Tag: indicator strategy forex

Tag: indicator strategy forex

Is this indicator better than the MACD indicator? and will it make you more money in trading? In this video, I took 100 trades with a MACD look a like, and the results were pretty interesting. As you know, MACD was the best performing indicator we have seen on the Trading Rush Channel. If an indicator can perform better than the MACD indicator, it will be a big deal, because MACD strategy with a 1.5 to 1 reward risk ratio gave a win rate of more than 60 percent after testing 100 times, and if we stumble upon a new strategy or indicator that gives more win rate than that, we will be talking big profits. There is an indicator that looks very similar to the MACD indicator. Is this the next big thing? Will this make more money than the MACD strategy? Let’s find out.

Know Sure Thing is a momentum based indicator just like the MACD indicator. On the TradingView Platform, it looks like this, and as you can tell, it looks very similar to the MACD indicator. There is a KST line and a signal line, and the Know Sure Thing value crosses above and below a zero line. Since this is a momentum indicator, traders use it to spot all kinds of momentum indicator things like divergences and crossovers. What we want is to find out if it actually works in the long run. There are multiple trading strategies based around the KST indicator, and Here’s how one of the Know Sure Thing Strategy goes.

When the KST line crosses above or below the signal line, it can indicate a change in momentum. So when the KST or Know Sure Thing line crosses above the signal line, it’s a buy signal. Furthermore, the KST value has to be below the 0 line. Similarly, when the KST line crosses below the signal line, it is a sell signal. Furthermore, the sell crossover has to be above the zero line.

Here’s an example, the KST line crosses above the signal line and the crossover is below the zero line. If you would have bought it here, KST would have made you money. And in this example, the KST line crosses below the signal line, and the crossover is above the zero line. If you would have sold after the crossover, KST would have made you a profit. But wait, don’t be fooled by looking at these hand picked setups. This doesn’t mean that this strategy is profitable at all. If you have watched other videos on the Trading Rush Channel, like the video if you have, you already know there is one thing wrong with this setup. In this Know Sure Thing Setup, Know Sure Thing Doesn’t Know the Long term trend direction. And subscribers of this channel know that you can increase your chances of making money as a trader by taking trades in the long term trend direction.

If you take all entry signals given by the Know Sure Thing Indicator, you will probably lose money because know sure thing can give short entry signals in a strong up trending market, and vice versa. So to fix that, we will use the 200 period exponential moving average. This will show you the direction of the long term trend direction, and filter false signals.

So the complete modified Know Sure Thing Trading Strategy goes something like this. If the crossover is below the zero line, and above the 200 period moving average, The Long entry signal is when the KST line crosses above the signal line. Crossover below the zero line, and above the 200 period moving average. Stop loss below the pullback.

Similarly, If the crossover is above the zero line, and below the 200 period moving average, the short entry signal is when the KST line crosses below the signal line. Above the zero line, but below the 200 period moving average. Stoploss goes above the pullback of the trend.

In this example, price is in a strong uptrend, we can tell it is in an uptrend because it is staying above the moving average. The KST indicator gave a bullish crossover below the zero line. So the entry is after the crossover, and stoploss is below the pullback.

Here, price is below the 200 period moving average, so we will only look for short entry signals. The KST indicator gave a short entry signal, and the signal was above the zero line. So the entry is after the crossover, and stoploss is above the pullback.

Now that you understand how the strategy works, let’s test the Know Sure Thing Trading Strategy 100 times, to make sure the know sure thing actually knows what it is talking about. After testing 100 times, here’s what I found out.

Number 1. Know Sure Thing is just like other momentum indicators, it shows the strength and weakness. You can use this information to find if the pullback of a trend is getting weaker or not. Obviously, we are using the KST indicator as a trend following indicator, and in a trend, we are using it to find the end of a pullback. And while testing, it was indicating the end of the pullbacks with a good accuracy. Now, I say good, but it is not as accurate as the MACD indicator. Earlier in this video, you saw me compare it with the MACD indicator, and if you put them side by side, they visually look very similar. In fact, if you remove the histogram from the MACD indicator, most people probably won’t be able to tell the difference between the two. But if you look closely, you will notice something. During backtesting, the KST indicator was not as good as the MACD indicator, and if you look closely, you will notice why. As you can see, the entry signals given by the KST indicator are a little bit late than the entry signals given by the MACD indicator.

Look at this example. Price is in a downtrend, and both of them gave a short entry signal. But as you can tell, the MACD signal was way better than the KST signal. With the MACD signal, with entry at the MACD candle and stop loss above the pullback, you could have made 3 times more profit than your risk. But on the other hand, after the KST signal, price didn’t even go down enough to reach the 1 to 1 reward risk ratio.

In other words, the KST indicator is indicating the end of a pullback quite accurately, but it is a bit late, especially when compared with the MACD signals. Because of this, the probability of the price reaching you higher reward risk ratio profit target becomes lower.

In the end, after 100 trades with the Know Sure Thing Indicator, I found out that the win rate of the KST indicator is approximately 52 percent with a 1.5 to 1 reward risk ratio. In the Official Trading Rush App, you can see that the Know Sure Thing Trading strategy made a profit! It made a profit of 3000. The highest profit was 3300. The profit graph also looks consistent with 6 losses in a row, but 7 winners in a row. This win rate is not as bad as some other trading strategies we have seen, but not as good as some other strategies we have tested on the Trading Rush Channel. But one thing is sure, the Know Sure Thing really knows what it is talking about. If you haven’t seen trading strategies with more win rate than this, check out other trading strategy videos on the Official Trading Rush Channel.

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Ultimate Candlestick Patterns Trading Secrets that no one tells you

Post author By Trading Rush
Post date November 22, 2020
9 Comments on Ultimate Candlestick Patterns Trading Secrets that no one tells you

candlestick patterns trading

Tag: indicator strategy forex

Watch this… which one do you think is the Engulfing Candle Pattern out of these 3 Charts? Answer sounds pretty easy right? If you say the third one, you are actually wrong but at the same time you are also correct. Trading is not always a yes or no statement. In reality, trading is so complex that this question will get two different answers. Many will say it’s this one, but there will be some who will say all of them are the same picture. And the thing is, both of them are right. To understand why some traders will say something strange, when the third one clearly has the engulfing pattern, we will first have to understand what the engulfing pattern actually means, and how it is formed. Let me explain.

In one of the previous videos, we tested the Engulfing candlestick pattern 100 times, and found out that the engulfing works more than 50 percent of the time, and price actually goes in the direction of the engulfing candle. If you haven’t watched that video, maybe consider watching it after this video.

