This includes an introductory video to the forex 5 minute scalping strategy that I’m starting to trade during the European/London session. Short videos will be posted to this website.
The videos will show the trades made with the system. Make sure you subscribe to the channel! A full copy of the strategy is available for newsletter subscribers, so sign up on my website.
My current trading strategies are for higher timeframes than 5 minutes so I’m new to scalping. However I’ll bring my experience from successfully trading other timeframes to this new strategy to accelerate progress towards it becoming a highly profitable strategy contributing to my lifestyle goals.
The European/London session is in my late evening. I’ll be trading whenever I can but there will be days when I’m otherwise committed. This system may suit the US session too. I’ve chosen the earlier session since it’s in a more practical time zone for me. I don’t think the ranges are big enough most days for this system in the Asian session.
I went in search of a scalping trading system on the internet, found one and have changed it to suit my preferred style and what I think will work. I very much encourage your comments and input along the way.
We’ll be starting this trading journey together from the very beginning. The strategy will evolve over time, but the first goals are:
- Trade on a live account. Demo accounts provide a false sense of security because they usually don’t replicate slippage on a live account. If you get slipped 1 pip on a trade when you’re looking for a 10 pip target, that represents 10%. It’s much easier to make profits on a demo account. Since I’m looking to increase the amounts I put on the strategy as it develops, I want to trade it under the same conditions as I will going forward.
- To get a sample of 50 trades so I can draw some conclusions about its profitability and look for ways to improve the strategy (if any).
- Trade a position size small enough that I’m comfortable to invest in the strategy to achieve the sample size. Although I’d expect to win on some trades, with a new strategy I like to assume 100% losses and be prepared to lose that amount. By accepting a full loss on all trades it’s psychologically easy to keep trading for the full 50 trades without pausing or feeling uncomfortable.
To start with I’m going to “invest” NZD 2,500 into developing this strategy. I’ll trade a 1% position size which will be NZD 25 per trade on Day 1. Assuming I lost NZD 25 on every trade, I’m preparing to lose NZD 1,250 to get a sample size of 50 trades. I think of it as a strategy development cost. You can also treat it as the cost of training. You’ll be a lot wiser at the end of it.
By using money management I’ll actually lose a smaller amount. If net losses are made, the amount per trade will reduce accordingly.
Your thoughts on system development:
- What process do you go through to develop a trading strategy?
- What challenges do you face with system development?
- What strategies do you have in place to work through system development issues?
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About the Author: I’m Rachel Hunter, TraderRach, a Forex Trader who helps traders achieve the life they love with forex. Be strategic and design your trading business for sustainable success and have fun! That’s my mission. Join many traders’ gaining the edge with “10 Powerful Lessons for Forex Trading Success” plus other goodies. Years of precious learning specially packaged up for you. My background before trading is as a Chartered Accountant and Chief Financial Officer. I know what it takes to make a trading business rock on. It would give me great pleasure to make a difference to your success.