely blown. 2% sees it rarely fail. With the same returns.

http://myfreefilehosting.com/f/b63cf9a39a_0.23MB

 

[tayser]

Positive limit slippage. woot.

Oh my lovely Yen crosses (the above is the start of this below - a benefit with a market order for exit is that I could have grabbed A LOT more, dunno why I used a limit, but hey, 15% return on my account since demo balance was reset)

^ Lions, tigers and bears? oh my!

Time Order ID Message Event TIF Orig Trader ID
18:28:40 0w1002s:09w2-00 Buy 950000 AUD/JPY @ Market on MBTX [expiring: 28/05/2008] (950000 traded at 100.23) Filled GTC
18:40:24 0w1002s:0apb-00 Sell 950000 AUD/JPY @ Market on MBTX [expiring: 28/05/2008] (950000 traded at 100.26) Filled GTC
19:05:14 0w1002s:0c3b-00 Sell Short 950000 AUD/JPY @ Market on MBTX [expiring: 28/05/2008] (950000 traded at 100.40) Filled GTC
19:06:07 0w1002s:0c7w-00 Buy 950000 AUD/JPY @ Market on MBTX [expiring: 28/05/2008] (950000 traded at 100.38) Filled GTC
19:30:11 0w1002s:0dkf-00 Sell Short 950000 AUD/JPY @ Market on MBTX [expiring: 28/05/2008] (950000 traded at 100.30) Filled GTC
19:33:42 0w1002s:0doq-00 Buy 950000 AUD/JPY @ 100.28 Limit on MBTX [expiring: 28/05/2008] (950000 traded at 100.24189474) Filled GTC

8 net, that's enough for me.

 

[tayser]

Wait for the breaks and don't be greedy!

Time Order ID Message Event TIF Orig Trader ID
19:48:48 0w2002s:082i-00 Buy 1000000 AUD/JPY @ Market on MBTX [expiring: 29/05/2008] (1000000 traded at 100.11) Filled GTC
19:51:41 0w2002s:08al-00 Sell 1000000 AUD/JPY @ Market on MBTX [expiring: 29/05/2008] (1000000 traded at 100.15) Filled GTC

 

[prawn_86]

nice work.

i have had a few beverages tonight and wouldnt be able to concentrate as much as i need too

 

[tayser]

or if you felt like being greedy...... the following could have occurred.

good old Guppy.

a lazy $2ks work in under 15 min (note the lot size/compounding I'm doing). Now go read a book

 

[tayser]

nice work.

i have had a few beverages tonight and wouldnt be able to concentrate as much as i need too

yah, dont scalp when you've had a few drinks - tried it once and blew up an EFX demo account. Who'd've thunk $10k can disappear so fast

 

[disarray]

sorry trembling hand, whats an R loss? and when scalping you watch the whole trade so you won't lose more than you are willing to, so i don't understand what you mean when prawn86 is overleveraged. cheers.