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I took 100 TRADES with these 2 INCREDIBLY SIMPLE Moving Averages that create a better CHANNEL than..

Post author By Trading Rush
Post date May 29, 2021
1 Comment on I took 100 TRADES with these 2 INCREDIBLY SIMPLE Moving Averages that create a better CHANNEL than..

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I took 100 Trades with the moving average channel strategy to find its win rate, and this is what happened.

If you have watched the previous video, you most likely know how to create this ridiculously simple moving average channel. But you see, this moving average channel looks very similar to the Keltner Channels, and in both Keltner Channels and the Moving Average Channel Strategy, we buy and sell when the price opens and closes above or below the channel respectively. If that’s the case, we should expect the Moving Average Channel to perform just as good as the Keltner Channels right? Well, this is what the profit graph looked like when we took 100 trades with it on the Trading Rush Channel. It got a 49 percent approximate win rate, and that is a profitable win rate because the reward risk ratio was higher than one. But if you look closely, you will notice that the Keltner Channel made a good profit at the beginning, then gave back the profit and made a loss, and then the profit line went back in the upward direction again. When I took 100 Trades with the Moving Average Channel on almost the same market structure, the profit line went in the upward direction just like the profit line of the Keltner Channels, but it never lost multiple trades in a row.

Even though the two indicators look similar, many times the Moving Average Channel was giving better signals than the Keltner Channels. Furthermore, the Moving Average Channel gave earlier entry signals, which was a good thing in this case, and filtered some of the false signals since the moving average channel is narrower than the Keltner Channels.

For the first 75 or so trades, the profit in the Trading Rush App was going consistently in the upward direction, and the win rate was around 58 percent. So far these ridiculously simple moving averages that never touch each other, were performing as good as some of the highest win rate strategies we have seen so far. Till the 75 trades mark, the moving average channel had won 9 trades in a row, and only lost 5 trades in a row. But unfortunately, it lost 15 trades in a row soon after the 75 trades mark.

Here’s what it means. The Moving Average Channel performs just as good as some of the best trading strategies for the most part, but its biggest weakness is when the price gets choppy and breaks above and below the channel in a short period of time. The narrower channel that was the reason for earlier and better entry signals than the Keltner Channels, was the reason for too many signals in a row when the price was choppy in a slow trend, especially just before the trend reversal.

The Moving Average Channel Strategy with a 1.5 to 1 reward risk ratio, got an approximate win rate of 48 percent, which actually is very similar to the Keltner Channels Trading Strategy. However, the profit graph on the same market structure was pretty different. On one side, we have Keltner Channels that gives late signals, especially near the end of the trend, and on the other side we have two simple moving averages that give better entry signals, but can’t handle choppy slow-moving markets.

5.8+7+4.5+4.5+6.5

The Moving Average Channel Trading Strategy gets a TR Score of 28.3 out of 50, and ranks 19th from the top, above the Keltner Channels Trading Strategy, and below the Bollinger Bands Strategy.

That’s all.

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These Ridiculously Simple Moving Averages that NEVER touch each other…

Post author By Trading Rush
Post date May 28, 2021

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This is the Moving Average Channel and it is in many scenarios better than the Keltner Channels. This Moving Average is so simple that even your dog can set it up and make money with it. This is not a standalone indicator like the Keltner Channels, instead, these are 2 normal simple moving averages that don’t intersect with each other, creating a channel.

To create a moving average channel, first, you plot a simple moving average. On many charting platforms, it will come with a length of 9 and will calculate the average using the closing prices of the candles. Change the length of this moving average to 20. Then, plot another simple moving average, and set its length to 20 as well. Now you should have two moving averages on top of each other. To separate them and to create a moving average channel, make one moving average calculate its values using the high of the candles. And make the other moving average calculate its values using the low of the candles. On TradingView, you can do that by changing the source of the moving average.

Now you should have two moving averages creating a channel. These moving averages will adjust with the price movement. and will move closer to each other when the price movement is slow. and will move further away from each other when the price is trending or volatile. Remember that these are still simple moving averages. So if you want the moving average to react faster to the price movement, use a smaller period moving average, and if you want the moving average to react slower, use a longer period moving average. But increasing the length of the moving average won’t increase the size of the channel.

In the Moving Average Channel Strategy, the 20-period moving averages are used most of the time. And when the price is between these two moving averages, all entry signals are ignored.

When the price opens and closes above the moving average channel, it’s a buy signal. You can always use a longer period moving average like the 200 E MA to find the long-term trend direction. If the price is in an uptrend, set the stoploss below the pullback. Also, ignore all short signals above the 200 period moving average.

In a downtrend, when the price opens and closes below the moving average channel, it’s a sell signal. Set the stoploss above the pullback of the trend. In a downtrend, since the price has a higher probability of moving in the downward direction, ignore all long signals below the 200 period moving average.

Of course with the same method, you can create a channel with a 200 moving average, to filter some of the false signals in the slow-moving markets. But the moving average channel is mostly used with a short length like 20, to capture strong short-term moves on the smaller timeframes.

To find if it works or not in the long run, we will take 100 Trades with it in the next video and find its win rate.

