Today we will review another indicator for scalping, known in the traders community as Scalper Dream. In order to prevent confusion, we remind you that this algorithm was originally called PremiumFXScalper by the developers, and its former name became its nickname after a series of successful tests that stuck to it in the future.

When the abovementioned indicator became available to the general public, the idea emerged that it is just another siphon off like most of its peers, because scalping is rightly considered the most difficult style of trading in terms of the use of indicators. But after the first test, one feature stroke the eye – the reaction of the Scalper Dream to the price changes is faster than the many well-known algorithms, including the well-known classics. Before proceeding to the description, we will note a number of organizational issues.

Firstly, the authors recommend using its development on EUR/USD, GBP/USD, USD/JPY and GBP/JPY. In fact, it is not clear why these pairs were chosen, because the indicator works great on metals and exotic currencies – the value of spread is likely to become a criterion for selecting, but today it is not a problem, since in recent years new dealing centers emerge that provide ECN-accounts with a floating spread.

Secondly, it is recommended to trade on M1 and M5 timeframes, which certainly is an advantage, as a rare indicator works correctly on the minute charts. There is also a reservation on the timing of trading: actual signals appear after the opening of European markets and come in during the day until the end of the American session, but the Asian session should be ignored.

Scalper Dream parameters and signals

In terms of settings, this indicator has also surprised, in a good sense of the word, because you need to optimize only the period for work, while all other functions are designed for visual design and simplified position management. In particular:

• Period is the main parameter that determines the speed of the reaction. Accordingly, the smaller it is, the more signals will appear, but on the other hand, the longer period increases the reliability of signals;
• SL_add_pips and TP_distance_pips are additional items to the value of the recommended stop-loss and take-profit in points; 
• Email Alerts – Enable/disable notification of signals to your email. To do this, you must configure the appropriate settings in the terminal; 
• Corner - the location of the info window (0 – at the upper left, 1 – at the upper right, 2 – at the lower left, 3 – at the lower right, 4 – hide the panel);
• Shift – shifting the bar chart of the indicator to the right (positive value) or left (negative) for a specified number of bars;
• Use Alerts – Enable notification of signals. If true, displays the following window, which is further accompanied by a beep:

To open an order to buy, you must wait for the moment when the color of the bar chart changes from red to green, while the trend power value indicated in the informational panel should be more than 65%. By the way, the direction of the trend is automatically detected and indicated as a trend direction. Conditions for sale will be diametrically opposite, i.e. the bar chart changes color to red, and the bearish trend gained the necessary strength.

Scalper Dream causes no problems at the accompanying of the positions. As mentioned in the characteristic setting, the algorithm calculates levels to set stop and profit on its own, and offers its own version as an advice to the user. But most of the transactions are closed under the reversal signals, with no reversal being made. For a better understanding, let’s look at an example to sell:

Obviously, this case represents the historical part of the chart, purposefully “snapped”. Unfortunately, it is impossible in real-time to evaluate the historical evidence for the trend due to the fact that the code does not provide logging. But the algorithm can always be estimated in the manual tester.

Besides, no one stops to set stop-losses and take-profits for their own reasons – in fact, a combination of the expert under review with other methods will be even useful, as it will improve the quality of signals.

False signals filters provided by Scalper Dream

As is well known, and many readers know from their own experience, the main enemy of trending strategies is the flat state of the market. Among inexperienced traders, the following stereotype has formed: “scalpers do not care in what phase the market is now”, that is a fallacy.

Of course, there are systems for pipsing, but this is not true for the strategy discussed above, otherwise what is the module of trend identification provided in the indicator for? Thus, to improve the signal quality and reduce the number of losing trades, you need to add additional condition or indicator to Scalper Dream under the standard technique.

Fortunately, this algorithm eliminates this "headache" as well, because it can on its own identify the dangerous state of the market. It's enough to pay attention to the sequence of bars in the histogram, which at the pronounced trend consistently update extremes, while at the flat each bar is equal to the previous one.

Note that a lot will depend on the timeframe and period settings, as, for example, if you trade on the minutes with the period of calculation of the indicator equal to 5 minutes, the flats won’t practically appear, and, on the contrary, on the 5-minute with a prolonged period of calculation, the flat will be a frequent enough phenomenon. An example of this situation is presented in the figure below:

Therefore, it is sufficient to identify experimentally the duration of the average timing corridor between the end of the trend and the beginning of the flat, and then use this data as a filter. How so? Very simple – for example, if by the statistics the fourth bar of the histogram is followed by a series of the same several bars, it is reasonable to close the previously opened deal on the fourth.

Strengths of the Scalper Dream indicator

After reading the manual from the developers, as well as on the basis of the results of our experiments, contrary to expectations, we can say that the algorithm reviewed today is a good helper for scalpers, as it has the following advantages in comparison with similar products:

• virtually no lags and a small number of false alarms on a minute chart;
• universal, allows to determine the trend, the flat and signals to open orders; 
• doesn’t “overload” the terminal, unlike some other non-standard bar chart indicators;
• Scalper Dream saves the trader’s time, giving audible signals and sending alerts to email.