(1)Between scalp lines you don't do anything... you just wait.
This method of trading usually gives 1-3 trades per week. That's all the trades you really need to be a successful forex trader. But if you want more trades you can trade other pairs, or other systems.
You should probably check for new lines every day, but you don't have to. Once a week, or every couple of day, would be fine if that's all you can do.
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(2)I use a 5 pip buffer past the actual scalp line on my pending orders.
I don't really worry about fakeouts too much, because if you do get caught in one then later when the actual break happens you make your lost money back.
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(3)You are not confusing the rules, it's just that the "rules" for this system really aren't rules at all. This isn't one of those systems with set-in-stone, buy "when x crosses y" rules, you have to use your own judgment a little.
In fact, sometime I'll trade lines that Nick doesn't like, and sometimes he'll trade lines I don't like. We agree 95% of the time, but there are quite a few scalp lines that are open to the individual traders interpretation.
I trade scalp lines like 158.57 all the time. And so does Nick! According to Nick's blog he traded two scalp lines last week that only had 7 candles between them.
I know "use your own judgment" isn't the best answer, especially for a person that's new to this trading style. My advice is that if you don't like a particular line then don't trade it, but do watch it when it breaks so you can learn how things move.
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(4)once a line is broken it's gone, unless it's a small break (5 pips or so) that turns into a bounce away from the line.
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(5)Scalp lines can be taken with pending orders, but I wouldn't do S+R breaks with them. I do those manually depending on price action. I want to see a price spike immediately after the line break before I'll enter an S+R line break.
The reason is that S+R line placement is more subjective than scalp line placement. Not everyone's line is going to be in the same exact place like a scalp line. You need that price action confirmation before entering
(6)(1) Ref to Nick's post: GBP/JPY moves roughly 200-300 pips per day. In the past 24 hours it moved over 400 so it is very possible that its getting exhausted.>>>> Where can I get ADR? Can I put ADR on chart?
(2) When you enter at 4H chart, will you check other Time Frame for further confirmation to exit?
(3) How do you know the mkt is in High/low/med volatility?
Ans: I've attached an MT4 ADR indicator that someone else posted on this thread. I'd like to give them credit but I saved it on my computer and now I don't remember who it was. Whoever you are, thanks for the indicator!
I never look at lower time frames. 95% of the time I'm looking at 4H charts, and the other 5% I'm looking at daily charts.
I judge how volatile a market is by it's ATR (or ADR, if you prefer). Take a look at this chart with an ATR(14) indicator on it. It's a daily chart zoomed way out to give you an idea about the overall market conditions right now. As you can see, the last part of 2008 was really volatile, while most of 2007 wasn't. Right now we're seeing medium ATR's which show that normal market conditions are returning.
Of course you can zoom the chart in to compare individual days to each other, this zoomed out version just gives an overall picture.
Things may come to those who wait, but only the things left by those who hustle."
Abraham Lincoln