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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I tested Fastest DEMA Trading Strategy 100 TIMES and this happened…

Post author By Trading Rush
Post date May 4, 2021
2 Comments on I tested Fastest DEMA Trading Strategy 100 TIMES and this happened…

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If a fast-weighted moving average can get a high win rate, and improve one of the most popular trading strategies out there, surely we should get an even better and higher win rate if we use a faster moving average, right? I tested the Double Exponential Moving Average 100 Times, to see if it can increase the win rate of a trading strategy since it reacts to price faster. The normal golden cross trading strategy we tested 100 Times, got a 42 percent approximate win rate. The 42 percent was an okay and profitable win rate because of the 1.5 to 1 reward risk ratio, but when we modified the strategy and used a weighted moving average, the Golden Cross Trading Strategy got a 48 percent win rate and had a much better profit graph on the Trading Rush Channel. In this video, the DEMA Golden Cross, on the other hand, started with few losses in a row. The Normal Golden Cross and Weighted Golden Cross made a profit at the start in the Trading Rush App. But even though the market structure was pretty much the same, the faster double exponential moving average lost money at the start, and then the profit line started to move in the upward direction, which as you can see, is almost opposite of the SMA Golden Cross Strategy.

The Double Exponential Moving Average does give faster entry signals, but those signals are only good when the movement is really good. But when the price movement is slow, the Double EMA will give a decent amount of false signals in a row. For comparison, this is a chart where the price is in an uptrend. At one point, when the price stopped making higher swing highs for a while, the Weighted Moving Average didn’t give any new signals. But since the Double EMA reacts to everything faster, it gave 4 false signals in a row. Since the market doesn’t move infinitely with the same momentum, the faster signals that were supposed to be the main reason for a higher win rate, were actually the reason for giving false signals in the slow-moving markets. The Weighted Moving Average was the sweet spot between “the good fast” and “just early false signals”, and that’s why Weighted Moving Average actually improved the win rate of the Golden Cross Trading Strategy. The Double Exponential Moving Average, on the other hand, got a 42 percent approximate win rate with a 1.5 to 1 Reward Risk Ratio, which is not a worse win rate like other strategies we have seen so far, but it is also not as high as some of the best trading strategies we have seen on the Trading Rush Channel. The Original Golden Cross also had a 42 percent approximate win rate, but this time, the profit graph in the Trading Rush App looks a lot better than the profit graph of the SMA Golden Cross.

4.2+7.5+3.5+4+3

The DEMA Golden Cross Trading Strategy gets a TR Score of 22.2 out of 50, just like the Original Golden Cross, but this time it loses points in reliability and quality of trades categories. If you come to the Trading Rush Website, it ranks 25th from the top, just below the Original Golden Cross Trading Strategy, and above the Awesome Oscillator second strategy.

The Best Use of the Double Exponential Moving Average is not to enter trades, but to book better profits by using it as an exit indicator, just like we saw in the previous video. Check out that video on the Trading Rush Channel to learn more. That’s all!

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MOST EFFECTIVE WAY TO BOOK FASTER BETTER PROFITS WITH NO LAG | with any Forex Day Trading Strategy

Post author By Trading Rush
Post date May 3, 2021
1 Comment on MOST EFFECTIVE WAY TO BOOK FASTER BETTER PROFITS WITH NO LAG | with any Forex Day Trading Strategy

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This is one of the fastest moving averages we have seen on the Trading Rush Channel, and when we created a trading strategy based around it and tested it 100 Times, it performed better than both simple and exponential moving averages. Now watch this… This is the Double Exponential Moving Average, and as you can see, it is reacting to the price movement faster than the weighted moving average. Does this mean it will be better and have a higher win rate than Weighted Moving Average?

Well, we will find out when we test this moving average 100 times. In the normal Exponential or Simple moving average, you calculate the average one time, but the Double Exponential Moving Average uses two moving averages just like the name says. This moving average is also known as DEMA and reduces the lag of a normal exponential moving average. If you plot it with some other moving averages, it sure looks less laggy and reacting to price faster. But is a faster moving average really that useful? Can’t we just use a shorter moving average to get the same result? Well, not exactly. The Double Exponential Moving Average is a bit more complicated. In a simple moving average, you calculate the average just like any other simple average. But in the Double Exponential Moving Average, you calculate an EMA first, then use that EMA value to create another EMA, and then you multiply the first EMA two times, and then subtract that value with the Second Exponential Moving Average you calculated earlier. Complicated! And using a shorter simple or exponential moving average won’t give you the same result as you can see on this chart. But at the same time, a 60-period Exponential Moving Average and a 200 period Double Exponential Moving Average are not that far from each other in a trend most of the time. However, there is a clear difference when the trend is reversing. Even though the 60-period exponential moving average is pretty much at the same place as the 200-period moving average, when the price started to move in the opposite direction, the Double Exponential Moving Average did show the trend reversal faster than the shorter period Exponential Moving Average.

In other words, it is better to use the Double Exponential Moving Average to exit your running position at a much better price by finding the trend reversal quicker, because, in the trend, there is not much difference between Double and a shorter Exponential Moving Average. When you are holding a long position, you can exit and book a profit when the price closes below the Double Exponential Moving Average. And you can book a profit on a short position when you see the price crossing and closing above the Double Exponential Moving Average. Unless you are looking to catch smaller strong moves, using a 200-period Double Exponential Moving Average to exit the positions is a good idea. Otherwise, lower Double EMA will stick very close to the price, and the price will cross it more frequently leading to false signals.

Still, we will create a strategy based around it, and we will test it 100 times to see if it performs better and to see if it gets a higher win rate than the Weighted and other Moving Averages we have tested so far. We will do that in the next video, so subscribe to see it! Thanks!