Scalping FX with Cyrox Rainbow

[tayser]

lots of short sharp upward moves to the left, price was taking a breather and just (aggressively) entered as it started to slowly move upwards again - finger was hovering over the cover button however, ready to get out at the first sign of downward trend continuation. exited after yet another short / sharp up move.

2nd one is a text book (or more to the point: 'e-book' (from the official one )) trade: wait for the move to complete (you look for signs that it's complete like lower highs/lows etc) and take the opposite view.

 

[prawn_86]

Do you use the oscilator T?

Im too stingy to pay for it

 

[tayser]

nope, nekkid (figuratively, not physically )

 

[Andy_aus]

Make enough money from the rainbow and buy the oscillater

Sorry if none of this has been mentioned before but have you guys ever considered IB.... lower commisions and about the same spread as efx.

 

[tayser]

min account opening balance turns me off them.

 

[prawn_86]

Got absolutely hammered tonight

lesson from tonight is I need to get out of bad trades earlier, i just struggle to identify what exactly is a bad trade before its too late.


Short 1. -7 pips
**I thought this was a decent entry. Breaking down through .1. Held too long**
03:31:32 AUD/JPY Executed Sold Short 30000 AUD/JPY at 91.08
03:32:07 AUD/JPY Executed Bought 30000 AUD/JPY at 91.14


Long 1. -7 pips
**Was looking for upwards continuation. In hindsight not a very good trade. Also held too long**
03:34:24 AUD/JPY Executed Bought 30000 AUD/JPY at 91.19
03:35:51 AUD/JPY Executed Sold 30000 AUD/JPY at 91.13


Long 2. -5 pips
**Dunno what i was thinking trading against the flame**
03:36:29 AUD/JPY Executed Sold Short 30000 AUD/JPY at 91.07
03:38:01 AUD/JPY Executed Bought 30000 AUD/JPY at 91.11


Short 2. +7 pips
**Expanding flame continuing downwards. If only every trade was like this. Picked a good exit too**
03:40:01 AUD/JPY Executed Sold Short 30000 AUD/JPY at 91.05
03:41:48 AUD/JPY Executed Bought 30000 AUD/JPY at 90.97

Short 3. +3 pips
**Another decent trade. Continuation, expanding flame breaking down through .9**
03:52:48 AUD/JPY Executed Sold Short 30000 AUD/JPY at 90.87
03:53:51 AUD/JPY Executed Bought 30000 AUD/JPY at 90.83

Long 3. +2 pips
**Could have held longer but was worried about resistance at .1. Didnt enter until .00 had been successfully cleared**
04:01:09 AUD/JPY Executed Bought 30000 AUD/JPY at 91.05
04:04:21 AUD/JPY Executed Sold 30000 AUD/JPY at 91.08


Short 4. +1 pip
**Quick scalp**
04:06:19 AUD/JPY Executed Sold Short 30000 AUD/JPY at 91.08
04:06:57 AUD/JPY Executed Bought 30000 AUD/JPY at 91.06

Long 4. -10 pips
**Killed me. Was a little unlucky, as soon as i submitted the order it jumped by 3 pips so that was my entry price. Would have still lost out in the end though even without the bad fill**
04:08:53 AUD/JPY Executed Bought 30000 AUD/JPY at 91.15
04:09:24 AUD/JPY Executed Sold 30000 AUD/JPY at 91.06


Short 5. -3 pips
**A 'better' losing exit. Got out as soon as i thought it was going bad.**
04:26:27 AUD/JPY Executed Sold Short 30000 AUD/JPY at 91.04
04:27:42 AUD/JPY Executed Bought 30000 AUD/JPY at 91.06
So all up 19 points down. Lucky its a trial account

 

[roland]

Got absolutely hammered tonight

lesson from tonight is I need to get out of bad trades earlier, i just struggle to identify what exactly is a bad trade before its too late.

either that or not get into a bad trade in the first place.

I started playing with this last night - and slowly but surely, I am finding it a little boring.

