I just tested one of the highest win-rate trading strategies I have ever seen in my around nine years of a trading journey.
It got a way higher win rate than my expectation and way higher than any other trading strategy I have tested 100 times before.
You see, I recently started a new series where I am going to test most trading strategies and indicators 200 times.
I will test them in an extremely good market to see how high the win rate can go and in an extremely bad market to see how low the win rate can go.
Then, we can also compare those extremes with other trading strategies that we have tested in a mostly good market.
The MACD trading strategy has been the king in the mostly good market multiple times.
It always had the highest win rate out of all trading strategies, but not anymore.
In the extremely good market, MACD is no longer the king because there is a new strategy that gets a way higher win rate than MACD ever did.
But what is this new high-win-rate trading strategy?
Well, it’s the same one my great-great-great-grandfather used to use during the war.
It’s none other than the Bollinger Bands indicator that makes your chart look messy.
In this case, it looks like sunglasses, something similar, or someone sleeping on the beach.
It’s all about perspective, but this is the indicator that got the highest win rate out of everything we have tested.
Here’s how I did the test.
For the extremely good market test, I placed a nine-period moving average on the Gold/USD one-day time frame and only took trades where the price was above this moving average.
I didn’t take trades where the price was not clearly above the moving average or was ranging, slow, or choppy based on price action patterns like higher swing highs and higher swing lows.
I drew red boxes where I considered the price not to be clearly trending.
I tested in the same market structure as other strategies in this extreme testing series.

So, in the extremely good market test, I only took trades where I didn’t draw these red boxes, and in the extremely bad market test, I only took trades where I drew these red boxes.
The reason I’m saying the range market and slow market are bad because the strategy is a trend-trading strategy.
So, anything that is not trending clearly is bad for the strategy.
But that was just to filter the extremely good and extremely bad markets.
My actual entry timeframe was 30 minutes with the Bollinger Bands indicator.
The strategy’s logic is something like this.
You see, Bollinger Bands contract and expand when the price moves slowly and strongly, respectively.
For example, here you can see the Bollinger Bands coming closer together when the price was slow, and then the price started to move up strongly.
It gained upward momentum, and then the Bollinger Bands started to expand.
But the thing is, Bollinger Bands are lagging indicators.
They don’t react instantly to strong momentum changes.
So, many times, the price will move above the Bollinger Bands if the upward momentum is too strong, like what we see here.
The price has clearly closed above the upper Bollinger Band.
And this Bollinger Band is the default Bollinger Band.
I didn’t change any settings.
The strategy says that when the price or a candle closes above the upper Bollinger Band, it’s a sign of new, strong upward pressure, and we should take a long trade at the closing price of the first candle that closed above the upper Bollinger Band.
Something like this.
Since this is a trend-trading strategy in an uptrend, the stop loss can go below the pullback or swing low of the trend.
I set the profit target at 1.5 times the stop-loss distance or used a 1.5-to-1 reward-to-risk ratio.
To make sure I also took trades in the long-term uptrend of the 30-minute time frame, I only took long trades if the price was also above the 200-period moving average.
But the Bollinger Bands indicator is still kind of messy-looking.

Like, it can create confusion about where the price gave a breakout above the bands.
So, to solve this problem, I used the %B indicator, which is basically Bollinger Bands but looks like an RSI or something similar.
You see, when the price breaks above the upper Bollinger Band, the %B indicator will also break above its “one” value, or upper band.
And this makes it much easier to spot the exact candle that broke above the upper Bollinger Band.
So, this is what I used to take 100 trades in the extremely good market and 100 trades in the extremely bad market.
Also, I only took long trades since Gold/USD has been in a good uptrend for a long while.
So, here’s what happened when I took 100 trades in the extremely good market.
I was straight-up surprised.
The Bollinger Bands strategy started to win continuously from the start.
Now, usually, I do have some expectations about the win rate and other things before starting the test.
But this time, the win rate was way higher than my expectations.
When I tested the MACD strategy in the extremely good market in the previous video, I said that there might be a strategy that would beat MACD.
But I didn’t expect the new strategy’s win rate to be this much higher than MACD’s.
It’s almost unrealistic, as we will definitely not get this win rate in a mostly trending market or a normal trending market where there is range and slow movement in between.
But that’s the point of the extremely good market test.
I want to see how high the win rate can get, even with the 1.5-to-1 reward-to-risk ratio.
Because as we get more experience, as we improve, and as we get better at identifying good versus bad markets, this is how high our win rate can go with this Bollinger Bands strategy.
So, in the first test, the Bollinger Bands strategy got a massive 76% win rate, even with the 1.5-to-1 reward-to-risk ratio.
Remember that the break-even win rate with this ratio is 40%.
So, this 76% win rate is a really high, crazy win rate.

