HALF MACD Trading Strategy 100 TIMES so you don’t have to…
This is the TRIX indicator, but what’s the win rate of the TRIX Indicator? I have explained the TRIX strategy in the TRIX strategy video, and in this video, I took 100 trades with it to see if it makes money or not. Here’s what happened. Since the TRIX indicator is basically a line, that crosses above and below another line, you might expect it to perform badly, give too many false signals in a row. But like the title of the TRIX video said, it gives entry signals without many false signals. How can the strategy we created using this one simple line give fewer false signals in a row? I think you can answer that question yourself if we add the MACD indicator on the chart. The MACD trading strategy got a high win rate on the Trading Rush Channel because it was excellent at identifying the end of a pullback in the trends. If you look carefully, you will notice that the TRIX indicator looks very similar to the MACD indicator. In fact, if we hide the MACD line from the MACD indicator, you can clearly see that the TRIX indicator line moves very similar to the Signal line of the MACD indicator. Since MACD got a high win rate, will the TRIX indicator will get a high win rate as well? Well, not exactly.
When I took 100 trades with it, it lost few trades at the beginning. The strategy was tested on EURO JPY and on 30 minutes timeframe. Most strategies we have tested so far, win a couple of trades at the beginning including the MACD strategy, but this one lost trades even though the market structure was the same. You see, in the MACD strategy, you buy at the crossover of the MACD and the signal line. But in the TRIX indicator, there is no signal line. So for the TRIX indicator to give an entry signal, the TRIX value has to cross above or below the zero line. Because of this, even though the TRIX indicator properly identified the end of a pullback, the indicator gave late entry signals compared to the signals of the MACD indicator.
But even though the signals were late, they were still similar to the MACD signals. MACD’s profit graph looked something like this. A good relatively consistent uptrend. And after losing few trades at the start, the profit graph of the TRIX Trading Strategy also started to move more consistently in the upward direction similar to the profit graph of the MACD Trading Strategy.
And after 100 Trades, it got an approximate win rate of 47 percent with a 1.5 to 1 Reward Risk Ratio. This is the profit graph of the CMO indicator that we tested recently. The CMO indicator got a good win rate because it gave more and faster signals in a trend, and didn’t give a lot of the profit back in the range or slow market. The best part about the CMO strategy was its win rate, and with the TRIX Trading Strategy, the best part was the consistency of the profits.
5.5+7.5+6+5+7=31
Even though the CMO strategy was better when it comes to the win rate, if we visit the Trading Rush Website, we can see the TRIX indicator took the lead in the Quality of Trades, Reliability, and, Consistent Profits category, and gets a higher TR Score of 31 out of 50, and ranks 13th from the top, above the MACD with Ichimoku Cloud Strategy, and below the Chaikin Oscillator Trading Strategy.
The TRIX indicator is like the MACD indicator. Its strategy gives more consistent profits like the MACD strategy but is slow because it lacks the signal line. That’s all!