Trading Strategy TMT Scalping System - intraday scalping
Hello, comrades forex traders!
Today we will analyze an interesting intraday forex strategy TMT Scalping System. On foreign forex resources, this indicator system for scalping is gaining more and more popularity, and it is time for us to get acquainted with it in more detail, having examined all the nuances, strengths and weaknesses of the strategy on the pages of our blog.
TMT trading strategy is in demand both among experienced traders and among beginners, due to minimal losses when trading on small timeframes and the possibility of reaching a plus at the end of the day due to a large number of transactions. Well, is it really so, we learn from our today's material.
TMT Scalping System Strategy Features
Platforms: MetaTrader 4
Currency pairs: any
Timeframe: M5 - H1
Trading time: around the clock
Recommended brokers: Alpari, RoboForex, TickMill
The idea behind the TMT strategy
The trading system is based on the principle of trading in the direction of the daily candlestick trend, so the working timeframe is limited to H1. The lower bar of the time interval M5 puts the strategy in scalping mode, significantly increasing the number of transactions.
Any currency pairs can be used, but it is best when using similar strategies to focus on trending ones, in which there are movements, first of all, on majors.
The TMT strategy can be applied around the clock, but European and American sessions are recommended. The Asian session has less movements, and this time is less often used for scalping. Also, the trader should be prepared for additional losses due to flat in the second half of the American session and in the Asian session due to the effect of the “safe haven”.
Important advantages of the TMT Scalping System trading system:
- The ability to use various trading tools;
- The system of filters for false transactions;
- The tactics of entry on pulses allows you to get a “profit margin” from the first minutes of trading.
TMT (stands for Trend - Momentum - Trendline) is a trending scalping trading system based on a combination of two trend indicators and two oscillators. The former determine the current daily trend, the latter determine the pivot point in its direction after correction. To confirm it, the strategy additionally uses the breakdown of the trend line of the local correctional movement, for the detection of which graphical analysis is used.
The TMT strategy includes one more pair of auxiliary, information indicators, the first of which displays the candle of an older, daily timeframe, the second transfers significant horizontal levels built on charts of time formats from MN1 to H1. This allows the trader to more accurately navigate the installation of stop loss and take profit.
Install TMT Scalping System
TMT Scalping System strategy files can be downloaded from the link at the end of the review. The installation of strategy components (indicators and templates) in the MetaTrader 4 terminal is carried out according to the universal method described in the article on the site.
The strategy is added to the chart using the TMT New template, through the right-click menu, or using the “Template” option in the quick access toolbar. This will look like the installed vehicle in MT4:
Indicators of the TMT Scalping System trading system
The following main indicators are displayed on the chart:
- Two moving averages EMA with periods of 20 and 7, determining the direction of the local trend within the day;
- Two modified oscillators: MFI (Money Flow Index), compiled by tick volumes, and RSI. Unlike the usual view, indicators give 4 types of signals with the color of the histogram column: up, down trend, overbought (at the intersection of level 80) and oversold (at the level below 20). Level marking is hidden.
The graph automatically displays:
- Support and resistance levels of higher timeframes, recommended as a place to set stop loss and take profit;
- A daily candle that displays the current trend direction on D1 in color.
The direction of trade is determined in accordance with the trend of the candle D1. Therefore, keep in mind that it can change during the session, especially at the beginning of the day. Trading signals are determined by indicators and the trend line of the price channel, used as an additional signal filter.
Short entry conditions:
- The current day candle is red;
- A red bar has formed on the FxGlow RSI Filtered indicator;
- A pink bar has formed on the FxGlow MFI Meter;
- The blue moving average is below yellow (the trend of the current TF is directed down);
- The price has rolled back to the area between the moving averages from the bottom up.
When these conditions are met, from the lowest minimum on the left, draw an inclined trend line and wait for its breakdown.
We protect the open transaction with a stop loss set above the nearest local maximum or resistance level indicated by the TMT indicator.
Conditions for entering the long:
- The current daily candle displayed by the indicator is green;
- A blue bar has formed on the FxGlow RSI Filtered indicator;
- A blue bar has formed on the FxGlow MFI Meter indicator;
- The blue moving average is above yellow (the trend of the current TF is directed upwards);
- Price rolled back to the area between moving averages from top to bottom.
After these conditions are fulfilled, we draw an inclined trend line from the highest maximum and wait for its breakdown.
Stop-loss is placed at the nearest local minimum or under the support / resistance levels displayed by the strategy indicators.
Building a trend line in the TMT Scalping System strategy
A trend line is drawn by a trader after a candle's closing price falls into the range between the moving average EMA. Its beginning always coincides with:
- The local maximum for a long deal;
- A local minimum for shorts.
