But why though? Why do we want a moving average that will disappear when the market is in a range? Well, look at this example. Here, price is in an uptrend, and we all know that one of the best places to buy in the Forex and Stock Market, is when the price is in an uptrend. Most of the long trades you are going to take in this uptrend have a higher probability of winning, well because the price has a higher probability of moving in the direction of the trend. This is the range, and if you are a subscriber of the Trading Rush Channel, you have probably seen multiple strategies get bad win rates because they gave too many entry signals in the range market. You can make money when the market is moving in the sideways direction, but beginner traders are not recommended to, because trading here is much easier and better than trading in a range market where the price can get choppy. 

 

So how do we actually filter the range market? Even your dog knows that in a range market, the price stays between two areas, and, if you plot a long-term moving average, the price will cross the moving average multiple times. So wait a minute, in a range market, if the price crosses the moving average multiple times in a short time period, and the price stays on one side of the moving average in a trending market, can’t we just tell the moving average to disappear when the price crosses the moving average multiple times in a short period of time? Well, that’s exactly what I did. I created a 200-period moving average, that tries to disappear if it detects the range market.

 

Look at this example, when the price was in a good uptrend, the moving average color was green. When the price started to move in a sideways direction, the Trading Rush moving average disappeared. And when the price started to trend again, the moving average turned green again.

When there is a good downtrend going on, the moving average will turn red. And if the Trading Rush moving average detects a range market, it will disappear so you won’t take trades and lose money in the sideways market.

 

This example is even better. Here, the Trading Rush Moving Average was green in an uptrend, then turned red in a downtrend, and when the price was moving in the sideways direction, the Trading Rush Moving Average Disappeared. And then reappeared when it detected an uptrend.

 

Does this mean we have successfully created the best moving average that filters the range market on its own? What will happen if we test a trading strategy 100 times, with a normal 200 period moving average, and test the same strategy again, but this time with a moving average that disappears? Well, why don’t we find out?

 

First of all, to test the Trading Rush Moving Average 100 times, we will need a Trading Strategy. I have tested many different trading strategies 100 times on the Trading Rush Channel, but if I use them, the videos will look similar, and youtube will send a love letter asking me to delete the videos, again. So, I created a new Trading Strategy just for this video. If you are a subscriber of the Trading Rush Channel, you have probably heard about the Beep Boop indicator that we created in the AI trades video. Beep Boop Trading Strategy was a profitable trading strategy. So I combined the Beep Boop Indicator with the Bollinger Bands Indicator, and created a new trading strategy for this video, that goes something like this.

 

If the price is above the 200 period moving average, buy when the beep boop indicator gives a buy entry signal, only if the closing price of the entry candle is above the Bollinger bands. Set the stoploss below the pullback.

 

Similarly, if the price is below the 200 period moving average, sell when beep boop indicator gives a sell entry signal, only if the closing price of the entry candle is below the Bollinger bands. Set the stoploss above the pullback.

 

If you don’t know anything about the Beep Boop Trading Strategy, check out the “I taught my computer to trade” video, or the video after that to learn more.

 

Now we have a trading strategy, but we don’t know its normal win rate yet. To see if the Trading Rush Moving Average can improve the Winrate of a trading strategy, we will have to test the trading strategy with a normal moving average first. Once we find the normal win rate, we will test the strategy again with the Trading Rush Moving Average, to see if the win rate improves or not.

 

So I took 100 trades with the normal moving average, and here’s what happened. 

 

The profit in the Trading Rush App went up, then came down, and then went up.  When we tested the Beep Boop and Bollinger Bands Trading Strategies on the Trading Rush Channel, we saw both of them made money at the end. And after combining both strategies, the profit graph still went in the upward direction. And the win rate I got with the normal moving average was approximately 45 percent, which is still a profitable win rate because of the 1.5 to 1 reward risk ratio. In the Trading Rush App, the strategy with a normal moving average made a profit of 1250.

 

Now let’s see if the Trading Rush Moving Average can increase the win rate of the Trading Strategy.

 

So I took another 100 trades with the disappearing moving average, and this happened.

 

At the start, the profit in the Trading Rush App went up, then came down, and then went up. But this time, the profit was more consistent, and more trades were won than lost. When the Trading Rush Moving Average disappeared, many false trades were filtered, and that’s exactly what we designed it to do. If you remember, near the start of this video, I showed you an example of the Trading Rush Moving Average. The trades in that example were taken with the Beep Boop and Bollinger Bands strategy. As you can see, when the Trading Rush Moving Average was green, more long trades were won than lost. And when the moving average was red in color, more short trades were won than lost. That makes sense because the price has a higher probability of moving in the direction of the trend. But when the price started to move in a really bad range, no trades were lost or won, because the moving average disappeared. We all know that most strategies give false signals in a range market, but because the Trading Rush Moving Average filtered the range market, the win rate at the end was actually higher.

 

If we compare the results side by side, you will see that the win rate with the Trading Rush Moving Average was 5 percent higher. Now 5 percent doesn’t sound that high, but remember that both of them were tested in the same market structure, and if you look at the profit graph and profit numbers, you will notice that profit with the Trading Rush Moving Average was 100 percent more than the profit got with the normal moving average. Furthermore, the profit graph with the Trading Rush Moving Average is more consistently going up than the profit graph of the normal moving average.

 

So how can you try the Trading Rush Moving Average for free? and what’s the conclusion? Well, this was an attempt to create a moving average that can increase the win rate of our trading strategies by filtering the bad market. I think we all succeeded at that part. The best part I like about the moving average is that it filters a lot of false signals in the range-market. While creating and testing this indicator, I noticed that it does a fantastic job at disappearing when the market is in a really bad range, or in other words, when the markets are not worth trading. So if you want to try the disappearing Trading Rush Moving Average for absolutely free, I will publicly share the source code on the Trading Rush Patreon Page, just like I did with the beep boop indicator. The link to the indicator will be in the description. If you are watching this video on the Official Trading Rush Website, the link to the indicator should be just below the video. In the next video, we will try to improve the trading strategy even more, by improving the disappearing moving average a bit more.

 

So Subscribe and ring that notification bell to see that, and to see win rates of other trading strategies that we have tested 100 times. After all, you don’t want to risk your money on a strategy that doesn’t even work. Like the video if you liked it. Support Trading Rush on Patreon to see in-depth trade analysis, and for trade opportunity signals. Thanks a lot for watching.