Scalping with Polynomial Regression is a trading system base on curve regression and MACD.
Setup Strategy
Time Frame 5 min or 15 min.
Pairs: Majors.
Indicators:
1) Linear Regression Channel (i-Regr) with the following settings: degree=3, kstd=1.5, bars=240, shift=0
2) Entry Trigger indicator with these settings: g_period_76=2, gi_80=1, Nbars=1000
3) Colored MACD with settings: FastEMA=5, SlowEMA=15, SignalSMA=1
Buy
1) Look for price to be near the Lower i-Regr band. If it is below or over the band that would be ideal. Sometimes we can open a position without this rule however the system is stronger when it is applied. As the lower i-Regr band represents a momentum support level, there is big chance that the price will retrace and if our other rules are also met, the chance for our trade to be profitable is greater. 2) Look for the MACD indicator to increase it's value, in other words to be colored Green. If it occurs above the Zero line this is an even stronger signal however its not an absolute requirement. 3) Look for the Blue Arrow of the Entry Trigger to appear and then open a Long Position immediately. 4) Set your StopLoss just below the previous low. 5) Set your ProfitTarget at 15-30 pips from entry depending on the volatility of the pair you trade and the timeframe used. If the pair is more volatile, such as GBP/JPY, and/or the timeframe is higher, then you could set a larger takeprofit target. You can your close position manually as soon as you get 5-10 pips of profit if you feel that the price will reverse. It is better to close a trade in some profit rather than losing.
Long Trade Examples
EXAMPLE 1: GBPJPY, M15 3
1) At point "A" we see that the price was below and then moved over the lower i-Regr band and is heading up, meaning that the main trend is heading up. 2) At point "B" MACD is above the Zero line and is colored Green having increasing it's value. 3) At point "C" the Entry Trigger Blue Arrow appeared giving a long signal and so we open a Long position at 135.47. 4) You could set a StopLoss just above the previous low at 135.19. 5) The TakeProfit Target was set 30 pips up at 135.77, where I closed this trade, because I consider the GPBJPY as a volatile pair
Sell
1) Look for price to be near Upper i-Regr band. If it is above or over the band that would be ideal. Sometimes we can open position without this rule however the system is stronger when it is applied. As the upper i-Regr band represents a momentum resistance level, there is big chance that the price will retrace and if our other rules are also met, the chance for our trade to be profitable is greater.
2) Look for the MACD indicator to decrease its value, in other words to be colored Red. If its occurs below the Zero line this is an even stronger signal however its not an absolute requirement.
3) Look for the Yellow Arrow of the Entry Trigger to appear and then open a Short Position immediately.
4) Set your StopLoss just above previous high. 5) Set your ProfitTarget at 15-30 pips from entry depending on the volatility of the pair you trade and the timeframe used. If the pair is more volatile, such as EUR/JPY, and/or the timeframe is higher, then you could set a larger takeprofit target. You can your close position manually as soon as you get 5-10 pips of profit if you feel that the price will reverse. It is better to close a trade in some profit rather than losing.
Short Trade Examples
EXAMPLE 1: AUDUSD,M15
1) At point "A" the price is above the upper i-Regr band and heading down meaning that main trend is heading down. I missed the first signal given by the Yellow arrow at that point, so we wait then for a second signal, which occurred when the price retraced to the upper band near point "C".
2) We see that MACD is below the Zero line and is colored Red at point "B" having decreased it's value.
3) At point "C" an Entry Trigger Yellow arrow appeared giving a short signal and so we open a Short position at 0.9079.
4) I didn't use a StopLoss with this trade, however I could have set the StopLoss just above Entry Trigger Arrow at 0.9090.
5) The TakeProfit Target was set 15 pips down at 0.9064, where I closed the trade.
Download
https://drive.google.com/drive/folders/1Cw960HQjcfrvOcTwRwka95Wj8dO3wztT?usp=sharing
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