Many people consider the Engulfing Candlestick pattern to be one of the important candlestick patterns, because it can tell a lot about the buyers and sellers in the market. For example, let’s say price is making red candles in a downtrend. If it is making red candles, there is a selling pressure, or in other words, there are more sellers who are willing to sell at the current price. Sellers are ruling the market and some buyers are not interested in participating as multiple red candles are forming in a row. But then, for some reason, price makes a big move up, and completely engulfs the previous candle. For some reason, let’s say because the price touched a strong support area, many buyers got interested in buying in this area. The buying pressure was so high, that buyers completely took over all the sellers from the last two candles. But hold on a minute, according to this theory, an engulfing candle was formed, because more buyers were interested in buying when this candle was forming. But what if the same number of buyers bought at the same prices, but a little bit slowly. This is a screenshot of a forex pair on the 15 minutes timeframe. If the same number of buyers would have bought the pair a little bit slowly, two 15 minutes candles would have formed instead of one. But hold on a minute, if the same transaction took place, and the same number of buyers and sellers participated on both these charts, these two charts tell the same story right? and the only difference is the time? Well, you are absolutely right!

Candlestick pattern tells you a story about what happened in the last few candles. And the bullish engulfing patterns shows you that buyers took over the sellers. But what many beginner traders don’t pay attention to, is the time. Your engulfing pattern is limited to your chart timeframe. If you look at the charts on the 15 minute timeframe and an engulfing pattern forms, it indicates that buyers in the last 15 minutes took over the sellers from the 15 minutes before that. This information is good, especially if the engulfing pattern forms near a support area. Let’s say you are waiting for the price to reach your support level, you are waiting for some kind of entry signal, like a candlestick pattern to form near the support area. If an engulfing pattern appears, good for you, now you have an open position, let’s hope it makes profit. Oh look at that, it made a profit. You took a trade using an engulfing pattern and it worked. But what if, instead of engulfing the last two candles in 1 15 minute candle, it doesn’t move much for the first 13 minutes, and starts to make a big move up in the last 2 minutes. Since you were focused on your 15 minute timeframe, buyers according to you, got interested in buying at the end of this candle. When the price started to go up, the 15 minute candle ended, and a new 15 minute candle appeared. So the upward move continued on the next 15 minute candle. Now, no engulfing pattern was formed, even though the same number of buyers and sellers participated in this upward move. At the start of this video, when I asked which one is the engulfing pattern, If you said only the third one, then you would have missed this trading opportunity and the profit, because there was no candlestick entry signal.

If you answered that all of them are telling the same story, then you would enter this trade right here, because you saw that buyers still took over the sellers just like they would in a engulfing pattern. And the only reason you don’t see an engulfing pattern, is because one candle ended and the other one started when the price started the big move up. Furthermore, we can still see that this is an engulfing pattern, if we switch to the 30 minute timeframe. Since you were watching the chart on the 15 minutes time frame, these two candles were formed on the 15 minutes time frame. So on the 30 minute timeframe, these two candles will be one big engulfing candle.

The reason I said the first question will get two different answers was because, these two charts tell the same thing but on different timeframes. If you have a little bit of experience in reading trading charts, you can tell that they are telling the same story. On the 15 minutes time frame, one red candle was formed, and then a big candle completely engulfed it. But if you look closely, on the 5 minutes time frame, price was moving slowly in the downward direction. It took 5 candles just to make this small downward move. But then suddenly, in just two candles, price made an upward move, that was higher than 5 candles. If two candles made a move, that took more than 5 candles to make, by only looking at the 5 minutes timeframe, you can imagine that this price action will form an engulfing pattern on the higher timeframe. Similarly, if it took three 15 minutes candles to make this move, where the price ended approximately where it started, you can imagine how the same price action will look combined on the higher timeframe.

As you can see, all three charts I showed at the start, are from the same forex pair, just the timeframe is different. And now you can see how they all are telling the same story. That’s why both of the answers are right. Only the third one is the engulfing pattern, but if you look at charts differently and imagine how it will look to different traders on different time frames, for you they are the same thing, because they are pretty much telling the same story.

But how to use this information to our advantage? Instead of showing you a random trade, I will show you the trade I actually took on the 6th of November. This is the trade I shared on the Trading Rush Patreon Page on the 6th Nov. As you can see, at first, I took a short trade but the price touched the stoploss immediately. But right after my stoploss was hit, price had a big rejection from the resistance area. The two 5 minutes candles at the resistance area looked like this. And if you imagine how they will look on the 10 minute timeframe, you can see that the resulting candle looks like another candlestick pattern. And this candle opened below the resistance area, tried to go above the resistance area, had a big rejection from above, and closed below the resistance area. In simple words, even though it looks like the price has crossed above the resistance and is going to go up, it is actually showing signs of going down. So I took another short trade, and this time it made a profit, because the price made a move down. Furthermore, the previous loss was recovered, because the trades achieved a 2.5 times more profit than the loss.

So the point is, candlestick patterns in trading can give a lot of information about the price movement, but always remember how they are formed and don’t ignore the hidden candlestick patterns. Because then you might see what many beginners don’t.

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I tested FRACTAL Breakout Trading Strategy 100 TIMES and then this happened…

Post author By Trading Rush
Post date November 18, 2020
2 Comments on I tested FRACTAL Breakout Trading Strategy 100 TIMES and then this happened…

$fractal breakout trading strategy$

fractal breakout trading strategy

Tag: indicator strategy forex

Does Fractal Breakout Trading Strategy even work? Is this indicator worth trading in the long run? Will it even make money in forex and stock market trading? Well, I have tested the Fractal Indicator before, and it didn’t have a good win rate. In fact, when I tested the Fractal Indicator 100 times, it actually didn’t give a profitable win rate at all. The profit graph in the Trading Rush App was negative and the profit graph didn’t look good either. The strategy that we used in the last fractal video, was based on the trend direction, and in that strategy, the long entry signals were taken when a down arrow appeared in an uptrend. Similarly, the short entry signals were taken when the up arrow appeared in a downtrend. In simple words, we used the fractal indicator to create a trend following strategy, where fractal fractal was trying to give entry signals at the end of the pullback. And as you already know, the fractal indicator failed horribly at that because it gave too many entry signals in a short amount of time. But today’s fractal trading strategy is different. It is better, and here’s how to use it.

