Tag: day trading

EMA vs DYNAMIC Moving Average tested 100 TIMES and this happened?

Post author By Trading Rush
Post date May 27, 2021

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Is McGinley Dynamic better than a Simple or Exponential Moving Average? Well, I took 100 trades with it to find that out. One of the popular moving average strategies is the 9 and 21-period crossover strategy, and after taking 100 trades with both Exponential and Simple Moving Averages on the Trading Rush Channel, we found out that they are profitable in the long run. But can the McGinley Dynamic moving average perform well or even better, with its unique way of adjusting to the different market conditions?

When taken 100 trades on almost the same market structure, where the Simple and Exponential Moving Average crossover strategies got a profitable win rate, the McGinley Dynamic started with a loss. The profit line then started to move in the sideways direction for a while instead of making a profit as the SMA strategy did.

Wait a minute. Didn’t I say in the McGinley Dynamic video that on timeframes like 30 mins, the McGinley Dynamic is just a half-length Exponential Moving Average.

Well, yes, and that’s exactly why you don’t see the McGinley Dynamic perform similar to the Exponential or SMA strategy.

And because we know McGinley Dynamic is just a half-length Exponential Moving Average on 30 mins, in this video, we are not only testing the McGinley Dynamic strategy but also the Exponential Moving Average Strategy with higher lengths.

In simple words, in the 9 and 21 period McGinley Dynamic moving average crossover strategy, the 9 period McGinley Dynamic, is showing almost the same values as an 18 period Exponential Moving Average, and a 21 period McGinley Dynamic is showing almost the same thing as a 42 period Exponential Moving Average. You can check out the previous video to learn more.

If you have been trading for a while, you can tell that a longer period moving average will react to price slower, than a faster period moving average. Because of this, McGinley Dynamic didn’t give entry signals where the Exponential Moving Average did and won. However, McGinley Dynamic also gave fewer false signals in a row in some cases, compared to the Exponential Moving Average Crossover Strategy.

But after 100 Trades, the McGinley Dynamic Trading Strategy got a 43 percent approximate win rate with a 1.5 to 1 reward risk ratio. The same strategy, but with Exponential Moving Average and Simple Moving Average, got 47 and 48 percent approximate win rates respectively.

So in the long run, the 9 and 21 period EMA strategy that many traders use, is still better than the McGinley Dynamic, or in other words, better than the 18 and 42 period Exponential Moving Average crossover trading strategy.

4.2+7.4+4+4+4.5

The McGinley Dynamic Crossover Strategy gets a TR Score of 24.1 out of 50, and ranks 27th from the top, below the Hull Moving Average with SMA strategy, and above the Fisher Transform Trading Strategy.

That’s all.

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McGinley Dynamic Indicator is a LIE!! How to actually use McGinley Dynamic Trading Strategy

Post author By Trading Rush
Post date May 26, 2021
1 Comment on McGinley Dynamic Indicator is a LIE!! How to actually use McGinley Dynamic Trading Strategy

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This is one of the most interesting indicators I have seen so far. Because watch this. This is a normal 50 period exponential moving average, you have most likely seen it multiple times before, but if I add a 50 period McGinley Dynamic moving average, still nothing interesting happens. One is just slower than the other. Usually, moving averages other than the simple and exponential moving averages, claim to be faster and reduce lag. But when put to the test, most of them are not even worth using. The only moving average that actually improved the win rate of a strategy in the long run, was the Weighted Moving Average we saw on the Trading Rush Channel. Removing lag from the moving average is not always a good idea, because most of the time it won’t magically make your strategy better. The McGinley Dynamic, on the other hand, is not like the other moving averages that claim to reduce lag. Instead, it claims to reduce lag by adjusting to the speed of the price movement.

It gets interesting. In a normal exponential moving average, it will calculate the average the same way in the range market, when the price is trending, and when the price makes sudden big moves. This can be a bad thing in some cases, especially when the price makes sudden big moves. But the McGinley Dynamic on the other hand will take this into account, and will adjust to ranging, trending, and sudden price movements.

But here’s the twist, if you plot the 50 period normal exponential moving average, and a 50 period McGinley Dynamic moving average on a timeframe like 30 mins, they will look different at first glance, but if you double the length of the normal exponential moving average, or in other words, if you set the length of the exponential moving average to two times the length of the McGinley Dynamic, you will notice something interesting.