I am finding that it is easier to lose money than to gain because of my built in resistance to wanting to accept a loss and my excitement of taking a quick gain - so my loses tend to run a little long, and my profit taking is a little quick.

I am running the data on a 1 sec tic, which is visually appealing, but distorts the overall trend.

Now I am experimenting with running the buy/sell cycle a little longer - like 10 minutes or so, my results are better and closer to the overall trend. Probably this goes against the scalping theory - not sure.

Does the EFX Account show all the costs in demo mode, that would be resultant in real life? I've done like 41 trades, have a P&L of -$14.00 with gross commissions of $18.55

So far this seems like a hard way to make $20 or so ... (well, that is when I am able to make my return positive)

The rainbow chart is way pretty though

 

[tayser]

Some real pips tonight:

 

[tayser]

Got absolutely hammered tonight

lesson from tonight is I need to get out of bad trades earlier, i just struggle to identify what exactly is a bad trade before its too late.


Short 1. -7 pips
**I thought this was a decent entry. Breaking down through .1. Held too long**
03:31:32 AUD/JPY Executed Sold Short 30000 AUD/JPY at 91.08
03:32:07 AUD/JPY Executed Bought 30000 AUD/JPY at 91.14

Never ignore the immediate trend visible on the chart (relatively powerful uptrend) - this is price taking a breather. Price looks like it's going to start going down, but really, the immediate trend is just taking a breather - you were unlucky because there's a Weekly pivot @ 91.02 and a daily pivot @ 91.13. Irrespective of the pivots, don't ignore the previous trend, it will only really change direction as quickly as that when something spooks the market. A Good entry would have been to go long when the flame (red WMAs) disappears back into the rest of the rainbow (oranges then yellows) - the price went sideways across 2 pips then kept going upwards again. A good exit would have been where your long enter 1 is. However I'll note with all your exits on that chart: they're perfect, you're getting out as soon as you feel it goes against you (I still have this issue ) even though the entries just need to be the opposite (contrarian).

Long 1. -7 pips
**Was looking for upwards continuation. In hindsight not a very good trade. Also held too long**
03:34:24 AUD/JPY Executed Bought 30000 AUD/JPY at 91.19
03:35:51 AUD/JPY Executed Sold 30000 AUD/JPY at 91.13

If you were thinking this was a trend continuation: chances are I would have been in there with you as the price has broken the previous high at 91.16. You've correctly exited when it's gone against you.

Where you exited long 1 is a perfect short signal - price is disappearing inside the rainbow and turns out it was a double top.

Long 2. -5 pips
**Dunno what i was thinking trading against the flame**
03:36:29 AUD/JPY Executed Sold Short 30000 AUD/JPY at 91.07
03:38:01 AUD/JPY Executed Bought 30000 AUD/JPY at 91.11

You're looking at the right type of entry signal, just a little too quickly. The Roo buck D) requires a little more patience than Euro-lefty and pome-dollars. It looks like you started your session where you took your first short - give it time, even if you see a juicy signal, when you first start, don't take it.

Short 2. +7 pips
**Expanding flame continuing downwards. If only every trade was like this. Picked a good exit too**
03:40:01 AUD/JPY Executed Sold Short 30000 AUD/JPY at 91.05
03:41:48 AUD/JPY Executed Bought 30000 AUD/JPY at 90.97

Excellent trade. 8/10 for the effort - 10/10 marks would have been awarded if you'd entered near your Exit Long 1 (eh, I'm too pussy to hold on for that long, so don't aim for 10/10 everytime lol ), 9/10 marks would have been awared if you entered around Exit Long 2 - this is a nice entry signal, the previous high that you entered long confirmed a lower high - and a right shoulder in a H & S pattern, the price is then making lower highs til its ars3 drops & along with its lunch at 91.08. I know it's easy for me or anyone to look back and see it now, but train yourself to WAIT and be PATIENT (it's taken me months to learn it) and the pips will flow. Perfect Exit - you weren't greedy and you exited at the end of sharp down move (Exit gets 10/10 btw)

