Baggerlord's YM Scalping Method

Discussion in 'Trading' started by baggerlord, Aug 13, 2003.

  1. This is a method I have been trading a little, doing pretty well at. It is based on a method in The Compleat Daytrader, by Bernstein.

    Chart setup:

    1 Minute chart.
    34 EMA
    10 SMA of highs.
    8 SMA of lows.

    I call it scalping, you might not, but it does produce a lot of trades. Works nice on the YM, probably good on other indexes, but haven't looked.

    Trades:

    Pullbacks. Wait for two consecutive bars completely below the LMA. Wait for a higher low, and go short on the next lower low.

    Range trades. Wait for a bar completely above the HMA. Short when the low of this bar is taken out. The MA's should be fairly flat. Never do this against a strong trend.

    Stops, I use the last high, but if the last high is only 2-3 pts above my entry I will give it a little wiggle room(only a few points). Once 10 pts in the profit, I use a trailing stop of the high of the last three bars. You can go long or short with this system. So far it has had a nice win rate(60%+) and the R/Reward ratio is very high, like 2:1 minimum. If I don't like the R/Reward for a trade I don't take it because there will be another one a few minutes later. I don't have set targets, but losses are, and I usually won't take a trade with risk more than 7 Ym points($35 a contract). Let me know what you think, and if there are any backtesting wizards around maybe you could give it a whirl.

    I posted a pic with three trades from today, two ranges and a pullback. First two are the ranges. I didn't post exits. Go long above green line and short below red.

    I try and only trade during decent volume periods.

    Remember this is a very short term system, so don't expect too many big winners, although you will have some. It does hit a lot of singles, though.

    The times on my chart are PST, three hours behind NY time.

    There, I posted a method. :)

    I'll be gone for a while so if you have any Q's I won't see them for a few hours.

    Don't forget to vote!