This Fractal Trading Strategy is better than the previous fractal strategy, because while testing the strategy 100 times, I found some really good advantages of using this strategy over the previous one. In the last fractal video, we took trades as soon as the fractal arrow appeared, but in this strategy, we wait for the price to break above or below the candle that has a fractal arrow. Let me explain. This fractal strategy is more of a fractal breakout strategy. A fractal arrow appears on a candle when two more candles after it are closed. The buy entry is at the closing price of the candle, that crosses above the high of the candle with the fractal arrow. Get it? Similarly, Once a down arrow appears on a candle, the sell entry is at the closing price of the candle, that closes below the low of the candle that has the fractal arrow. Very simple. For example, here, first an up arrow appears, then price crosses and closes above the entire candle with the up arrow. Your entry is at the closing price of the first candle that crossed and closed above the fractal candle. And in the second example, first the down arrow appears, then price crosses and closes below the entire candle that had the down fractal arrow. Your entry is at the closing price of the first candle that crossed and closed below the fractal candle. In simple words, in a long setup what the price is really doing is, breaking above a high point that made the price move down. If a price level makes the price move down, it means there is a selling pressure near that level. If price breaks through that level, the sellers will probably get out of the market, which will result in more buying pressure. Similar thing applies to a short setup, just the opposite. I will explain more about how buyers and sellers play an important role in a future video, maybe subscribe to see that. In this video, the fractal breakout strategy that we have seen so far, is not that good, because it is not a trend following strategy. As I have always said on the Trading Rush Channel, if you want your trades to have a higher probability of winning, take trades in the direction of the trend and not against it.

So, lets use a 200 period moving average to find the direction of the long term trend direction. Price above it indicates an uptrend, and price below it indicates a downtrend. So here’s how the modified fractal breakout trading strategy goes. If price is above the 200 period moving average, and if an up fractal arrow appears on a candle, the buy entry is at the closing price of the candle, that crosses above the high of the candle with the fractal arrow. Stop Loss goes below the candle with the down fractal arrow. If the price is below the 200 period moving average, and if a down arrow appears on a candle, the sell entry is at the closing price of the candle, that closes below the low of the candle that has the fractal arrow. Stop Loss goes above the up fractal arrow.

In this example, price is above the moving average, and crossed above the entire fractal candle. So the entry is at this candle, and stop loss below the pullback indicated by the fractal. And in this example, price is below the moving average, and crossed below the entire fractal candle. So the entry at this candle and stop loss above the pullback indicated by the fractal indicator. Just remember that pullback indicated by the fractal indicator won’t be always right. Furthermore, it is a good idea to only take trades, where both the fractal and the entry candles are on the same side of the moving average. This will help you avoid the range market, because in the range market when the moving average is flat, the fractal and the entry candles are usually on the opposite side of the moving average.

So, I tested the Fractal breakout trading strategy, and here’s what I found out.

Number 1. This fractal breakout strategy is nothing like the previous fractal trading strategy. This one is better and actually gives proper entry signals. Now, since this is still a fractal indicator, it gives a lot of entry signals in a short period of time. But the best thing I liked about this strategy when compared to the previous one, is that it doesn’t try to predict the end of pullback multiple times in a row. The previous fractal strategy gave multiple long entry signals, when price was still going straight down in a pullback. While testing the fractal breakout strategy 100 times, I have found out that most of the time, this strategy will give entry signals when the pullback is actually over. It won’t spam you with multiple entry signals when the price is clearly not preparing to go in your favor.

Number 2. The fractal breakout strategy filters some of the false signals on its own. For example, when the previous fractal strategy gave a buy signal, there was still a high chance that price could go sideways after the end of a pullback. But since the current fractal strategy gives buy entry signal when a candle closes above the previous swing high, you are kind of buying above a price level, where price had a high chance of going sideways because of the selling pressure. If it sounds confusing, look at the chart for reference.

Also, if I haven’t mentioned already, you only have to look at the latest fractal candle to find the entry signals. For example, when price is giving a bigger pullback in an uptrend, you might see multiple up fractal arrows in a row. But only the latest fractal candle is valid. So your long entry signal is when a candle closes above the last fractal candle with the up arrow. Forget all the candles before that.

So when you are buying with the fractal breakout strategy, you are actually buying at the candle that broke above the previous swing high, which is a good thing as breaking above the previous swing high can indicate a buying pressure. During the testing, when the overall trend direction was good and price was not moving sideways, the fractal breakout trading strategy gave a lot of valid entry signals. But when the long term trend direction was flat, it gave couple of false signals, but not like the previous fractal strategy. The previous one gave a lot of false signals during a range market. This one performed much better, because in this strategy, price has to break above or below the previous swing of the trend, and in the sideways market, many times price didn’t break through a new swing for the strategy to give an entry signal.

So after testing the fractal breakout trading strategy 100 times, I found out that the win rate of the Fractal Breakout strategy is approximately 48 percent. That’s right, similar to the beep boop indicator we tested in the last video. But this is much better than the previous fractal strategy. If we compare the two, you will see that the last fractal strategy only gave an approximate win rate of 38 percent, which is way lower than what we got here. The price graph of the breakout strategy also looks a lot cleaner and one sided. But since the fractal indicator gives a lot of entry signals, you should make sure that you always take trades when the market is in a trend, because if you don’t, you will end up taking multiple losing trades in a sideways market.

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BEST Money Management Trading SECRETS using 10 Coin Tosses…

Post author By Trading Rush
Post date November 15, 2020

money management trading strategy

Tag: indicator strategy forex

What’s the best trading indicator out there? I get a lot of comments and emails like these, and to find the best one I have even tested many different trading strategies 100 times on the Trading Rush channel. But still, what’s the best indicator out there? In almost all the testing videos I have made, especially the ones that were removed because of YouTube, I repeatedly said that money management is the key to a successful trading, and without it you might very well be a sitting duck that is waiting to be hunted by the market. Money management is one of the most important concepts you should understand as a beginner trader, but instead of explaining how proper money management can change your trading results for good, I took 10 trades by flipping a coin. That’s right ladies and gentlemen, I tossed a coin and took 10 trades to show you the importance of money management in trading. So what do you think happened?

In this experiment, when the coin landed on heads, I took a long position. And when the coin landed on the tails, I took a short position, simple as that. Some of the wonderful Patrons at Patreon also participated in this experiment, so 7 out of 10 coins were tossed by Patrons and here are the results. The first coin landed on heads which means buy, so let’s take a long position on the Euro USD pair. Let’s set the stop loss at a good enough distance from the entry, and let’s set the profit target size 2 times more than the stop loss. For example, if the stop loss is 10 pips, the profit target will be of 20 pips. As you can see, we are using a 2 is to 1 Reward to Risk ratio. In simple words, if we win, we will make 2 times more profit than our potential loss on the trade.

