No guy can ch all of the fluctuations....Jesse Livermore....
FRACTALS/HYBRID:trading system in a trading system
Generally, high win rate(high win:loss) tends to include reduced risk/reward; or vice versa: the greater the risk/reward the reduced the win rate.
A trading system which unite win/loss of about 60% along with a regular 8R into 20R(r/r of 1:8 or 1:20) are extremely rare, if they even exist in any way. That's my small observation relating to trading.
AXIOM: Any machine using a tall R/R ratio should use a greater timeframe for setups and reduced time frames for entry. The larger the differential, the better.
Now, how does one take care of this bad win:loss ratio which plagues such a system.
You will find other solutions, of course. However, would be to combine/hybridized a system on a lower time using a trend trading system of time frame. In other words, enter the entry point of your scalp(1mins into 15mins), but use the PT of this trending trading system(H4 to weekly). In case the system features the tendency system, 60% and above; and a decent win/loss of state has a decent win/loss of state 60% and above. We are in business. Of course, there is going to be a dose of breakevens, this really is the character of the monster. It is essentially a trading system in a trading system. A hybrid vehicle. This is ideal for high risk/reward, of say, 8R or 20R using a win rate of 60%. It's risking around 4pips to 15 pips to make 100pips to 243 pips or higher.
Trend trading breakouts for my high time frame egy has this structure.
Http://www.forex-mail.com/images/trend1.png
The greater time frame methodologies are: swinging/wave movements and polygonal breakouts on the daily frame using lower 1/8th or 1/4th b-p-c. (BREAKOUT - PULLBACK - CONTINUATION). I am sure that there are others, but these are the ones that I personally know to result in 60% gain rate or greater.
For Your scalping method: One trading method which I found to have at least 60% success rate at 1min to 15mins time frame are ascending or descending triangle breakout, which ran, pullback, and then continue in the direction of the breakout. With entrance in the reversal candle in the bottom of the pullback.
From my private study, I notice this method works in all time frames. Lets called this by acronym: TBPC
As such, the combination of both:using the greater time frame trend trading to place the PT and the lower timeframe TBPC to place the entry yields a top win:loss with a 10 to 20 r:r.
This is the frame. There's not anything groundbreaking here. It's simply a combination of two practices. I will begin posting live pops
IN A NUTSHELL:
All these systems are simply little variations of the same thing.
(1)find a strong, simple system on a greater timeframe that has a good win/loss of 60% or greater; using a 1:1 to 1:3 r/r
(2) find a simple, robust system onto a LOWER TIME FRAME with a good win/loss plus an adequate r/r of state 1:1 to 1:3.
(3) merge the two together. When using the TP of the time frame for exit, use as your entry the time frame methodology. Sometimes, it is the system in the 4hr or daily timeframe that is currently replied on time frame that is 1mins or a 5mins, inside itself. That is the way I understand to obtain an adequate win/loss ratio using a decent R/R of state, 1: 8 to 1:20(especially, if the installation is monthly or weekly, and the entry is 1 or 2 5mins.) . Of course, breakevens increases. And win/loss drops because of 1mins' sound. . .that is the reason why I look far away from news.
(4)Use only price action. Trade with the trend. Avoid news.
__________________________________________________ _____________________
__________________________________________________ _____________________
ADDENDUM: helpful threads that I adapted from:
Assembling an equity millipede
Trend Trading All Pairs
Central Banks Big Players
Trading with Deadly Truth
DanUK's Advanced Trend Trading Strategy
My method of trading by Employing trend line , BL line febo level