Einstein Line - Learning to Scalp

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Jhx
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Re: Einstein Line - Learning to Scalp

Postby Jhx » Sat Nov 30, 2019 3:06 pm

TheRumpledOne wrote:Are you taking range into account?

Also, what is your step-by-step trading plan? Let's make sure you have all that you need.


This is my step-by-step trading plan:

1) Einstein Line at the same hour every day on the G/U (triggers are at 1.5x spread, which is usually about 3~ pips).
2) Trade the same amount of hours every day.
3) Entry only at the triggers, no filtering trades.

Exit playbook:

1) If I enter the trade and price goes against me, wait.
2) If a candle closes in the other end of the zone (ie: going long and a candle closes in the lower zone), wait.
3) If the next candle closes lower than the previous candle's low, exit.
4) If the next candle doesn't close lower than the previous candle's low, stay in the the trade until price crosses a previous candle's lower wickzone, then exit. (if this trade made it back again until entry, then stay in the trade as normal).
This is for longs, do the opposite for shorts.

If I enter the trade and price goes my way (my way = price already went through the spread of the entry, meaning I'm now in profit), wait until:
1) a turn trade in the opposite direction.
2) a candle in the opposite direction that crosses the last 2 previous candle's low.

I don't know if being so specific without getting too complex will do more harm than good, but we'll see. To be fair this week I exited trades based on what I saw within a candle or something else. Not saying it's the best way to exit but I don't know if I can really write it in a list (sometimes it was based on candle size, a quick spike, a wick looking left), and I don't know if it's the same thing all the time, or if it should be.


------


I don't want to make things extra complicated, but I can't really find a way to use the range in a way that doesn't "filter out" trades.

I could check the current daily range and look for the frequency distribution of the daily ranges and the ones that happen 70~80% of the time, and that gets easier when trading away from the open (expansion) or extremes (reversals), but my zone can be anywhere, or at least that's what I see when I look at my Einstein line throughout November. Or maybe I could use the H4 / H1 ranges for targets or avoid exiting too soon? I don't know yet.

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Re: Einstein Line - Learning to Scalp

Postby LeMercenaire » Mon Dec 02, 2019 2:00 am

Jhx wrote:I'm looking at the average daily range for something that makes sense to me. If I add another one I end up getting a conflicting bias (ie: If the daily is green and below the average and the weekly is green and above the average).

I was looking at the charts from this month and I see that with ranges it's not so much about the direction that it might go, instead, it seems to be more about the amount that it might move before going into the other direction. If price is below the average I can scalp either way, but there might be a bigger move towards one direction (and if price is above the average the bigger move might happen in the opposite direction). Of course, as long as I'm willing to wait for that move.

---

I need to write this down so that it makes sense to me. Nothing new and probably common sense.

- Which way is price going now? The way it's crossing the line.

- I'm trading away from a line (the Einstein Line). I place this line at the current price, at the same time every day.

- What chart am I looking at when I'm trading? The M1 chart.

- I'm trading for a couple of hours every day and my trades last minutes between entry and exit.

- Does it make sense to look at monthly ranges if I'm holding a trade for only a couple of minutes? Not really. But I might get some use out of the daily range. Why? Trades usually last minutes (I close the trade when the exit conditions happen), but if I attempt to scalp and those fail (resulting in some smaller losses), I could then look at the daily range and be patient for a bigger move towards one direction. Why not just wait for that move instead? Because a small move (scalp) might be more likely.

---

I'll post my step-by-step trading plan soon (hopefully it's not that bad :lol: )


I love seeing a trader begin to put it all together! :)

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Re: Einstein Line - Learning to Scalp

Postby TheRumpledOne » Mon Dec 02, 2019 2:14 am

Range is not for filtering trades. Use range to determine when you should start thinking about taking profit.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Re: Einstein Line - Learning to Scalp

Postby Jhx » Mon Dec 02, 2019 7:00 pm

So, the other day I was thinking about how would I handle specifically this type of scenario. Day starts off with whispaws and no chance to grab profit. So the first loss for -8 where I (according to my rules) couldn't exit sooner. Then -7, -5 and -6.2 for a total of -26.2 net pips. Now that may look awful (and it very well might be :lol:, get's a little bit better later on though) but it's ok, part of my rules were that I would take the trade at the line.

GU-12-2.png
GU-12-2.png (38.7 KiB) Viewed 175 times


Anyway, daily range is at 30~ pips right now and it has been above 40 pips 100% of the time for the last 100 days. So that's what I'm looking for now.

I enter long and I'm going after the range. Of course it could be less than that, but if it happens to be 40 or more then it's more likely to be in the direction of the daily candle color (given that I'm already at the US session and otherwise it'd have to go all the way down to today's low and then keep going down).

I'm going to be patient now and wait and not exit at the first sign. Once price gets to the range I'm going for, then I'll exit on a turn trade going down (best case scenario I grab more pips, worst case scenario I exit with a little bit less). I exit for 10.5 pips.

Then 2 quick entries for +4 and +1.5. I exited these because price started wiggling heavily and I just didn't want to have a large red candle and go into the negative again.