You see, trading is a simple game as long as you see it as any other business. For example, let’s say there is bill the business man. He runs an apple store where apples degrade in quality as time passes. Bill the business man magically gets $119 worth of fresh apple stock in the morning for free. But here’s the twist, if he can’t sell all the apples before midnight, he will have to pay for the remaining apples from his own pocket. Since the apple will become pretty much worthless at midnight, his goal is to sell all the apples before midnight. Obviously, not everyone is going to buy all of his magical apples every day, some of them will become worthless at midnight. So why would Bill the businessman risk his money in such a risky business? well well well, bill the businessman is a smart businessman. He has somehow observed that there is a high chance that people will buy 40 percent of his magical apples before midnight. So if he sells the apple for twice the price, bill the businessman will make some profit. If 100 apples are worth $119, 1 apple is worth $1.19 for bill the business man. But if he sells 40 apples out of those 100 before midnight for $2.38 each, in other words for twice the price, Bill the business man will make a guaranteed profit before midnight. Because if he only sells 40 apples out of 100, 60 apples become worthless at midnight. 60 apples are worth $71.4, which means bill the businessman made a loss of around 71 dollars. But since he sold 40 apples for twice the price, Bill the businessman made a total profit, because 40 apples worth $2.38, equals $95.2, and if we minus the $71.4 bill the businessman lost from not selling the 60 apples, total profit will be $23.8. So if Bill the business man continues to book double profits everyday, he will always make money in this business even when his win rate is only 40 percent.

This is the kind of mentality you need as a trader which many beginners lack at the beginning. The first trade I took on the Euro USD pair was lost. The price went straight through the stop loss. The next trade on the GBP USD pair was also lost. Price hit the stop loss in literally the next candle. GBP JPY also followed a similar pattern. So far we are down 3 trades and that’s not a good start. But in the next trade which was on USD CAD, price did go in the entry direction and hit the profit target. Since the profit target was set 2 times the distance of the stop loss, we made a 2 times more profit. Now, we are only down 1 trade in total. Luckily, the next trade on the USD CHF pair also made a profit. Now we are no longer in a loss and are up by 1 trade in total. But then the trade on EUR AUD was lost, but since we risked half the amount than the potential profit, the total profit was back to breakeven. Unfortunately the trade on EUR CAD was lost, so we are back in total loss. But then the trade on AUD CAD made a profit, and because of the double profit, instead of breaking even, we are back in the profit. But then the GBP CAD trade was a loser, and the total profit was 0. But then, the 10th and last trade that was taken on CAD JPY, made a profit, so in the end, we are up in profit without even using a proper trading strategy. Now obviously, you are not going to make money in trading in the long run by flipping a coin. But in this experiment, we made a profit and we didn’t even consider the trend direction while taking the trades.

Price has a higher chance of making a big move in the direction of the trend. Imagine if you simply use a proper money management technique with a decent trading strategy, you are almost guaranteed to make a profit as long as you take trade with your brain and not with your emotions. Even if your heart rate goes up while taking trades, you are not going to blow up your account if you book more profits than your potential loss with a decent strategy. Just remember, that the win rate goes up if the reward to risk ratio goes down, and win rate goes down if the reward to risk ratio goes up. So if you are going to use a high reward to risk ratio like 3 is to 1, just remember that you can easily lose multiple trades in a row because the win rate of the strategy will go down. And just because you are getting a high win rate, doesn’t always have to mean you are going to make a profit in the long run if you are taking less profit than your potential risk. You should always prefer taking trades in the direction of the trend, because even if you have a bad strategy, it will perform a little bit decently with proper money management in the trend direction. In the strategies I have tested 100 times on the Trading Rush Channel series, I tested most of the trading strategies in the direction of the trend, and with a good reward risk ratio. And because of that, most of them made a profit in the end. So be like Bill the business man, and manage your money.

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I made a trading indicator and it actually WORKS after testing 100 TIMES – Beep Boop Strategy

Post author By Trading Rush
Post date November 10, 2020

beep boop trading rush

Tag: indicator strategy forex

I made a trading indicator and it actually works after testing 100 times. In the last video I taught my computer to trade on its own, and in that video, we created an indicator called the beep boop indicator, I know. If you haven’t watched that video, consider watching it before this video, because in that video, Bill the computer actually made a profit with the beep boop indicator. Since, bill the computer made money with the beep boop indicator, can we make money with it as well? Well, why don’t we find out after we test it 100 times! I mean imagine if it works and gets popular and people start writing articles about it.

The Improved Version of the Beep Boop Indicator for FREE : https://www.patreon.com/posts/trading-rush-52806962

Since the last video, I have improved the beep boop indicator even more. This is how the beep boop indicator looks like on TradingView. It is based on the MACD indicator and comes with green and red bars. When a green bar appears on the beep boop indicator, it indicates a buying pressure. When a red bar appears on the beep boop indicator, it indicates a selling pressure. Furthermore, the beep boop indicator uses a 50 period exponential moving average to calculate its values. If you watched the previous video, you probably noticed that this beep boop indicator looks a little bit different. In the last video, the buy entry signal was when two green bars appeared in a row, and the sell entry signal was when two red bars appeared in a row. Exit signal was when two opposite bars appeared in a row. Furthermore, the red and green bars only appeared in a short term uptrend. In other words, if the price was above the 50 period moving average.

The new version of the beep boop indicator is better, because it gives buy and sell signals at the same time. In the new version, the long entry signal is when the first green bar appears, and the sell signal is when the first red bar appears. Furthermore, an exit signal is when the white bar appears for the first time. Also in the new version of the beep boop, price doesn’t always have to be above or below the 50 period moving average, you can change it anytime you want.

Since we have tested other trading strategies 100 times with a fixed reward to risk ratio, I have tested this strategy with a fixed reward to risk ratio as well. Furthermore, I used the 200 period exponential moving average to find the long term trend direction.

So here’s how the complete beep boop trading strategy goes. If the beep boop indicator gives a green bar, and if the price is above the 200 moving average, the long entry signal is at the first green bar. Stoploss goes below the pullback.

Similarly, If the beep boop indicator gives a red bar, and if price is below the 200 period moving average, the short entry signal is at the first red bar. Stoploss goes above the pullback.

So I tested the beep boop indicator 100 times, here’s what happened.

Number 1. At the beginning, the beep boop indicator gave 10 winning trades in a row, and till the 28th trades, the profit on the profit graph was almost going straight up. The beep boop gives a decent amount of entry signals in a short time period. It is heavily based on the MACD indicator. MACD strategy had an excellent win rate, but one of the reasons it worked so well, is because it didn’t give many entry signals in a short time. At the start when price was trending strongly, the beep boop indicator performed really well. Most of the time, the entry was not too late, but was also not too early, so the stop loss that was set near the pullback, was at a good enough distance from the entry, especially in a trend.