Short 3. +3 pips
**Another decent trade. Continuation, expanding flame breaking down through .9**
03:52:48 AUD/JPY Executed Sold Short 30000 AUD/JPY at 90.87
03:53:51 AUD/JPY Executed Bought 30000 AUD/JPY at 90.83

Can't really comment on that one cos I can't see the time gap between the first chart and this, but eh, who cares, it's positive, win. One pip for me, one for you. I will say however, notice where you exited what happened thereafter? When you see sharp down moves that come back up pretty quickly (on a 5 second chart the price will disappear into the rainbow - and you should know what that means by now). They're more aggressive (and higher risk) entries - ones that you need to be a little more tolerant of erratic movements (and hold your finger firmly above the exit button), but if you start seeing lower lows and higher highs (or vice versa if you've done short), you know to hold on and that you've caught the new trend. A 10/10 entry would have been a couple of seconds after you exited Short 3, and a 9/10 entry would have been on 18:27:35 - that price spiked above a previous high and didn't retrace too much. A good exit would have been your target or anywhere after a nice sharp burst which gives you some extra pippage.

Long 3. +2 pips
**Could have held longer but was worried about resistance at .1. Didnt enter until .00 had been successfully cleared**
04:01:09 AUD/JPY Executed Bought 30000 AUD/JPY at 91.05
04:04:21 AUD/JPY Executed Sold 30000 AUD/JPY at 91.08

Good trend continuation entry, can't fault it. Exit is good too - I actually do this alot, I don't hold for very long either, both you and I focus on getting in and out very quickly when we don't always have to be. we both need to learn to trust the rainbow. A good exit here would have been after 10 (my target) or when the price disappeared back into the rainbow after that peak at 91.14

Short 4. +1 pip
**Quick scalp**
04:06:19 AUD/JPY Executed Sold Short 30000 AUD/JPY at 91.08
04:06:57 AUD/JPY Executed Bought 30000 AUD/JPY at 91.06

I can now tell you're getting quicker and you're more alert to what the rainbows telling you. Everyone on Cyrox will tell you the same thing: you need to get in earlier. Perfect entry is the same as the previous exit I mentioned: when the price disappears into the rainbow (i.e rainbow is telling you trend is changing). You were positive however, w00t.

Long 4. -10 pips
**Killed me. Was a little unlucky, as soon as i submitted the order it jumped by 3 pips so that was my entry price. Would have still lost out in the end though even without the bad fill**
04:08:53 AUD/JPY Executed Bought 30000 AUD/JPY at 91.15
04:09:24 AUD/JPY Executed Sold 30000 AUD/JPY at 91.06

lol, it can be a bitch eh? Only thing to comment on here is that you're perhaps on the verge on overtrading, you've entered pretty quickly after exited (eventually you'll do it all the time), but given the amount of losses you've had, I assume you were feeling pretty desperate to make the pips back? Ending the day with a loss isn't all that bad.

Short 5. -3 pips
**A 'better' losing exit. Got out as soon as i thought it was going bad.**
04:26:27 AUD/JPY Executed Sold Short 30000 AUD/JPY at 91.04
04:27:42 AUD/JPY Executed Bought 30000 AUD/JPY at 91.06

You were looking for the break of the previous low at 91.03, yeah? Remember that the .00 level is a natural support level for yen crosses, This is easy to see after the fact (what isn't) and pretty hard to see as it happens when you first start attempting it, but with time you'll probably nail it: it's a combo of looking at the overall pattern you see on the chart and using the flame disappearing into the rainbow as the entry. The rainbow was making higher lows and higher highs - we generally think that this is the start of an uptrend (albeit it somewhat haphazard) - don't do anything when you see this - it will either go sideways, but DO pay attention to the macro pattern it forms (in this case a triangle!) watch for immediate pattern changes: see how there were two lower highs just before it headed south? bang - when you see that, get excited. When the flame disappears into the rainbow, enter, or if you want to be a little more conservative, enter when the price breaks the first low (91.09-91.10) levels. Exit after target or when the flame disappears back into the rainbow again.