It won fifteen trades in a row and only lost five trades in a row.
It made 90% profit on the account, even without compounding.
With compounding, it would have been even higher.
But I have not tested previous strategies with compounding on.
So, I didn’t enable compounding in this testing as well.
This way, we can consistently compare different strategies.
But look at the profit graph.
It almost goes up in a straight line.
But why in the world is this strategy so unrealistic-looking?
Why is it better than MACD?
You see, there’s a small catch to this strategy.
It basically gives entry signals more frequently than MACD or many other strategies.
Since this strategy gives an entry point where the upward momentum rises strongly, when there is a strong upward trend, entries can happen more frequently.
And because of that, in the extremely good market test, it gave an entry signal quite frequently, like after a few candles.
Actually, I would consider this a disadvantage for this strategy.
Like, I would see too many entry points in a short while as a lower-quality setup.
I mean, the MACD indicator can also give multiple entry signals frequently.
But most of the time, it gives an entry point only once in a pullback.
If the first pullback fails or the price becomes slow and choppy, then it starts giving multiple entry points near the same point.
But this Bollinger Bands breakout strategy gives trades more frequently most of the time.
Don’t get me wrong, if you are trying to take as many trades as possible in a strong, trending market, then this indicator is very good.
This strategy will give you a lot of trades and will make a lot of money, according to the data.
But sometimes, the entry points are way too close, and it can feel like spam or a lower-quality entry.
But what about the extremely bad market?
How does this Bollinger Band strategy perform when faced with an extremely bad market?
Well, the win rate dropped to around 34% at one point during the test.

Sometimes, it did manage to win multiple trades in a row.
It won around six trades in a row and lost around ten trades in a row.
Sometimes, it would catch a small upward move, and because it gives trades frequently back-to-back, it managed to win more times, and because of that, the win rate jumped a little bit, even in the bad market.
So, after 100 trades in the extremely bad market, this Bollinger Bands breakout strategy got around a 42% win rate.
Now, the break-even win rate is 40%.
So, this 42% win rate is around the break-even point.
In other words, the profit graph will probably stay flat in the long run.
But in the extremely good market, this strategy gets a crazy-high, almost unrealistic win rate.
So, now it’s time to give it a Trading Rush score, or TR score.
In the previous 100-times testing series in the mostly good market, Bollinger Bands %B got a low win rate of around 38% and got around an 18.9 TR score.
It ranked really low out of all the strategies we have tested.
In the extremely bad market, I’m going to give Bollinger Bands the same TR score because it also got around a break-even win rate.
I mean, it did get a 42% win rate, which is above the 40% break-even win rate and definitely above the previous 38% win rate.
But the 42% win rate was only achieved after winning multiple trades in a short while near the end of the test.
So, overall, I would say the Bollinger Bands %B win rate in the bad market is around the break-even point, just like it was in the mostly good market.
And in the extremely good market, since it got a really high win rate, I’m going to give it a 9-out-of-10 score in the win rate category.
I would have gone even higher, but since it kind of spams trades, I gave it a 9 out of 10.
Since the strategy is easy to use, I gave it a 7.5 out of 10 in that category.
For the reliability of the setups, I gave it a 6 out of 10, lower than the MACD setups, because again, the strategy spams trades, so every trade is not that reliable.

As for consistency, it had one of the most consistent profit graphs I have ever seen, but again, since it spams trades, I can’t give it a high score in this category.
It is as good as the MACD profit graph, which overall is still better than other strategies’.
As for the quality of trades, I gave it an 8 out of 10.
For comparison, since MACD gives trades at the end of the pullback and usually doesn’t spam trades, that MACD setup is much higher quality.
This Bollinger Band setup, however, is like taking trades near the top of the trend.
And on top of that, they are kind of spammed, so they are not the best-quality setups, so I will give it an 8 out of 10.
Overall, the TR score the Bollinger Band strategy gets in the extremely good market is 37.5, which is slightly lower than MACD’s 38.8.
Yes, Bollinger Bands gives a really high win rate in the extremely good market, but since the reliability of the trades kind of sucks, the TR score is slightly lower than MACD’s.
So, when it comes to win rate, MACD is definitely not the king anymore, especially in the extremely good market.
Bollinger Bands gave a way higher win rate than MACD ever did.
But when we consider the quality of trades and other things, MACD is still the king.
So, since this is an ongoing series, let’s see if we find a strategy that is better than MACD in every category.
That’s all! Thanks for watching.