Number 2. The win rate in the Trading Rush App was pretty high at one point even with multiple trades, but when the trend started to change direction, the beep boop indicator started to give false signals. The only time you should consider using the beep boop indicator, is when the market is giving relatively smaller pullbacks in a one sided market. For example, the MACD strategy had an excellent win rate of more than 60 percent, and in that strategy the MACD crossover has to be below the zero line in a buy setup, and that does not happen if the price does not give a relatively bigger pullback. Since the beep boop indicator is based on the MACD indicator, it’s like taking entry signals with the MACD strategy but with few extra conditions and without following the zero line rule. When MACD or some other strategy is not giving an entry signal in a strong trend, and you feel like you are missing out on a big move, the beep boop indicator can be useful because it gives multiple entry signals even in a strong trend.

Number 3. The beep boop indicator is excellent for finding the trend direction. If my computer can learn to find the trend direction with it, it should be pretty easy for everyone. You can even use it while doing multi timeframe analysis. For example, you can use the beep boop indicator on a higher timeframe to find the trend direction. If the beep boop indicator is forming green bars, the trend direction on the higher timeframe is up. So it is a good idea to look for long trading opportunities only on the entry time frame.

So after testing the beep boop indicator 100 times, I got an approximate win rate of 48 percent with a reward risk ratio of 1.5 to 1 which is pretty good. It gave 10 winners in a row when the price was trending in one direction for a long time. And it gave 7 losers in a row when the price was changing the trend direction or was in a range. But as you can see in the Trading Rush App, during the backtest, it managed to make a profit of 2000. The custom indicator with a professional name that we created for Bill the Computer in the last video, actually works.

Since this is a custom indicator, and if you want to try it yourself, here’s how to install it on TradingView. This is a free indicator but you won’t find it on TradingView under the public library, because I’m not publishing there for two reasons. Number 1, it will show some of my account information and I don’t want that in the long run. Number 2, not everyone uses Trading View. So I will share the source of the Beep Boop indicator on the Patreon Page or on the Official Trading Rush Website for free. This way people who use different trading platforms can read and understand how the Indicator was written without signing up for trading View. I have already shared the previous version of the beep boop indicator on Patreon for free. To Install it on TradingView, just copy the source code from the Patreon page, and paste it in the Pine Editor on TradingView. Click save and add it to your chart. It will be available under the “My scripts” section.

Now, like I said before, the Indicator uses MACD and Exponential moving average to calculate its values, and if you click on the indicator settings, you can change some of those values. For example, by default, it gives a buy signal if there is a short term uptrend going on, and gives a sell signal if there is a short term downtrend going on, and it uses a 50 period moving average to find that short term trend. You can change that value if you want to experiment with it on your own.

I taught my computer to trade with EMOTIONS and it WORKED! Intraday Trading Strategies with AI

Post author By Trading Rush
Post date November 7, 2020
1 Comment on I taught my computer to trade with EMOTIONS and it WORKED! Intraday Trading Strategies with AI

intraday trading strategies day trading AI

Tag: indicator strategy forex

I taught my computer to trade with emotions, and it worked! For the last two weeks I have been teaching my computer to take trades in forex with emotions. Now hold on a minute, what do you mean by emotions you ask? Well I say that’s a good question. You see, there are many trading bots out there, most of them are dull. So I thought while reading your angry comments on the Fibonacci video, what if I can teach my computer to take trades so I can watch some of that wolf of wall street on my second monitor. Now don’t you think that we are going to build a normal trading bot in this video, no no no. We are going to teach my computer to look at a trading chart, analyze it, calculate everything and tell the broker to execute the trade. Let’s call the computer Bill the computer for this video. Now you might think that bill the computer is going to simply read the charts, process it, and send that information to the broker? Well here’s the twist. Bill the computer is a little bit smarter than that. You see in the last two weeks, I have tried to make my computer mimic a human trader, and I have failed literally 60 times at that. But after more than 60 failed attempts, Bill the computer can finally think like a beginner trader. How you ask? Well ladies and gentlemen, just like a novice trader, Bill the computer gets happy when he sees profits in his trading account, and gets really angry when his profits are in the negative for a long time. So ladies and gentlemen, do you think our bill the computer can make money in trading? Well, before we let Bill the computer take over, we will first have to teach him how to look for trades, for that, we will have to create our very own trading indicator. So, I created a custom indicator, and gave it a completely professional name, beep boop. That’s right, our bill the computer is going to read the data using the beep boop indicator. There are two versions of the beep boop indicator, actually there are other failed versions, but there are two main working versions. One is this one, and there is an improved one that you will see later in the video when Bill the computer tries again and succeeds.

The Improved Version of the Beep Boop Indicator for FREE : https://www.patreon.com/tradingrush

I wanted to give the computer a worst case scenario for the first time. So this version of the beep boop indicator, is basically a histogram of the MACD indicator. To make things even more difficult for Bill the computer, let’s tell him to trade on a 1 minute chart where spreads will be a lot bigger. And while we are at it, let’s tell him to take one trade every minute. Now you might think that bill the computer will lose this way, well you are not wrong, but remember, bill the computer has a trick up his sleeve. Since Bill is like a beginner trader who doesn’t know anything about money management in trading, when he gets angry after seeing negative profits for a long time, he will increase his position size by 10 times. The only way bill the computer is going to make a profit, is if he gets angry in a range, and if the price makes a move in the entry direction after that. So what do you think is gonna happen? We are intentionally setting the odds against bill the computer to see what happens, or maybe improve it in the next try.

In this version bill the computer is continuously looking for the beep boop indicator. If it sees that the last closed bar is green in color, and if the bar before that is also green in color, it tells the broker to take a long position. If he sees that the bar color is red, and if the bar before that is also red in color, it will tell the broker to take a short position. Usually it will do this with a calm state of mind. But while executing the trade, if he notices that the profit is negative for a long period of time, there is a chance that bill the computer can get angry and take a long trade if the last closed bar is green, or take a short trade if the bar is red. You can see if the trade was taken with a calm state of mind, or an angry state of mind on the right side on the screen.

Since this is a demo account for obvious reasons, I set the account size to almost half million. Since bill the computer is taking trades every minute, a bigger account will help with its higher margin. After failing 60 times, when I started the experiment where everything was working as expected, the beep boop indicator was giving red bars. At first, Bill the computer was calmly taking trades, but after seeing a negative balance in his account, he got angry and took some really bad trades. It risked 10 times more than usual. This went on for a while, but in this version, since we didn’t tell him to take trades in the direction of the trend, bill the computer took trades, but the price went sideways. Most of the time when bill the computer risked 10 times more after getting angry, the price went sideways. But at one point after a range market, price did make a move down, and bill the computer was in profit at one point, but it only lasted for two candles because price then reversed completely. When few green bars appeared on the beep boop indicator, bill the computer had to close all the trades. In the first test, bill the computer didn’t make any profit. One of the reasons it didn’t make profit, was because we didn’t tell him anything about the trend direction.

