I spill my guts on our top trading algorithm

I spill my guts on our top trading algorithm

9 August 2019, 22:16
Cutting Edge Forex LLC

Right here and now I will describe in detail the inner workings of the black box algorithm used by Cutting Edge Forex to power multiple #1 selling scalping robots at the MQL5.comapplication marketplace.

After years of trading high impact news releases my team and I noticed a pattern. Breakouts on a small enough time-frame almost always retrace to stop out the retail breakout traders. There was an opportunity presented. Design a system that is one step ahead of the retail traders thinking. We know we can't beat the high speed traders to the breakout trade and we know the early breakout retail traders almost always get stopped out. So we developed a very simple, beautiful and consistent scalping algorithm to trade the reversal -or- the move that takes out all the retail trader's (breakout traders) stop losses.

It works like this.

  1. The initial breakout happens to the upside on the 1 minute (tick chart actually) time-frame.

  2. Instead of buying with the rest of the crowd, we anticipate the smart money will move to take out the small stops placed by the breakout traders. We place a Sell Stop Order 2 pips below the current price.

  3. If the breakout continues for the very short term, we will modify -or- trail the Sell Stop Order below by 2 pips.

  4. Our Sell Stop is filled when the price begins to retrace (on the way to take out the breakout trader's stop loss).

  5. We manage the trade and most often profit a few pips. Losses are small.

  6. If price retracement doesn't happen after 20 seconds. We delete the entry order and wait for the next trading opportunity.

Here is a very short YouTube video where you can see this very algorithm at the heart of a complete trading system.

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