LBR Three Ten Ocillator Scalp

[Alealokato]

This is a very simple strategy. It can be used with no indicators at all. I'm sure that many experience Baby Pips Members use it very effectivelywithout these indicators. The idicators are useful to me in that they help me not overtrade and be patient in waiting for the correct set up.

The method is simply entering trades on pullback within a trend.

This system can be used on any fx pair and any timeframe, but the main focus is 15 minute charts to scalp 20 pips or so depending on the pair. Scalping this method can lead to longer trades periodically. My purpose is to share this indicator with the hope of fine tuning it and learn from other traders.

LBR stands for Linda Bradford Raschke. She invented this oscillator which is really a modified MACD. You can find out more about this indicator by searching the web.

I use ThinkorSwim for my charting and trade on FXCM.

Indicators
MACD set at 3, 10 16 SMA
RSI set at 5, 70, 30 Close
Donchian Channels set at 14 with mid line
SMA 21
SMA 50

Timeframe 15 minute

sell Signal

First I look for a good slope. I like to see the 50 above the 21 sma for a short trade. Then I watch for a pullback or retracement. I like to see the RSI 5 show overbought above 70%. The 21 period SMA should move closer and even cross the 50 sma. The price bars should move up to touch or cross the 50 sma.
I like to use the Donchian Channels to help set stops and entries. Often a good point of entry is the center Donchian Channel.

For a short trade I like to see the slow Oscillator (Pink) rise above the 50% line on the MACD/LBR and then fast line (Blue) cross down below the Pink line. This down crossing of the LBR and the prior overbought on the RSI is a strong and dependable trigger for a trade.

Buy Signal

First I look for a good slope. I like to see the 50 below the 21 sma for a long trade. Then I watch for a pullback or retracement. I like to see the RSI 5 show oversold below 30%. The 21 period SMA should move closer and even cross the 50 sma. The price bars should move down to touch or cross the 50 sma.
I like to use the Donchian Channels to help set stops and entries. Often a good point of entry is the center Donchian Channel.

For a long trade I like to see the slow Oscillator (Pink) drop below the 50% line on the MACD/LBR and then fast line (Blue) cross up above the Pink line. This up crossing of the LBR and the prior oversold on the RSI is a strong and dependable trigger for a trade.

Notes

There are probably additional ways to use the LBR and it would be great for interested members to share ideas. I always review longer time frames in confirming trends. I stay away from sideways action.

My favorite trade is with 2 contracts, one with a targer that is farther out. If the first contract hits at about 20 pips then I may move the second contract to BE.

I find the most succes with the NZD/USD and the AUD/USD as to me they tend to trend best for this strategy. Risk reward is about 1 to 1. Win rate is very good, about 70%. But the trader needs to wait for the correct set up. I have included a recent trade. I will try to answer questions if there is interest.

[AdriennHar]

Hello Greg,

Looks like a good strategy. Will set up the charts and see how it performs.

Will post my trades too

DD

[AlmoPa]

Thanks, be sure to observe a good slope. The last example had an excellent angle. Traders have used this method with only the sma's. These additional indicators helps me identify good trade opportunitites.

[Antanykki]

Hello Greg,

I have set up the indicators as per your recommendations. But somehow it does not seem right. The MACD looks different. RSI looks different

DD

[akaduxau]

Hi!

I enter in corrections too, with other indicators but with similar plan. Check your red line (SMA21?), seems a good place to stops. Perhaps an exit about 50% of the position in your defined exit point and other 50% with a cross below/above red line will let you additional profit. Sure you can check it in your trading log and tell us if it works.

Have fun!