The 100 period normal Exponential Moving Average, is almost exactly the same as the 50 period McGinley Dynamic moving average. Does this mean McGinley Dynamic is just a lie and showing almost exactly the same thing as a double-length normal Exponential Moving Average?

Well, yes, but actually no!

First, I applied a normal 100 period Exponential Moving Average, and a 50 period McGinley Dynamic moving average on a 30 mins Forex Chart, and they both looked almost exactly the same on TradingView. But remember what I said earlier, this indicator claims to adjust to the range, trending, and sudden market movements. So one of the first thoughts would be that 30 mins chart doesn’t have a lot of big sudden moves, maybe that’s why it is not that different. But when applied on a 1 min Forex chart, there is still not a lot of difference. And it’s not just the case with 50 and 100 period moving average. You can use any length McGinley Dynamic moving average, and an Exponential Moving Average with twice the length of the McGinley Dynamic will look exactly the same on the smaller Forex timeframes.

Even on a stock chart, where the prices open with huge gaps, the two moving averages looked almost exactly the same even on 1 min timeframe. However, this time, there was a small difference between the Exponential and McGinley Dynamic at some points.

You see, many traders call the McGinley Dynamic a better moving average, but on timeframes 4h and lower on the Forex Market, the McGinley Dynamic and a double-length Exponential Moving Average look almost exactly the same. On the other hand, in the stock market, on timeframes 30 mins and lower, there is almost no difference between a McGinley Dynamic and a double-length Exponential Moving Average. You will see occasional gaps between the two moving averages, but there are not significant to call the McGinley Dynamic special or better.

However, the biggest difference is easily noticeable, and where the McGinley Dynamic indicator shines, is on the Daily and higher timeframes. On the daily timeframe, the McGinley Dynamic does adjust to the ranging, trending, and sudden price movements.

So, if you want a moving average that adjusts to the speed of the price movement, use McGinley Dynamic, but only on the higher timeframes like Daily. Otherwise, you are better off with a double-length normal Exponential Moving Average on smaller timeframes.

We will take 100 Trades with the McGinley Dynamic moving average in the next video, to compare it with the other moving average strategies we have tested 100 times on the Trading Rush Channel so far. That’s all.

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I took 200 TRADES with the RVI Trading Strategies and Here’s What Happened…

Post author By Trading Rush
Post date May 25, 2021
1 Comment on I took 200 TRADES with the RVI Trading Strategies and Here’s What Happened…

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Does the RVI Trading Strategy even work? This time, I took 200 Trades with the RVI indicator to see if it is better than other strategies we have tested so far. Since there are two widely used RVI Strategies as we saw in the RVI strategy video, I took 100 trades with the RVI strategy that gives signals when the pullback is big, and then another 100 trades with another one that focuses on the strong trends. Here’s what happened.

With the RVI strategy that gives entry signals when the pullback is big, the profit graph went in the upward direction till the first 20 or so trades, but many times the RVI indicator gave crossovers a bit early than the actual pullback, leading to one or two false signals just before the winning trade. This made the profit line go in the sideways direction for a while, and then at one point, the RVI indicator gave too many false signals in a row, and the profit line took a dive near the end. This deeper pullback RVI strategy, or in other words, when I took long RVI signals when the crossovers were below the zero line, and vice versa, the RVI strategy got a breakeven percentage. It didn’t make or lose money.

But when I took long RVI crossovers above the zero line, and short crossovers below the zero line, the profit graph looked very similar to the first strategy at the beginning. This one also won multiple trades in a row till the first 20 or so trades, and then the profit graph went in the sideways direction. But this time, the profit graph didn’t go in the downward direction as it did with the first strategy.

Both RVI strategies had their unique advantages and disadvantages. The first one was not giving entry signal at the top of the trend, but the second RVI strategy was, leading to false signals in the long run. The second strategy was not giving entry signals when the pullback was big, leading to fewer false signals when the trend was changing direction, whereas the first strategy was.

After 200 Trades, the RVI strategy where long signals were taken below the zero line, got a 40 percent approximate win rate with a 1.5 to 1 reward risk ratio. And the RVI strategy where long signals were taken above the zero line, got a 45 percent approximate win rate.