So I took a break from this project, and came back a few days later. This time, I modified the beep boop indicator to only give entry signals in the direction of the trend. This time, the green candle only appears if the price is above the 50 period exponential moving average, So this time bill the computer will take trades in the direction of the trend. Furthermore, this time I started this experiment during the overlap of the London and New York session, because price action during this overlap is a lot better and price has a higher chance of making a big move during this overlap session because of the increased volatility. If you don’t know anything about market sessions in trading, checkout the best time to trade video on the Trading Rush channel. This time when I started this experiment, the price was in an uptrend and the beep boop indicator was making green bars. As usual, bill the computer was risking 10 times more when he got angry. But this time, bill the computer only got angry once. It was at the beginning when he was in a loss, but after that, since we were testing during the overlap market session where spread was a lot smaller, price kept going up and bill the computer kept making profits. At one point, bill the computer was up by around 1300. When few red bars appeared on the beep boop indicator, bill the second closed all of his trades with a total profit. Furthermore, it looks like bill the computer exited the trades at the right time, because the price made a big move down. This time, the beep boop indicator we created for this fun experiment, gave good entry and exit signals. Does this mean the beep boop indicator has potential? Well, maybe I should test it 100 times in future Trading Rush videos to see if it works or not in the long run, so subscribe and ring that notification bell to see that. If you want to try out the beep boop indicator, maybe I will share the code on the Trading Rush Patreon Page for free. You can simply go there using the link in the description and checkout how it was written for free without becoming a patron. But if you do want to see the in-depth trading analysis on the trades that I took, maybe consider becoming a Patron at Patreon. Thanks a lot for watching!

All Videos Trading Strategies Trading Strategies Tested 100 Times Uncategorized

Bollinger Bands + RSI Trading Strategy tested 100 TIMES – Will this make PROFIT for you?

Post author By Trading Rush
Post date October 25, 2020

bollinger bands RSI trading strategy

Tag: indicator strategy forex

Can you make money with the RSI and Bollinger Bands trading strategy? No not with RSI and Bollinger bands separately, because I have already tested the Bollinger bands indicator and the RSI trading strategy 100 times, they both had a profitable win rate. With a reward to risk ratio of 1.5 to 1, Bollinger bands had a win rate of approximately 55 percent, and the RSI had a win rate of approximately 49 percent. But what if we combine these two trading indicators, will the win rate go up? Well, why don’t we find out. In this video, I’m going to test the Bollinger bands RSI trading strategy 100 times, to find its approximate win rate.

In the RSI strategy that had a profitable win rate, the long entry signals were taken, when the RSI crosses above the 30 level. And short entry signals were taken when the RSI line crosses below the 70 level.

In the Bollinger Bands strategy that also had a profitable win rate, buy entry signals were taken, when a buy candlestick pattern is formed after price crossed below the lower bollinger band. And sell signals were taken when a sell candlestick pattern is formed after price crossed above the upper bollinger band. Furthermore, a 200 period moving average was used to find the direction of the long term trend.

But when you combine these two trading strategies, things become a little bit different. In the Bollinger Bands RSI strategy, a buy entry signal is at the first candle that closes above the middle bollinger band, soon after RSI was over sold. RSI value below 30 is considered to be over sold. Furthermore, a good portion of the candle has to close above the middle bollinger band, a slight touch will be considered as invalid.

Similarly, a sell entry signal is at the first candle that closes below the middle bollinger band, soon after RSI was over bought. RSI value above 70 is considered as over bought. And, a good portion of the candle has to close below the middle bollinger band.

For example, in this long setup, the RSI went oversold, then the price made a move up. Your entry is at the first candle that closes above the middle Bollinger band. You can set the stoploss below the lower bollinger band.

In this short setup, the RSI went above 70, then price made a move down. Your entry is at candle that closes below the middle bollinger band. Stoploss goes above the upper bollinger band.

Now you might be thinking, what’s the point of using the Bollinger bands with the RSI indicator? Well, some people like to combine these two indicators to filter some of the false signals. Remember, RSI on its own was a profitable strategy. So when you use it with the bollinger bands, you are filtering some of the false signals that bollinger bands gives in some conditions. Bollinger Bands on its own was also a profitable strategy, but in the bollinger bands strategy video, we used it as a trend following indicator with the help of a 200 period moving average. When you combine the bollinger bands with the RSI indicator however, you cannot use the 200 period moving average to find the trend direction, because this strategy doesn’t give a lot of entry signals when used with a 200 period moving average. In other words, Bollinger Bands RSI strategy, is a reversal trading strategy.

We have tested most indicators on the Trading Rush channel in the direction of the trend, and because of that, many indicators performed really well. Since Bollinger Bands RSI strategy is not exactly a long term trend following strategy, will it perform any good after testing 100 times? Well, I tested it 100 times and here are the results.

Number 1. When we took 100 trades with the Bollinger bands strategy, the strategy was successful in the long run, because we traded in the direction of the trend and took trades at the end of a pullback. We also had a relatively smaller stoploss. When an entry signal according to the bollinger bands strategy was wrong, the trade was lost quickly because the stoploss that was set according to the bollinger bands strategy was small. But when price made a decent move in our favor, the profit was booked with 1.5 times more than the potential loss.

RSI strategy on its own was also profitable, because the stoploss that was set according to the RSI trading strategy was small and the reward risk ratio was good.

In the Bollinger Bands RSI strategy however, the stoploss is relatively bigger. So price has to make a really good move for the trade to achieve a good reward risk ratio.

So in other words, the things that made the Bollinger Band and the RSI strategy profitable on their own, are different in this strategy.

For example, in this buy setup, the entry according to the Bollinger Bands RSI strategy, is at the first candle that closed above the middle Bollinger band, after RSI crossed above the 30 level. Stoploss is below the lower Bollinger band.

Now, according to the RSI strategy, entry is right here when RSI line crossed above 30.

As you can see, RSI combined with bollinger bands strategy gives a late signal when compared to the signals RSI gives on its own. Late entry is not a big problem if the trade is taken in the direction of the long term trend, because price usually makes a big move in the direction of the trend. But as you already know, Bollinger Bands RSI strategy is not a trend following strategy. If you try to use the 200 period moving average, it won’t give a lot of entry signals. and because of this, the Bollinger Bands RSI strategy gives a lot of false signals. When the market was moving sideways and was in a big range, the strategy was performing ok. But when market started trending, and since this strategy doesn’t filter false signals in a trend like other strategies do, this trading strategy had a lot of losing trades in a row, when compared to other strategies we have tested on this channel.

