The Super Scalper

Strategy
by Cecil Robles
www.yourforexmentor.com

Feel free to pass this report along to your friends!

The Super Scalper Strategy

You are going to love this strategy. Why? Because it works and it is super simple. So lets get
started.
What is scalping? Well most trader would define scalping as entering and exiting the market
very quickly for small price gains. I have a little bit different of a definition.
Most of the strategies that I use dont use targets. I let the market tell me where to get out. In
other words I usually go big or I lose. It works out well for me. However I know a lot of traders
cant grasp this kind of trading right off of the bat.
I am a risk taker and I know it. That is my personality. As such I dont require knowing the
outcome of a particular trade before I take it. But most traders are not this way.
But the Super Scalper Strategy does use targets and it can be traded on the 189 tick chart and
above. That means that you can use the 1 minute, 5 minute, even the 240 minute (4 hour) chart
and make some quick profits.
As you probably already know Im not one to fluff it up so lets get right to it.

The Indicators
We are going to use three main indicators in this strategy.
1. Slow Stochastic with a setting of 8,3,3 applied to the High, Low, and Close price. The
overbought is set to 80 and the oversold is set to 20. Ive taken a screen shot so that
you can see the exact setting.

2. 34 Period exponential moving average applied to the close price. Here is a screen
shot:

3. 8 Period simple moving average applied to the close price. Here is a screen shot:

4. There is a fourth tool that we use. Fibonacci Retracement. I only use the 38.2%,
61.8%, 78.6%, 100%, 127.2%, and 161.8% fibs. You can make those the defaults if you
like. Here is how mine look on the charts.

I am using the Think or Swim platform to demonstrate these examples, but you can use any
platform you want. You will notice that I have made my moving average lines display as dots on
the chart.
Now lets get into the actual strategy.

The Strategy
The key premise behind this strategy is to trade only in the direction of the trend as we identify
it. This is going to ensure that you only take the best trades and that you dont get whipsawed
back and forth.
So first lets talk about using this strategy on lower time frames. When you are trading this on
anything below the 60 minute chart you need to trade it during the peak market hours.
Since the Forex Market operates on a 24 hour time frame, it is important to understand the
actual workings of a market day. This information is freely available on the internet, but we
have compiled it here for your convenience.
Since very little trading takes place over the weekend, and there is no start or end time for a
Forex market day, it is best to break the trading day down into three sections:
1. The Australian Session, which includes Australia, New Zealand, and Tokyo;
2. The London Session; and,
3. The New York Session
These sessions coincide with each respective countrys stock market sessions. The chart
below gives you an idea of how the sessions relate to each other.

The first thing notice is that from the New Zealand open to the New York close, the entire 24hour day is covered. Moreover, you can see that the Australasian session has three stock
markets open at the same time, with the last hour of the Australian and Tokyo sessions (3:00 to
4:00 AM EST) coinciding with the opening hour of the London session.
Furthermore, the London and New York markets share the hours between 08:00 EST and 13:00
EST. In other words, from 19:00 EST to 04:00 EST, and from 08:00 EST to 13:00 EST, two or
more markets overlap. In fact, the areas highlighted in yellow represent the Forex markets
busiest 14 hours. This is due to two or more markets sharing the same hours. Obviously, when
that occurs, there are more traders to drive up the overall volume and volatility of the market.

So you need to use this strategy during the coinciding market times, trading the correct markets
during that time. This is the first thing you need to make sure of.
For the 60 minute chart and above this is not important. You can swing trade those time frames
any time.
Criteria For Buy Signal
1. The 34 Period EMA must be increasing from one candle to the next (this is visually
easy to see when the line is represented as a dot.
2. The 8 Period SMA must be above the 34 Period EMA on the signal candle.
3. The Stochastic must crossover and begin increasing.
4. The crossover candle must be broken within four candles of the crossover (if the low of
the crossover candle is broken first then you must delete the trade).
5. Your entry is placed above the high of the crossover candle (you need to make sure you
add the spread plus 1-2 pips.
Stop Loss Criteria for Buy Signal
1. Draw a fib retracement from the swing high to the swing low that created the
pullback. There is a screen shot below demonstrating this.

2. If the entry is below the 78.6% but above the 50% then you will use the 23.6% fib
as your stop loss. If it is below the 50% but above the 23.6% fib you will use the
0.00% as your stop loss. If it is below the 100% but above the 78.6% you will use
the 50% fib as your stop. If it is above the 100% you will use the 61.8% as your
stop. This sounds complicated but it is not.

Target Criteria for Buy Signals

1. You will take of your profits at the 127.2% fib and move your stop to
breakeven. You will take the second half of your profits at the 161.8% fib level.
Example #1
Ok... so this is really simple but lets look at a couple of examples.

Okay so let me break this down for you. First, I notice that the 8 SMA is above the 34 EMA. This
means I am only looking for buy signals. Next, I see that the Stochastic has crossed over and is
now increasing. When this crossover happens I want to them look to see if the 34 EMA is
increasing. If the answer is yes then I have a trade.
In this case everything lines up so I do indeed have a trade. I place a buy signal above the
crossover candle. You can see that I have drawn a red box around that candle and you can see
that indeed this is the crossover candle. Now it is very important that you trade this on closed
candles. So it is on the candle that crosses over and closes.
I am trading the 1 minute chart so I place the entry about 0.5 to 1 pip above the high. I place the
stop loss 0.5 to 1 pip below the 38.2% fib. I place the first target at the 127.2% fib retracement
and the second target at the 161.8% retracement.
Target #1 is achieved on the 5th candle (5 minutes later) and target. When that occurs I move
my stop to breakeven. Target #2 is achieved on the 13th candle (13 minutes after the entry) and
I am completely out of the trade.