As we can see from the profit graph when the trend is strong, both strategies make money, but in the long run, the second RVI strategy is a bit better than the first one. When another good trend shows up, the profit line with the second strategy has more probability of going in the upward direction and staying there, while the first one has a decent chance of giving back the profit.

4+7.3+4+4+4

The first RVI strategy gets a TR Score of 23.3 out of 50 and ranks 30th from the top.

5+7.3+4+4+5

On the other hand, the second RVI strategy gets a TR Score of 25.3 out of 50 and ranks 23rd from the top.

That’s all.

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Simple RVI Trading Strategy for trading the strong trends

Post author By Trading Rush
Post date May 24, 2021

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Even your neighbor Bill knows that in an uptrend, the price closes higher than the opening price, and in a downtrend, closes lower than the opening price. This RVI Indicator, or Relative Vigor Index, is a momentum indicator and is based on the higher probability of price closing higher, than where it opened in an uptrend, and closing lower than where it opened in a downtrend. That’s good and all, but what’s the point of using the RVI indicator? Even though RVI looks like a Stochastic Indicator at first glance, it does not have the upper and lower bands. Instead, it oscillates around the zero line. When the RVI line is above its zero line, it’s an uptrend. And when the RVI line crosses below the zero line, it’s a downtrend.

But since the RVI line oscillates around the zero line, the Relative Vigor Index generates two different kinds of entry signals.

You see, in a strong uptrend, the price makes a move in the upward direction, then slows down a little, and makes a strong move in the upward direction again. In one of the widely used RVI strategies, you buy when the RVI line crosses above the signal line, only if the crossover is above the zero line. That makes sense because the RVI line above the zero line indicates an uptrend. But this strategy is only good if the price is really in a strong uptrend because when you buy at the RVI crossover above the zero line, you will most likely buy near the top of the trend. This makes the RVI strategy better for catching the small moves in the direction of the strong trends. Otherwise, buying at the top will lead to unnecessary losses in the long run.

But many people who are subscribed to the Trading Rush Channel, don’t like to buy, at the top of the uptrend. Many traders, especially those who are using strategies like the MACD are buying when the pullback is big, so the price has enough room to move in the upward direction before reaching the swing high resistance, and resulting in a higher probability of winning in the long run.

To only buy when the pullback is big, many traders buy when the RVI line crosses above the signal line, below the zero line. Remember, the RVI indicator is used to find the short term trend direction, and not the long term trend, But when you use a longer period moving average like the 200 Exponential Moving Average to find the trend direction, the price above the 200 period moving average, and the RVI below the zero line, indicates a temporary downward momentum in a long term uptrend.

When the RVI value is below the zero line, a Long RVI crossover indicates a potential end of the pullback and a signal to buy.

The short setup is just the opposite of the long setup. And in both the first and second RVI strategies, the stoploss can be set using the pullback of the trend.

To find the win rate of the RVI Trading Strategy, we will have to test it 100 Times in the next video.

That’s all.

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I combined MACD with Supertrend 100 TIMES and this is what happened…

Post author By Trading Rush
Post date May 23, 2021
1 Comment on I combined MACD with Supertrend 100 TIMES and this is what happened…

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Can Supertrend MACD Trading Strategy make more money in the long run? This is one of the most requested strategies, and in this video, we are going to take 100 trades with it to find its win rate, and to see if it works or not. But why would anyone want to combine MACD with Supertrend? You see, Supertrend as the name says, shows the short-term trend direction on a Forex and Stock Market Chart. And the MACD indicator is a momentum indicator. So when you combine the two indicators, you are trying to identify, and take trades at the end of the pullbacks in the direction of the Supertrend. However, these pullbacks will be smaller than the pullbacks MACD Strategy with zero line rule tries to identify because when the pullback is big, Supertrend shows an opposite trend most of the time.

To filter some of the false MACD signals even further, we will use the Beep Boop Indicator that we created in one of the previous videos. Also, one thing to note, is that the reason why the Supertrend MACD combination was requested many times, was because Supertrend, MACD, and Beep Boop Indicator got good profitable win rates on their own. So combining two profitable strategies sounds like a good idea at first glance. But till now, out of all the combinations we have tested 100 times, almost none of them have achieved a higher win rate than what they got after testing separately.