The second point of constructing the trend line is the maximum or minimum selected from a series of candles facing a candle with a closing price in the area between two exponential moving averages (EMA).
The choice of stop loss and take profit TMT Scalping System
The strategy has an indicator that automatically transfers support and resistance lines to the chart, starting from the M15 timeframe and up to weekly candles. These are auxiliary benchmarks for the trader, allowing you to reduce the likelihood of a stop loss triggering, or close the deal in profit before reversing the quotes for correction.
A standard measure to limit losses is a stop loss, which should be between 10 and 20 pp. Take profit should be 1.5-2 times the size of the estimated loss in order to maintain the overall profitability of the system.
Money Management Strategy TMT Scalping System
The size of a trading lot can be calculated on our website in the Tools -> Calculators -> Lot Calculator section. As a rule, an investment in a transaction should not lead to losses greater than 0.5%, maximum 2% of the total deposit in your account when a stop loss is triggered.
For clarity, below we have compiled a table with the sizes of the lot, deposit and the corresponding type of account with a broker. Stop loss, by default, is 20 points, the risk per trade is 1%.
|Account type||Minimum lot||Min starting deposit||Brokers Examples|
|Cent (with mini lots)||0.01||$ 2 (200 cents)||Forex4you|
|Cent||0.1||$ 20 (2000 cents)||Roboforex|
Examples of transactions for the TMT Scalping System strategy
Example No. 1: the TMT Scalping System strategy indicator drew a green afternoon candle - this is a signal that all transactions will go only into purchases.
The fast moving EMA 7 crossed the slow EMA 20, fulfilling the first condition of the strategy. The second condition is the rollback and closing of the price in the area between the moving averages occurs after 30 minutes (6 five-minute candles), after the intersection of the indicators.
We draw a trend line of resistance at the local maximum on the left, through the second extremum of the correction candles. It falls on the candle, which gave a buy signal at the closing price between two EMAs.
We are waiting for the breakdown of the local resistance, but the entry point is determined by the confirmation of the pulse by the MFI indicator (blue column) and the oversold zone RSI (turquoise histogram bar). On the chart, this is point 4, where purchases must be protected with a stop loss located two ticks below the nearest (left) local minimum.
We set the take profit in the horizontal resistance zone (these zones are indicated on the chart by a red dash-dot line).
Example No. 2: the entry into sales determined the red color of the indicator of the daily candle, which is confirmed by the position of the fast EMA, which was below the slow moving average.
Despite a strong drop, there are no recoil trends, and after 7 candles of the 15-minute timeframe, the price closed slightly above the lower moving one, which allowed us to get the second signal according to the strategy.
We draw the inclined support and wait for its breakdown, which occurs almost immediately, so we pay attention to the signals of the basement indicators MFI and RSI. Pink and red color indicates the coincidence of all factors for sales. Having opened a deal, we set a stop loss behind the nearest maximum of the candle.
A strong trend is the danger of a correction, which is indicated by the yellow MFI column, upon the appearance of which we do not have a “profit margin”, so you can look for an opportunity to close the deal at the entry price, which is provided to us in the next 15 minutes. We close to zero and exit on time, as further price growth and the coming flat show.
Example No. 3 shows that the strategy allows you to hold a position for a long time with a strong trend.
During the Asian session, a confident uptrend was formed, which allowed us to enter the long morning, after the falling candle (1) closed between two EMAs, quotes turned upwards, breaking the trend line (2), and the MFI and RSI histograms gave “color signal ”(3).
In this example, the stop loss was transferred from the local minimum closer to the entry point, thanks to additional TMT strategy indicators, which transfer the support and resistance of the higher time frames to the current chart. After waiting for the two candlestick closing prices to fix above the TF support level of M30, we moved the stop loss line almost to breakeven.
Despite the intention to hold the position until the change of trend using a trailing stop, the deal was closed for profit with hands at the resistance level of M30, which almost coincided with the same line at M15 and two overbought indicators of the MFI and RSI oscillators.
Such a number of reversal signals led to a correction, but did not break the daily trend. Therefore, having received three basic signals, we enter the long once again, but now we set the take profit immediately - due to the proximity of resistance to the M30 TF.
TMT Scalping System is a fully functional system that is suitable for both experienced traders and beginners.
For beginners, it is interesting, first of all, for its simplicity, but it is worth remembering the ratio of risk to profit, and that you need to tie goals and stops to important levels of support and resistance.
For experienced traders, the system can offer the possibility of flexible individual settings without any rigid framework. It allows traders to add additional indicators and apply their own ideas to improve trading. Each trader is based on their own money management and sets entry / exit points from positions based on their own risk management.