Money Management
There are a number of ways that you can handle the money management and if you want some
more sophisticated ways to do it you can get my Advanced Money Management course. I am
going to give you the basics here.
The easiest way to do it is to take a percentage risk on each trade. If you are on the lower time
frames (below 60 minutes) I would suggest never going above a 1% risk per trade. Remember
you are going to have a higher number of trades with this strategy so if you have 3 losses in a
row you could easily see yourself 3% down in one day. Even though this is a high winning
strategy (over 70%) it is still possible based on simple probabilities to have three losing trades in
a row.
If you are using this strategy on the 60 minute time frame and above you can risk as much as
2% on any given trade. You will have far fewer trades and therefore this is okay.
Short Trades
I am not going to do another example on short trades in this white paper. You can watch the
video that comes with this and see some short trades.

So that about wraps up the PDF version of this strategy. If you havent already received the
video for it be on the lookout.
If you havent visited our main site www.yourforexmentor.com head over there and check out
the other available resources.
To your trading success,
Cecil Robles

EthosTraders, Inc. Disclaimers & Di sclosure s

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GENERAL RIS KS OF TRADING AND INV ESTING

We believe it is vitally important that you read and fully understand the following risks of trading and investi ng:

SPECIFIC RISKS OF FUTURES OPTIONS TRADING

An option on a commodity futures contract is a legally binding agreement bet ween two parties which gives the buyer, who pays a
market determined price known as a premium, the right (but not the obligation), within a specific time period, to exercise the opt ion.
Buying or selling futures options is not suitable for many people, and you should not trade futures options unless you fully
understand the risks, rights, and obligations of commodities options trading.
1. The futures option, if exercised, will result in the establishment of a futures position. Both the purchaser and grantor of a n option
on a futures contract should realize that the option, if exercised, will result in the establishment of a futures position, subject to all the
risks such contracts carry (see above). The buyer of a call option will be assigned a long position in the underlying futures if
exercised, while the buyer of a put option will be assigned a short position in the underlying fut ures if exercised. The purchaser of an
option should be aware that some option contracts provide for only a limited period of time during which an option may be exe rcised.
2. You may be unable to liquidat e your position because of lack of liquidity in the futures or options market. Exchange trading
mechanics are designed to provide for competitive execution and to make available to buyers and to sellers a continuous marke t in
which an option once purchased can lat er be sold; and in which an option, once grant ed, can later be liquidated by an offsetting
purchase. Although each exchanges trading system is designed to provide market liquidity for the options traded on that exch ange,
there can be no assurance that a liquid offset market on the exchange will exist for any particular option, or at any particular time,
and for some options, no offset market on that exchange may exist at all. In such an event, it may not be possible to effect offsetting
transactions in particular options. Thus, to realize any profit, a holder will have to exercise their option and have to assu me all risks
and to comply with margin requirements for the underlying futures contracts or, in the event of an option on a physical commodity,
incur the costs and risks of holding the physical good. A grantor could not terminate its obligation until the option expired or the
grantor was assigned an exercise notice. You may exercise your option but be unable to liquidate yo ur resulting futures position
because of daily price limits or lack of liquidity in the futures market.
3. Lack of pricing limits on some options. The trader should be aware that an option may not be subject to daily price fluctuati on
limits even if the underlying futures position has such limits and, as a result, normal pricing relationships between options and the
underlying futures may not exist. Also, futures positions assigned as a res ult of an expiring option may not be capable of be ing offset
if the underlying futures contract is at a price limit.
4. Additional risks of writing or granting fut ures options. The grant or of a call option who does not have a long position in th e
underlying futures contract (i.e. a naked sale or short) is subject to risk of loss should the price of the underlying futures be higher
than the strike price of the option, and this loss may exceed the premium received for the initial sale of the call option. T he grantor of
a call option who has a long position in the underlying fut ures (i.e. a covered sale or short ) is subject to the risk of decline in price
of the underlying futures, less the premium rec eived for granting the call option. In exchange for the premium received, the call
option grantor gives up all of the potential gain resulting from an increase in the price of the underlying futures above the strike price
of the option. The grantor of a put option who does not have a short position in the underlying futures contract (i.e. a nak ed sale or
short) is subject to risk of loss should the price of the underlying futures be below the strike price of the option, and this loss may
exceed the premium received for the initial sale of the put option. The grantor of a put option who has a short position in t he
underlying futures (i.e. a covered sale or short) is subject to the risk of a rise in price of the underlying futures, less the premiu m
received for granting the put option. In exchange for the premium received, the put option grantor gives up all of the potent ial gain
resulting from a decrease in the price of the underlying futures below the strike price of the option.
Conclusion: Once again, we stress the import ance of understanding all of the risks of any form of trading or investing that y ou
choose to do. One should fully understand the worst-case scenario prior to trading or investing real dollars. Past performance is not
necessarily indicative of future results. You take full responsibility for all trading actions, and should make every effort to understand
the risks involved.