The Supertrend MACD Strategy goes like this. When the Supertrend shows an uptrend, and the price is above the 200 period moving average, the buy entry signal is when the MACD line crosses above the signal line. But in this case, since we are using the Beep Boop Indicator, the buy signal is when the Beep Boop Indicator turns green. Since we are using MACD to identify the pullbacks, the stoploss goes below the pullback in the uptrend.

Similarly, when the Supertrend shows a downtrend, and the price is below the 200 period moving average, the sell signal is when the MACD line crosses below the signal line, or when the Beep Boop Indicator turns red. The stoploss goes above the pullback in the downtrend. Note that the Beep Boop indicator also uses a 50 period moving average to filter some of the false MACD signals in the slow markets.

In the MACD Supertrend combination, since we are taking trades at almost every MACD crossover, we are expecting the profit line to go in the upward or downward direction in a straight line for a while. And at the beginning, the Supertrend MACD combination won multiple trades in a row and the profit line went in an upward direction. The Supertrend even filtered many signals that it thought were false. Some of these filtered signals would have taken by the MACD Strategy that we saw on the Trading Rush Channel, and won. But that was not the big problem with the Supertrend MACD strategy.

You see, even though we are taking trades at almost every MACD crossover in the direction of the Supertrend when the trend was good, many trades were won in a row. But, the Supertrend indicator only shows uptrend and downtrend. In a downtrend, if the price stops making new lower swing lows, but doesn’t make any new higher swing highs, the Supertrend will still show the same downtrend. In simple words, after a downtrend, if the price starts to go in the sideways direction, instead of starting an uptrend, the Supertrend will still identify the trend as a downtrend.

That’s not a problem if you are taking few entry signals in a short amount of time. But this time, with the MACD crossovers, we are. And during these slow trends, MACD gives many crossovers resulting in multiple losing trades in a row.

Even after winning multiple trades at the beginning, the profit line with the Supertrend MACD Trading Strategy went in the sideways direction for the most part, and not consistently in one direction.

The MACD Supertrend Trading Strategy got a 42 percent approximate win rate with a 1.5 to 1 Reward Risk Ratio. 40 percent is the breakeven percentage, but because of the sideways profit graph, we can say the Supertrend MACD combination is more like a hit or miss strategy.

4.2+5.5+4+2+4.5

And gets a TR Score of 20.2 out of 50, and 38th from the top, below the Awesome Oscillator First Strategy, and above the Aroon Trading Strategy.

That’s all.

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This SIMPLE Stop-loss TWEAK Got 6% MORE Win Rate with this Strategy

Post author By Trading Rush
Post date May 22, 2021
2 Comments on This SIMPLE Stop-loss TWEAK Got 62 MORE Win Rate with this Strategy

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Since the Weighted Moving Average made the Golden Cross Trading Strategy better and gave a relatively consistent profit graph in the long run, can the Triple Exponential Moving Average give the same or even better win rate than the WMA Golden Cross? Actually this time it gets even better because this time I took 200 Trades with the TEMA Golden Cross Strategy. You see, in a normal Golden Cross Trading Strategy, and in the WMA Golden Cross that we have tested before, the stoploss was set below or above the moving average. But since the Triple Exponential Moving Average is faster than both Weighted, and Normal Exponential Moving Averages, the stoploss in the TEMA Golden Cross was sometimes way too close to the entry. So I took 200 trades, 100 with stoploss below or above the moving averages, and 100 trades with stoploss set using the pullbacks of the trend. So in this video, we are not only going to find out if TEMA Golden Cross is better than the WMA Golden Cross, but also how pullback stoploss can affect the win rate and profit graph of a trading strategy.

If you look at the chart, you will notice that there are 3 moving averages instead of 2. In a normal Golden Cross Strategy, we use 50 and 200 moving averages to generate Golden Cross Signals. But the Triple Exponential Moving Average is so quick at reacting to the price movement, that it gives a lot of Golden Crossovers in a short period of time, leading to more false signals. So I had to use a 200-period normal Exponential Moving Average to filter most of those false signals.

As you can see, with the stoploss above or below the moving averages, the profit graph went in the sideways direction at the beginning, but then took a dive and started a downtrend. This is one of the worst profit graphs we have seen so far. The TEMA Golden Cross Strategy did recover some of the loss near the end, but if we take the same trades but by using the pullback stoploss, you will notice that the stoploss is not getting triggered by market noise. The Triple EMA Golden Cross strategy doesn’t give a lot of good quality signals like the Weighted or even the Normal Golden Cross Strategy. However, if we look at the profit graph in the Trading Rush App, we will notice that the profit line with the pullback stoploss no longer looks like a market crash.