You can use your own way of setting the stoploss and profit target to improve this strategy. Just remember that your results can be different if you use different entry and stoploss conditions. So remember to backtest your trading strategy before using it in the liive markets. You can use the Official Trading Rush App to do that. RSI when combined with the Bollinger Bands like this, doesn’t give a profitable win rate that you can make money with in the long run.

In fact, after 100 trades, the profit graph in the Trading Rush app didn’t go up. With a reward risk ratio of 1.5 to 1, the win rate of the Bollinger Bands RSI strategy I got in this backtest, was approximately 35 percent. This is one of the worst win rates we have gotten so far. There are strategies on the Trading Rush Channel that gave approximate win rates more than 55 percent. The profit graph also looks like a downtrend. At one point, this strategy gave 11 false signals in a row. RSI and Bollinger Bands on their own had better win rates than this.

All Videos Must Watch Videos Trading Strategies Trading Tips and Mistakes Uncategorized

5 MACD Strategy MISTAKES you should avoid in Trading Forex Stocks… or…

Post author By Trading Rush
Post date October 21, 2020

macd strategy mistakes

Tag: indicator strategy forex

Since the first MACD video on the Trading Rush channel, many have emailed me about how they are getting win rates as high as 68 percent. Many are getting multiple green days in a row, but then there are few people who are only getting win rates around 50 to 55 percent. First of all, you are getting more than 50 percent win rate with a reward to risk ratio of 1.5 to 1, there are people who spend a lot of money on courses to get win rates like that. If you do the math, a 55 percent win rate with a 1.5 to 1 reward ratio, is a really good win rate to make money in trading. Of course it is not good as many of you guys are getting, and not even close to the win rate we saw in the MACD strategy video. So I compared the MACD setups with 50 percent win rates, with setups of the people getting around 60 to 65 percent win rates, and found 5 common mistakes in almost all the 50 percent setups, that are keeping them away from making more money in trading.

The first mistake the 50 percent win rate setups made, that people with more than 60 percent win rates avoided, was not following all the MACD strategy rules. In the MACD video and the videos after that, I clearly said that while backtesting, I didn’t take trades that had confusing or bad entries, and you should avoid them as well. This rule was ignored by couple of people. I have taken many trades with the MACD strategy in the liive markets over the years, when I made the MACD strategy video, which was also the first video on this channel, I explained the strategy and added few rules that I personally found useful. Over the years, I noticed some downsides and advantages of the MACD strategy. So when I made that video, I added my personal rules to make the MACD strategy even more effective. One of those rules that was implied in that video was not taking trades when price has already made a big move in your favor.

One of the drawbacks of the MACD strategy, is that price sometimes makes a big move exactly on the MACD candle, or one or two candles before it.

For example, this is one of the trades I shared with the wonderful Patrons who support the Trading Rush on Patreon. In this trading setup, I did other analysis using multiple timeframes and was waiting for the MACD to give a crossover. But exactly on the MACD signal candle, the price made a big move in my favor. This makes the signal invalid, and I didn’t take it because the price already made the move I was anticipating. Furthermore, even if I had taken the entry after this big candle, the stoploss would have been so big, that price would have had to travel a lot of distance to get a decent reward to risk ratio. In other words, the probability of these setups are really low, and that’s exactly why I added the “don’t take when entry looks confusing rule”, and ignored the trades that had way too big stoplosses and other similar issues, and added 0 in profit when the entry was confusing while backtesting.

The second mistake I see a lot of people make, is using a bot or script to test the strategy. In the MACD strategy, there is a reason why I recommend setting the stoploss below or above the pullback of the trend. The pullback in the MACD strategy is really important, I will explain why in detail in a future video, maybe Subscribe to see that, and ring that notification bell so you don’t miss it. In the MACD strategy we set the stoploss just above or below the pullback. Now if you can exactly identify the end of a pullback while backtesting with a bot, there is no problem. But many people find it difficult to find a pullback. And in many of the less performing MACD setups that you guys have sent me, the stoploss is set at the wrong place. People use Fractals and other similar indicators to find the pullback while auto backtesting. A pullbacks according to the fractal indicator won’t be always right, because price action during a reversal is not always that smooth. Price can get choppy and go sideways before goin back in the direction of the trend. When this happens, indicators that you are using to find the pullback, will probably give a lot of false signals, or in other words, will turn a profitable strategy into a losing one.

One of the reasons I manually backtest instead of using scripts, is because every trade is different and setting a proper stoploss and profit target is much easier when I can see the obvious end of a pullback.

The third mistake is not trading the trend. If the price is moving sideways for a while, most indicators, except the Indicators that are designed for range market trading, will give false signals. The MACD strategy is a trend following strategy, so it works really good when the market is trending. if you get low win rates with the MACD strategy, make sure the moving average is not looking flat while entering the trades. When the moving average is flat, you should probably avoid trading on that stock or forex pair with the MACD strategy.

The fourth mistake, and it’s not really a backtesting mistake, that gave win rates around 55 percent to some, when many people got win rates as high as 68 percent, was not analyzing the market structure. If you have watched the 5 steps strategy video, you know how important multi timeframe analysis can be. In my liive trading videos, and in the trades I share on Patreon, I almost always use the multi timeframe analysis to get the big picture. Multiple timeframe analysis can help you identify price points where MACD can give a good entry signal. Multi timeframe analysis is one of the most important things you can do before taking a trade. MACD strategy gives around 62 percent win rate on its own, but multi timeframe analysis is one of those things that helped many achieve win rates high as 68 percent. If you are struggling with a strategy, try multi timeframe analysis. You can watch the 5 steps strategy video on the Trading Rush channel to learn more about that.

The 5th mistake that is seen among beginner traders, is taking 10 trades to find the win rate of a trading strategy. To see if a strategy is a profitable trading strategy or not, you will need to find its approximate win rate. 10 trades is not enough, 100 trades or more are good enough to see if something works in trading or not. Remember, the accurate win rate and approximate win rate are two different things. There is probably no such thing as an accurate win rate of a trading strategy, because the market is always changing. Stock trading many years ago was a little bit different than what it is now, that’s because of the change in liquidity. To see if a strategy works or not, you only need to find its approximate win rate, which you can do by testing it 100 times or more.

For example, if a strategy with a 1.5 to 1 reward risk ratio gives around 60 percent win rate after testing 100 or more times, there is a very high chance that the strategy is a profitable strategy as we have seen after taking 10000 virtual trades in one of the other videos. And remember, win rate of a strategy goes up if the reward to risk ratio goes down, and vice versa. A strategy can have a very high win rate and still lose money, if the reward to risk ratio is bad. Similarly, one can have a strategy with a very low win rate such as 20 percent, and still make money in the long run if their reward to risk ratio is very high. In other words, if they are taking more profit than the risk per trade. So next time when someone says that their strategy has this and that win rate, ask them with what reward to risk ratio. Because they might be taking lower profits than the risk, just to get a high win rate, and to fool you into buying their paid trading courses. Don’t fall for that.