It's not that I'm necessarily "breaking" my exit playbook rules, to be honest I'm trying to build one. For example, if I just exit at the turn trades around my entry I will find myself just cutting trades short just to get in again more often than not. I don't want to "curve fit" my exits based just on what happened today, as I don't think there's a "one size fits all" kind of thing, but I don't think the overwhelming "if this then that but if that then this other thing BUT only..." is the solution either. This obviously needs more work.

So, all in all: -10. There were no aditional trades but I would've probably quit after that last one since I was starting to get a little brain-foggy (realizing that I need to work on the exits, find a sweet-spot between being patient and not stupid :lol: , etc.) . Still, all is well :D .

---

Some aditional observations:

Ranges:
- For the daily range looking at the frequency distribution might be more useful to pick the higher % occurence. I'm starting to trust these numbers.
- For H1, probably the most optimal way would be to run the frequency distributions for my session/s (because currently it's factoring the hours from the Sydney / Asian sessions where there's not much movement) but the average would be giving me a good number to work with I think, maybe because the smaller candles even out with the larger ones. I'm seeing that it hovers around or surpasses the average often. I see how I could use the H1 ranges for exits within the first hour but it's less clear later on if the H1 candles open above / below my zone because I could be having a trigger towards the H1 open when the H1 range still is below the average (I don't know if I'm doing a good job at explaining it lol).

Exits:
- I need to give room for price to range, I might be too focused on cutting losers early but I find myself just fighting out price sometimes.
- I find the exit at the turn trade to be alright but only once the ball gets rolling. I don't mind leaving pips on the table but it kinda feels like shooting myself in the foot if I close it with a smaller loss just to re-enter again.
- The reasoning behind starting to look for an exit when (for example) price closes below the Einstein line was: if I'm long and price closed below the line I'm trading away from, therefore price is going down and I should be looking to exit. It could be that I'm overcomplicating it, maybe I should just close it at the other end of the zone or when it closes in that area, but even at 1.5x spread that could very well be the same candle or the next.

Entries:
- It can happen that I trade against the H1 candle color if it opens above / blow my zone and a trigger happens before the hour closes. This isn't in my rule but I recall this being said quite often throughout the forum (don't trade against H1). In the first hour I'm always trading with the H1 candle color because it happens to be the same open.
- If there's a clue looking left to avoid a bad entry then I'm not sure what I should be looking at.
- I had checked the D1 and W1 colors in relation to where the zone is and if I recall the weekly open was good to trade away from it. The D1 not so much but maybe because I wasn't taking range into account. Maybe I need a way to easily establish a bias within my plan and trade only in one direction for the day. I was hesitant to do it like that because some days I wouldn't even trade (would've been 2 last week).

---

Sorry for the wall of text to whoever is following the thread, just putting the process out there.

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Re: Einstein Line - Learning to Scalp

Postby TheRumpledOne » Tue Dec 03, 2019 7:05 pm

No need to apologize. Keep at it!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Re: Einstein Line - Learning to Scalp

Postby Jhx » Wed Dec 04, 2019 4:11 am

Today I started the day with a long trade, reversed, exit with only a 1 pip loss, and then I stopped with the thought that I really do not have an exit playbook yet (or not something that I can work with), and that getting reversed on the first break has happened several times. And it may have to do with the way the H1 ranges (or most candles for that matter).

GU-12-4.png
GU-12-4.png (61 KiB) Viewed 109 times


This is what I mean. It does break, for not nearly enough, and then reverses, yes it can reverse again but more often than not a wick has to form before "expanding" into the range. I just placed the overlay of H1 candles to see if I was missing something.

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1stfailed-2.png
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1stfailed-3.png
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Some other observations from today regarding ranges:

h1-ranges.png
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h1-ranges-2.png
h1-ranges-2.png (51.29 KiB) Viewed 109 times

h1-ranges-3.png
h1-ranges-3.png (43.26 KiB) Viewed 109 times



I don't know if I can use any of this to start building an exit playbook or to avoid potential bad entries. I try to keep it as simple as possible but if I take every single entry and don't have a proper exit plan I end up burning myself #-o

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Re: Einstein Line - Learning to Scalp

Postby Jhx » Wed Dec 04, 2019 1:12 pm

Well this isn't how the days have been usually starting, for me at least. By the time the entry was happening the daily range was around 80~ pips (which happens about 56% of the time, then the stats start dropping). I could've entered and exit at a turn trade for 5 pips but then again, price had just went over both triggers 5 minutes ago, so I don't know if it was being rejected from one place or another, or if that matters.

12-04.png
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Daily range now at 115 pips (somewhere between 30% and 27% of time for the last 100 days), and the last H1 bar had a range of 41 pips. Price might not even come back to the zone. Oh well :lol: .

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Re: Einstein Line - Learning to Scalp

Postby Jhx » Wed Dec 04, 2019 3:46 pm

Of course this is more than an ideal scenario and doesn't happen all the time :lol: . But maybe there's something to look for with highs and lows?

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Re: Einstein Line - Learning to Scalp

Postby Jhx » Wed Dec 04, 2019 3:49 pm

Looking at yesterday (just talking to myself :lol: )

hl.png
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Re: Einstein Line - Learning to Scalp

Postby TheRumpledOne » Wed Dec 04, 2019 6:12 pm

KEEP IT SIMPLE...

Trade what you see!!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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