The TEMA Golden Cross strategy with the moving average stoploss got an approximate win rate of 37 percent with a 1.5 to 1 reward risk ratio, and the profit graph looked like the profit graph of a confident beginner trader. On the other hand, the TEMA Golden Cross Strategy with pullback stoploss got a 43 percent approximate win rate with a 1.5 to 1 reward risk ratio It didn’t lose money and was not bad as the first one.

3.5+7.4+3.5+0+3.5

The first TEMA Golden Cross with moving average stoploss gets a TR Score of 17.9 out of 50 and ranks 43rd from the top, and 4th from the bottom. Above the MACD zero lag strategy, and below the CCI Trading Strategy.

4.2+7.4+4+2+4.5

On the other hand, the better TEMA Golden Cross with the stoploss above or below the pullback gets a TR Score of 22.1 out of 50, and ranks 35th from the top, below the DEMA Golden Cross Strategy, and above the Awesome Oscillator second strategy.

That’s all.

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The TRUTH about TRIPLE EMA you should know (TEMA) – Day Trading Strategies

Post author By Trading Rush
Post date May 21, 2021
2 Comments on The TRUTH about TRIPLE EMA you should know (TEMA) – Day Trading Strategies

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Is the Triple EMA really better than the normal Exponential Moving Average? The Triple EMA is very similar to the Double Exponential Moving Average, but as the name says, in the double exponential moving average, you use two Exponential Moving Averages, and in the Triple EMA, you use three Exponential Moving Averages to calculate the values. This results in a faster EMA with less lag.

If you plot a normal 200 Exponential Moving Average, a DEMA, and a Triple Exponential Moving Average at the same time. You can obviously guess that the Triple EMA will be the fastest. However, the fastest Exponential Moving Average doesn’t always have to mean better.

For example, when we talked about the Double Exponential Moving Average, we saw that DEMA was actually better when used as an exit indicator because it reacted to the price faster. But compared to DEMA, the Triple EMA sticks way too close to the price, and when used as an exit indicator, the price will cross it multiple times leading to false early exits. In other words, the DEMA is still the sweet spot between not too fast and not too slow.

But then what’s the point of using a Triple Moving Average? If you look at this chart, you will notice that even though Triple EMA was sticking very close to the price in the trend, when the trend was over, or when the price started to reverse, the Triple EMA was far away from the price. Because of this, the main purpose of the Triple Exponential Moving Average is to smooth out the noise like most moving averages, while reacting to price movements with reduced lag. Remember, just because Triple EMA stays near the price, it is not the same as the faster period normal moving average. However, if you remember, in the Double Exponential Moving Average Video I said, that in a trend, you can achieve the same result as DEMA, by simply using a faster period exponential moving average. With the Triple EMA, that’s not the case. However, a shorter period Double Exponential Moving Average looks very similar to a Triple Exponential Moving Average in a trend.

Well, if that’s the case, is Triple EMA special? If you think the normal exponential moving average is special, then yes! But should you use the Triple EMA over a normal Exponential Moving Average? Many traders like to use a 30 period Triple EMA in a strong trend. In an uptrend, they buy when the candle closes above the 30 Triple Exponential Moving Average. But then again, if you add a normal 9-period Exponential Moving Average on the same chart, you will see the normal EMA reacts pretty much the same way in the strong trend, and even gives faster and better entry signals in many cases. The 9 period Exponential Moving Average Strategy is a widely used Trading Strategy, and even I have made money with it in the past. As you can see, in this case, the 9-period normal Exponential Moving Average Strategy gave a way better entry signal than the 30 period Triple EMA Strategy, and many time gives the same or even better exit signals than the 30 period Triple EMA.

As I said, the Triple EMA reduces lag from the normal Exponential Moving Average, but that doesn’t have to mean good. Many times lag on a moving average is better. Since the Weighted Moving Average actually increased the win rate of the Golden Cross Strategy by reacting to the price movement faster, we will test Triple EMA 100 Times in the next video to see if it can perform better than the Weighted Moving Average, by reacting to price even faster.