All Videos Trading Strategies Trading Strategies Tested 100 Times Uncategorized

I took 100 trades with MACD + STOCHASTIC Trading Strategy and the results were…

Post author By Trading Rush
Post date October 18, 2020

macd stochastic trading strategy

Tag: indicator strategy forex

If we combine the MACD with the Stochastic indicator, will you make more money in trading? Does the MACD and Stochastic indicator even work together? Well, MACD is one of the best indicators we have tested on the Trading Rush channel. We found out that the MACD indicator has a really high win rate when compared with other indicators we have tested so far… but can we increase that win rate even more by combining the MACD with the Stochastic indicator?

Now I haven’t tested the Stochastic indicator yet, but I have tested the Stochastic RSI trading strategy 100 times, and it didn’t had a very good win rate. In fact, the win rate it had was even worse than the regular RSI trading strategy. But that’s Stochastic RSI, not the Stochastic indicator. I’m going to test the Stochastic indicator 100 times on its own in the future videos. So Subscribe to the Trading Rush channel and ring that notification bell, to see Stochastic and other trading indicators tested 100 times to find their win rates, because you don’t want to trade with a strategy that doesn’t even work.

In this video, I’m going to test the MACD and Stochastic trading strategy 100 times to see if it works. Now you already know about the MACD strategy so I won’t go into detail about it. If you don’t know about the best MACD trading strategy, check out the first video on this channel.

In the MACD strategy video, I said buy when the MACD gives a crossover below the zero line, and sell when the MACD gives a crossover above the zero line. But in the MACD and Stochastic trading strategy that you guys have brought to my attention, long trades are not necessarily taken below the zero line, and short signals are not always taken above the zero line.

In my MACD strategy video, I said to buy below and sell above the zero line because of how the MACD is calculated and works. I will explain why zero line of the MACD indicator is so important in a future video.

In the MACD and Stochastic strategy, the rule that made the MACD strategy so successful is broken. Here’s how the MACD and Stochastic strategy goes.

When the K line of the Stochastic indicator, crosses below 20, buy at the bullish MACD crossover. Bullish MACD crossover is when the MACD line crosses above the signal line. The crossover doesn’t have to be below the zero line. For example, here, first the K line of the Stochastic indicator went below 20. When this happens, it means the price is oversold and we should look to buy. But we won’t buy until we see a bullish MACD crossover after the Stochastic oversold signal. Remember, the buy signal is only valid, if the MACD crossover comes after the Stochastic oversold signal. Set your stoploss just below the swing low.

Similarly, when the K line of the Stochastic indicator, crosses above 80, sell at the bearish MACD crossover. Bearish MACD crossover is when the MACD line crosses below the signal line. For example, here the K line of the Stochastic indicator went above 80. It means that the price is over bought and we should look to sell. But we will only sell when a bearish MACD crossover signal is generated after the Stochastic over bought signal. Remember that MACD sell signal has to come after the Stochastic over bought signal. Set your stoploss just above the swing high.

Now this is not a trend following strategy. As you already know, on the Trading Rush channel, we trade in the direction of the long term trend direction. We can use the 200 period exponential moving average to find the trend direction. A long entry signal given by the MACD and Stochastic strategy is only valid, when the entry candle is completely above the moving average. Similarly, a short entry signal is only valid, when the entry candle is completely below the 200 period moving average.

So, I tested the MACD and Stochastic trading strategy 100 times, and here’s what happened.

Number 1. As you probably guessed, the false signals that we filtered in the MACD trading strategy video, were taken in this strategy. Since MACD is an excellent indicator when it comes to indicating the end of a pullback in a trend, not all crossover signals taken without the zero line rule were bad. I tested the strategy on the 30 mins timeframe and on the Euro JPY pair, and I used the official Trading Rush App while backtesting. You can download the Trading Rush app from the play store or using the link in the description. Use it while testing your trading strategy, it will calculate win rate and other data in just one click.

Number 2. Since we used the Stochastic indicator to find overbought and oversold areas, the Stochastic indicator was acting like a filter system. It was filtering false MACD trades by only allowing long and short signals at the over sold and over bought zones respectively. And during the backtest, I noticed that whenever the bullish MACD crossover was below the zero line, the Stochastic was usually in the oversold zone. What this means is, the buy and sell signals we get using MACD strategy, are usually near the oversold and overbought zones. In simple words, the MACD strategy that we have already tested with the zero line rule is better than this.

Number 3. Like other indicators, MACD and Stochastic trading strategy works really good when the market is trending. If you look carefully, you will notice that there is a delay between the Stochastic signal and the MACD signal. And you can also notice that when MACD gives a long entry signal, the Stochastic is already near the overbought zone which can indicate a selling pressure. You can notice a similar pattern in a sell setup. Since this is a trend following strategy and since price goes in one direction in a trending market, indicators like the Stochastic will show patterns like these, and they are completely fine, especially in this case where we are using the stochastic to find the end of a pullback in a trend. But while backtesting, I noticed that in an uptrend, most of the long trades, had a higher profit potential when the stochastic K line, was below the 80 level at the entry candle. Similarly in a down trending market, most trades had a good reward to risk ratio when the stochastic K line was above the 20 level at the time of the entry. So in other words, to improve the MACD and stochastic trading strategy even further, you can filter trades by only taking long entry signals if the K value of the stochastic indicator is below 80. Similarly, you can get better profit potential if you only sell when the k value is above the 20 level.

So after testing the stochastic and MACD strategy 100 times, I got a win rate of approximately 53 percent. Now remember, I tested the strategy with a 1.5 to 1 reward to risk ratio, in other words the profit potential was more than the risk, and because of that, the MACD and Stochastic indicator trading strategy, made a profit of 3250 in this backtest. It had 6 winners in a row and 5 losing trades in a row. The profit graph also looks pretty good when compared with other indicators we have tested on the Trading Rush channel. MACD and Stochastic trading strategy is a profitable strategy. It didn’t achieve a higher win rate like the MACD did on its own, but this strategy is definitely in the top 5 best strategies we have tested so far list. Let’s see how long it can stay in that list, and lets see if other strategies can perform even better when we test them 100 times in the future videos.

All Videos Trading Strategies Trading Strategies Tested 100 Times Uncategorized

I traded 100 TIMES with the Stochastic Trading Strategy but the win rate was…

Post author By Trading Rush
Post date October 18, 2020

stochastic trading strategy