Virtuosity A scalping algorithm is extremely versatile trading tool that enables user to aggressively follow the trend and take advantage of inherent market volatility in forex market. As such, it can be applied on any currency pair and any time frame with multitude of variations. Those can be fluently scaled, ranging from extremely aggressive to mellow and conservative.
All systme rules are fully transparent. Algorithm was developed based on our experience of building hundreds of averaging trading systems during recent years. We have also build hundreds of conservative forex algorithms which enabled us to connect the best elements from both worlds. Resulting scalping algorithm uses conservative measures to accurately define trend and momentum in forex and uses aggressive methodology to achieve high winning rate.
Virtuosity A forex scalping algorithm
Main trend and momentum identification
We make sure to trade with the general market flow. Momentum is monitored to avoid entering on weakening trend.
Proper identification of main trend ensures that algorithm will never trade against the general market flow. Systems also considers trend momentum. This step helps to avoid late entry into the trend that is already losing its power. Reliable and widely used forex indicator is used : MACD (Moving averages convergence divergence). Indicator is popular and well know, which makes it easier for the trader to apply it, and what more important understand it.
Secondary trend and momentum identification
Secondary trend filter can be turned on or off according to the traders needs. Turning it on will enable more accurate trend and momentum identification.
Secondary MACD filter can be applied in this scalping algorithm. Trader increase the accuracy of trend identification by allowing second filter with different calculation periods.
Bollinger bands immediate momentum signal
Immediate momentum confirmed by trend will trigger initial entry. Presence of the signal is not necessary for consecutive averaging trades.
Volatility dependent BB tunnel will identify immediate price momentum. Initial entry point will be created by price moving outside the BB tunnel in the direction of trend. This filter will further increases accuracy of the system by helping us avoid entering the market that lacks momentum in any particular direction.
Initial entry is dependent on trend and momentum. Once the initial entry fails algorithm will use averaging to take advantage of residual market momentum. Momentum of the trend cannot dissipate immediately. corrections and tests will typically at the end of the trend. Price doesn't have to reach previous low, for expert advisor to exit all existing trade on averaged price and in profit. Once algorithm closes the trade further scalping entry will be avoided by simple lack of momentum.
Averaging aggression can be fluently scaled by adjusting number of trades, averaging interval and increase in lot size for consecutive trades.
Once initial entry fails averaging trades can be opened on better price. Trade can adjust algorithm to suit exactly his needs and desired level of aggression and risk. Trade can adjust the distance between consecutive averaging trade, number of averaging trades and increase the lot size with use of increase factor. Price will never have to reach initial trade to close all exiting trades in profit. Averaging creates opportunity to exit the fundamentally incorrect trade at the end of the trend in profit on price correction.
Target profit depends on number of opened trades. Risk reward ratio is always proportional.
Proportional target profit is calculated by the algorithm. The goal is to put risk and reward for the trade in the proportional relationship. If our target for 1 trade is 10 USD the target for 10 trades will be 100 USD. This unique yet simple approach ensures that we get the most out of each entry while not compromising risk reward ratio of averaging system.
Accepting the loss
This forex scalping algorithm uses two methods for accepting the loss. Simple equity based stop loss for all opened trades. Method is applied especially when using the Virtuosity A as a scalper in lower timeframes. System can also accept loss only on MACD confirmed trend reversal. This method is more suitable for more conservative day trading systems and ensures that the trade will not get stopped prematurely.
System can follow the trend for months and accept loss only on its reversal. In majority of scenarios, algorithm can switch trend directions without accepting the loss.
Virtuosity A MT4 Expert advisor Summary
Virtuosity A is a fully transparent MT4 expert advisor (algorithm) scalping in the direction of trend and momentum. It enables trader to adjust it for any market conditions. Original averaging methodology is used for position placement and liquidation. Aggression can be fluently adjusted. Forex scalping algorithm can be therefore used both as a conservative day trading robot, or extremely aggressive scalper.