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EASY RSI CLOUD Trading Strategy Tested 100 TIMES so you don’t have to…

Post author By Trading Rush
Post date May 20, 2021
1 Comment on EASY RSI CLOUD Trading Strategy Tested 100 TIMES so you don’t have to…

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Does the Ichimoku Cloud and RSI combination even work? Will this strategy have a higher win rate than the Ichimoku Cloud got on its own? Well, why don’t we find out after we take 100 Trades with the RSI Ichimoku Cloud Trading Strategy that we saw in the previous video?

Since the whole point of the Ichimoku Cloud was to identify the strong trends, we are expecting the profit in the Trading Rush App, to go in the upward direction, and it did. Not because Ichimoku Cloud was showing the good trends quite accurately, but because RSI gave more signals in a short period of time in that good trend. That’s not a bad thing. After all, many traders add to position when the good trend continues.

The RSI Ichimoku Cloud combination was pretty interesting. Since RSI gives a lot of signals in a row, one might expect, the cloud of the Ichimoku Cloud, to filter a lot of false RSI signals when the price starts to go in the sideways direction at the end of the trend. But in reality, the RSI doesn’t give a lot of signals in the sideways market. It still gave false signals in the slow-moving markets, and those signals were filtered by the Ichimoku Cloud. But compared to the number of good signals the RSI gives in the trending market, the number of false signals in the slow market is way lower. In other words, more profit in the trending market, and less loss in the slow market.

But, in the Forex and Stock Market, the trend always comes to an end. You see, when you take a trade in the direction of the trend, you will only make money if the price continues to move in the direction of the trend. If you take a trade, and the price starts to move in the sideways direction, your profit target will not get hit, and if the price starts to reverse, you are definitely going to make a loss. Since RSI gave multiple signals in a short time when the Ichimoku was showing a trend, many trades were lost when the price simply stopped moving further in the direction of the trend. In other words, more trades were lost near the end of the trend than in the slow-moving market that follows afterward.

However, the RSI Ichimoku Cloud Trading Strategy gave more good signals in the long run. And in the Trading Rush App, it got a win rate of approximately 49 percent, which is a bit lower than what the Ichimoku Cloud Trading Strategy got on its own. 49 percent is still a profitable win rate because of the 1.5 to 1 reward risk ratio.

5.8+5.5+4.5+4.5+6

And the Ichimoku Cloud RSI Trading Strategy gets a TR score of 26.3 out of 50, and ranks 21st from the top, below the RSI Supertrend Strategy, and above the CMO Trading Strategy.

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BEST Ichimoku Cloud RSI Trading Strategy – How to make money with RSI Ichimoku Indicator Strategies

Post author By Trading Rush
Post date May 19, 2021
3 Comments on BEST Ichimoku Cloud RSI Trading Strategy – How to make money with RSI Ichimoku Indicator Strategies

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If there is a strategy that has one of the best and most useful features on a Forex and Stock Market Chart, why not use that useful feature with some other trading strategy? Since the Ichimoku Cloud Trading Strategy got a high win rate after testing 100 Times, and a good TR Score on the Trading Rush Channel, why not use the Cloud from the Ichimoku Cloud, which filters and shows the trend direction, with the RSI indicator?

In a normal RSI Trading Strategy, you buy at the RSI oversold area and sell at the overbought RSI area. But in a trend, you most likely don’t buy when the RSI says oversold, and you don’t sell when the RSI says overbought. Because, even your cat knows that when the price is in an uptrend, the RSI overbought area no longer holds a strong value. Similarly, when the price is in a downtrend, the RSI oversold area does not mean it is a strong buying opportunity. In reality, many people think the opposite. Instead of selling when the RSI reaches the overbought area in an uptrend, it is a sign of a strong buying pressure in the direction of that uptrend. Similarly, instead of buying when the RSI reaches the oversold area in a downtrend, it is a sign of strong selling pressure in the direction of that downtrend.

That’s good and all, but to increase the win rate of this RSI Strategy, we need more than just a 200 period moving average. We need to filter the false RSI signals that will appear in the slow and range market and an indicator that confirms the strong short-term trend in the direction of the long-term trend.

That’s where the Cloud from the Ichimoku Cloud comes into play.

