There are only a few things in the world that are nicer than watching your account grow every single day. And for some reason I always wanted a scalper that would be able to trade aggressively – and survive in the market. By aggressively I mean thousands of time per year and without a stop loss.
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This type of trading is inherently coupled with risk, that is too much for most of the traders. In recent months I was working diligently to create my pet scalper that would meet my requirements and be able to survive this type of trading by overcompensating for losing positions.
No stop loss scalping
Ability to cover the loss by temporarily increasing its aggressiveness of scalping in the opposite market direction.
The scalper takes small profit of 3 -5 pips multiple times a day using multiple trend confirmation to its advantage. It scalps in the direction of trend. Once the trend changes and a few positions are left opened on the wrong side of the market, scalper needs to be able to overcompensate for the groqing loss (at least partially).
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I have tried a couple of different models and I finally came up with simple and yet effective method that is aggressive but not too aggressive at the same time. Strategy considers the amount of position opened in the opposite direction and adjusts the lot size of newly opened position accordingly.
As always we bring you a full strategy together with its rules and expert advisor.
MACD (moving average convergence divergence) histogram only
5000, 10 000
One of the cornerstones of no stop loss trading is an absolute necessity to avoid fighting trend. Considering the fact that we trade in 1 min timeframe ultra slow MACD is used to identify main driving force in the market.
MACD 12,26,9. With trade entry signal we also consider red signal line. Standard procedure (histogram parting away from signal line) is used.
To achieve the best possible price candle filter is used. We enter long only on bearish candle and short only on bullish candle close.
Considering that this is scalping forex strategy. Never enter the trade on spread higher than 0,5 pips. Also, pick a solid ECN broker with low commission costs. This is absolutely crucial for this strategy to work.
When entering the position consider the amount of positions opened in the opposite market direction. Lot size calculation: Number of opened positions in opposite direction*default lot size+default lot size.
Forex strategy rules
Strategy works the best in 1 min timeframe (any major currency pair can be used with adjustments).
Trend filtering MACDs are all trending below zero line. Downtrend is identified. We enter short trades only.
We check signal MACD (12,26,9). Histogram must trend above zero. We enter the trade short once histogram falls below the red trigger line and bullish candle closes.
Do not forget to consider spread and do not enter the trade on spread higher than 0,5 pips.
Take profit: 3 – 5 pips.
Stop loss: none (Expert includes adjustable stop loss that can be turned off by switching it to 0)
Lot size: Number of opened positions in opposite direction*default lot size+default lot size.