Extreme Scalping

The Extreme Scalping tool provides a high-frequency trading framework based on linear regression deviations to identify short-term mean reversion opportunities.

Usage

The strategy identifies potential entry points when the price deviates significantly from a projected linear regression line. It is designed for fast-paced market environments where traders seek to capture small price movements (pips/ticks).

• Long Entry: Triggered when the current closing price is below the forecasted linear regression value minus a specified gap.
• Short Entry: Triggered when the current closing price is above the forecasted linear regression value plus a specified gap.
• Directional Filtering: Users can restrict the script to only take long positions or only take short positions depending on their bias or higher time frame trends.
• Exit Logic: The script utilizes fixed Take Profit and Stop Loss values, which are essential for managing the high turnover typical of scalping strategies.

Details

The script utilizes a linear regression calculation (ta.linreg) to estimate where the price "should" be based on a specific lookback period and offset. By comparing the actual price to this theoretical value, it calculates a "gap." When the price exceeds this gap, it assumes the price is overextended and will revert toward the regression line.

Because of the high frequency of trades, users are advised to manage their backtesting window carefully using the built-in date filters to avoid script calculation limits on lower time frames like the 1-minute chart.

Settings

General Settings

• Source: The price data used for the linear regression calculation (e.g., Close).
• Length: The lookback period for the linear regression.
• Offset: The displacement applied to the linear regression forecast.
• Gap Ticks: The distance (in ticks) from the regression line required to trigger a signal.
• Fixed TP: The target profit amount in ticks.
• Fixed SL: The stop loss amount in ticks.
• Use Fixed SL/TP: Toggles whether to use the specific TP/SL inputs or default values.
• Direction of order: Filters signals to "ALL", "BUY ONLY", or "SELL ONLY".

Custom Backtesting Dates

• Custom Backtesting Dates: Enables or disables the date range filter.
• Start/Stop Year, Month, Day, Hour: Defines the specific window of time for the strategy to execute and calculate performance.

FAQ

How do I interpret the lines on the chart? The middle line represents the linear regression forecast, while the upper and lower lines represent the "Gap" thresholds. Entries occur when the price crosses outside these boundary lines.

Is this strategy suitable for all time frames? While it can be applied to any time frame, it is optimized for "Extreme Scalping," which typically implies very low time frames like 1-minute or 5-minute charts.

How can I access Extreme Scalping? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.