Here’s how the Ichimoku Cloud and RSI Trading Strategy goes.

When the Ichimoku Cloud is green in color above the 200 period moving average, only look for long RSI signals. When the RSI line crosses above the overbought level of 70, it’s a long entry signal only if the entry candle is above the cloud. Stoploss goes below the pullback.

Similarly, when the Ichimoku Cloud is red in color below the 200 period exponential moving average, only look for short RSI signals. When the RSI line crosses below the oversold level of 30, it’s a short entry signal only if the entry candle is below the cloud. Stoploss goes above the pullback of the trend.

By taking short trades only below the red cloud, and long trades only above the green cloud, we are looking to take more signals when the price is in a good trend like these. And are trying to filter the false signals that appear in the slow-moving markets.

To find the win rate of the Ichimoku Cloud RSI Trading Strategy, we will take 100 Trades with it in the next video.

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I combined Beep Boop (MACD) and Alligator Trading Strategy 100 TIMES Here’s What Happened…

Post author By Trading Rush
Post date May 18, 2021

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Is Alligator with MACD Trading Strategy even worth Trading? I took 100 trades with MACD combined with the Alligator Indicator, the same way a lot of you have been requesting. Use the Alligator to identify and filter the range market, and use the MACD crossover as the entry signal. Since taking the trade at every MACD signal is not such a good idea, we will use the Beep Boop Indicator that we created on the Trading Rush Channel, which is based on the MACD indicator, and will filter some of the false MACD signals in the slow markets. Since the Beep Boop and Alligator Trading Strategies gave good win rates on their own, it will be interesting to see what will happen if we combine Beep Boop with the Alligator indicator.

When you combine the Beep Boop Indicator with the Alligator Indicator, the strategy looks something like this.

When the Alligator Indicator is showing an uptrend above the 200 period moving average, buy when the Beep Boop Indicator turns green and gives a buy signal. Stoploss goes below the pullback.

When the Alligator Indicator is showing a downtrend below the 200 period moving average, sell when the Beep Boop Indicator turns red and gives a sell signal. Stoploss goes above the pullback.

In the long setup, the entry candle has to be completely above all the alligator lines. Similarly, in the short setup, the entry candle has to be below all three alligator lines. This is to filter some of the false signals caused by noise in the slow markets.

You can learn more about the Alligator uptrend downtrend and Beep Boop Indicator in more detail in their dedicated videos.

However, when I took 100 Trades with the Beep Boop Alligator Trading Strategy, I found out that when the Alligator, and the 200 period moving average, are both in a good trend, you will most likely see a good winning streak, because MACD will identify and give a good entry signal at almost every pullback of the trend. Because of this, in the Trading Rush App, the profit line went in an upward direction. But, Alligator is slow.

You see, the MACD, or in this case, the Beep Boop Indicator does not always give the entry signal after the Alligator shows the same direction. For example, in this uptrend, the Beep Boop or MACD indicator detected the end of the pullback first and gave an entry signal. But the Alligator was slower to react and showed the same trend direction a few candles after the MACD crossover. Since MACD didn’t give a signal when Alligator was indicating the same trend direction, these signals that could have made money were missed but could have taken by both, the Alligator and Beep Boop Indicator when used separately.

So the signals the MACD Alligator Strategy took, were mostly in the middle of a good trend, and near the end of the trend when the Alligator mouth was wide open. Since the market doesn’t stay in the trend forever, many of these trades were lost when the trend started to reverse.

After making a good upward move at the start, the profit line went in the sideways direction for the most part. Even though the Alligator combined with MACD got a 45 percent win rate after 100 trades with a 1.5 to 1 reward risk ratio, the Alligator and Beep Boop separately were way better. Even their and profit graphs went in the upward direction, and not sideways.

5+5.5+4+4+5

The Alligator with MACD Trading Strategy gets a TR score of 23.5 out of 50, and ranks 26th from the top, above the Stochastic Trading Strategy, and below the Fisher Transform Strategy. For reference, the MACD with the zero line rule ranks first, the Alligator on its own ranks 8th, and the Beep Boop indicator on its own ranks 12th, but the Alligator combined with MACD ranks 26th.

So, as I said in the previous video, the best and proper way to use Alligator with MACD is not on the same timeframe, but MACD on the entry timeframe, and alligator on the higher timeframe.

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