So all up 19 points down. Lucky its a trial account

lol I've blown up a few EFX accounts in one night before, it's somewhat liberating after a while....... snort

Patience. Persistence. Pippage.

Win.

HTH.

 

[roland]

sorry, but I am finding it hard to believe a loss can be had with a rainbow chart like the current AUD/JPY one.

Am I missing something here????

 

[prawn_86]

Thanks T,

that was massively helpful.

I think i will be coming back to this combo of trades and your commentary on it. Very insightful.

Cheers again, and I hope your hitting your targets

 

[prawn_86]

sorry, but I am finding it hard to believe a loss can be had with a rainbow chart like the current AUD/JPY one.

Am I missing something here????

It depends on your timeframe Roland.

When i first started this method I liked the longer timeframes also, but worked my way into shorter terms.

A 30sec chart could still be considered scalping, but not ultra short term. I guess it just depends how much screen time you can fit in.

The other thing is look at the 1st peak and trough. from top to bottom it is 25 pips. Wouldnt you get a bit edgy losing that much on each dip? Again it depends on your hold time.

 

[roland]

It depends on your timeframe Roland.

When i first started this method I liked the longer timeframes also, but worked my way into shorter terms.

A 30sec chart could still be considered scalping, but not ultra short term. I guess it just depends how much screen time you can fit in.

The other thing is look at the 1st peak and trough. from top to bottom it is 25 pips. Wouldnt you get a bit edgy losing that much on each dip? Again it depends on your hold time.

but don't you amplify your risk by taking too short a time frame?

I mean to say, the current AUD/JPY trend is up, how can you justify any loss with an upward trend?

 

[tayser]

NY open in 10, maybe some demo pips...

 

[prawn_86]

but don't you amplify your risk by taking too short a time frame?

I mean to say, the current AUD/JPY trend is up, how can you justify any loss with an upward trend?

The current share market trend since the 1900's is up.

Do you justify losses with that :

Horses for courses

 

[roland]

The current share market trend since the 1900's is up.

Do you justify losses with that :

Horses for courses

well said, but in the course of you making x number of quick trades and making a loss, I have made a profit in the same period wth less trades ... and all done within my lifetime - I do believe that scalping tends to turn trading into a Space Invaders game akin to gambling.

but hey, who am I to point out the obvious - you have to pay for your fun - right?

 

[prawn_86]

well said, but in the course of you making x number of quick trades and making a loss, I have made a profit in the same period wth less trades ... and all done within my lifetime - I do believe that scalping tends to turn trading into a Space Invaders game akin to gambling.

but hey, who am I to point out the obvious - you have to pay for your fun - right?

Dont get me wrong, i know a few people who trade a rainbow with a 2 - 3 day timeframe and are happy with it.

it just depends on what method suits you.

im sure there would be days when you make losses to though with that method. if not let me know and i'll happily trade it...
And theoretically the losses would be bigger as you need to allow a wider range to get your R:R

 

[roland]

Dont get me wrong, i know a few people who trade a rainbow with a 2 - 3 day timeframe and are happy with it.

it just depends on what method suits you.

im sure there would be days when you make losses to though with that method. if not let me know and i'll happily trade it...
And theoretically the losses would be bigger as you need to allow a wider range to get your R:R

are you trading with a real account, or still on demo?

 

[prawn_86]

are you trading with a real account, or still on demo?

Still on demo, and def will be for many more months yet.

i only first discovered this method about 6 weeks ago, and 4 of those weeks i didnt even open the charts due to other commitments.

Im in no rush to go live.

 

[roland]

Still on demo, and def will be for many more months yet.

i only first discovered this method about 6 weeks ago, and 4 of those weeks i didnt even open the charts due to other commitments.

Im in no rush to go live.

so, still in Space Invaders mode???? Seems like everywhere I look, Linuxtroll, Cyrox.com etc, everyone is in demo mode - me too .... rainbow is pretty, but the risk/return kills most for going live