Tag: stock market

Tag: stock market

I’m going to rank the best and worst trading strategies I have used in my seven eight years of trading journey. Not only that, I’m also going to rank other best methods, tools, etc. Basically, I’m going to combine my seven eight years of trading experience into one video so you don’t have to waste years of your life just to know what I know now. Please remember not to get offended if I say your favorite strategy is trash. Everything I’m going to say is based on my ten thousand hours of live trading experience and is what I actually found throughout the years. Everyone’s trading journey will be unique!

This is a Tier List. Strategies I’m going to put near the top of the list are good, and near the bottom of the list are bad.

Let’s start with the Fibonacci Strategy. This is when someone takes trades just because the price bounces slightly from Fibonacci price levels. This strategy is pretty much garbage. When I tested it, the data showed that the Fibonacci levels don’t provide any noticeable edge. It never reliably worked for me in the live market, either. Many times, when it worked, the price was actually reacting to normal support resistance areas or just reversing from a random spot. I will put the Fibonacci strategy in the F Tier. On the other hand, it is a good tool to see if the pullback entry is good or late. For example, in an uptrend, if you place the Fibonacci like this, and the long entry point is below the 50 Fibonacci, I see it as a decent entry.

The next one is Ichimoku Cloud. This is one of the best indicators I have used. It looks like a mess, but it solves a lot of problems beginner traders might have. For example, for a trend trader it filters slow or bad markets. It shows where the price is trending. It even gives an entry point. Other than the confusing aspect of the indicator, the Ichimoku Cloud is pretty good. I would put it in the C Tier.

Next is the Stochastic. To be honest, I found that Stochastic and Stochastic RSI indicators give more false entry points. In my trading journey, I haven’t found them that reliable. When I tested the Stochastic strategy 100 times in one of the previous videos, it only got around a break-even win rate. So, I would place it in the E Tier. Also, remember that by clicking on the card that appears at the top right corner, you can watch the detailed video on the strategies I’m mentioning here.

The next one is SuperTrend. This is one of the best indicators I have seen. It shows where the market is trending in one of the clearest ways possible. Its strategy of taking trades when it switches the trend also had a profitable win rate in my testing. Overall, it’s a very good indicator, especially for day trading. I would put it in the C category with Ichimoku Cloud.

The next one is the Fractal Indicator. This just sucks. This indicator basically spams arrows for every small price reversal. You can adjust its setting to identify bigger reversals. But in my experience, it’s not that reliable at that, either. One of the Fractal strategies is taking long trades when the Fractal arrow appears below the candle. But this just doesn’t work. It got one of the worst win rates in my testing series. On the other hand, when we take long trades after the price breaks above the fractal candle like this, the strategy gets a better win rate. But overall, it still sucks. I would put it in the F Tier. There are better indicators than this.

The next on the list is the Alligator. This is one of the most useful indicators I have used. Beginner traders will benefit most from this. It shows not only the trend direction but also the strength of the trend. It even shows when to not do trend trading. I would rate it in the C Tier.

The next one is the Parabolic Sar. This indicator is mainly used for setting good stop-losses. And to be honest, it does its job very well. I would put it in the C Tier.

Money Flow Index is the next one, and let’s just say it doesn’t flow money in the pocket that well. I would place it in E Tier next to Stochastic.

Next is the Golden Cross Strategy. This is one of those ancient strategies that survived different market conditions and for a good reason. It just works, but mostly on the higher timeframes, such as 1 Day. I would say I have found this strategy more reliable on the stock market higher timeframe. Still, it’s not something I would use as the main strategy. So, it goes in the D Tier.

Next is the Breakout Strategy. This has never reliably worked for me. When I tested it, the data said the same thing. It doesn’t work most of the time. Maybe it did many years ago, and maybe it does work in some specific situations, but based on what I saw, I would rate it in the E category.

On the other hand, I found the pullback of the breakout more reliable. The testing data from previous videos also says the same thing. I would put the breakout pullback entry in the C Category.

The next one is Bollinger Bands. This is one of those indicators that are very good, but it is difficult to use. Basically, the Bollinger Bands strategy that worked for me required me to take opposite trades when the price went outside the Bollinger Bands. This doesn’t sound that difficult, but when we actually try in the live market, we quickly realize that the price goes outside the bands a lot. You have to filter a lot of false setups to make this strategy work. So, even if this strategy worked for me, I would not recommend anyone using this as their first strategy. There are better indicators than this. I would put this in the E category.

But many years after I was done with Bollinger Bands, I realized that there is a new Bollinger Bands indicator called Percent B. Instead of appearing with the candles, this indicator shows up separately on the chart. It also has these upper and lower bands. When the price moves outside the normal Bollinger Bands, it can be confusing. On the other hand, Percent B shows the same thing by moving inside its upper and lower bands. I found this way better! I would rate this Bollinger Band indicator in the D category, just above the normal Bollinger Band.

The next one is the CCI indicator strategy. This just sucks. It got one of the worst win rates in my testing. I will put it in the F category next to Fractal.

Let’s see some Moving Average Strategies. The first one is the 9 EMA. I used this when I was trading on smaller timeframes, especially with momentum strategies. I used this to see where the very short-term trend was heading. For example, if the price moved up strongly and stayed above the 9 EMA for a while, I would wait for the price to move below the 9 EMA and stay there for a while. The price above the moving average would confirm a strong buying pressure, and the price below the moving average would confirm a pullback. When the price breaks above the 9 EMA again, I would look for a long entry. This strategy worked for me, especially when combined with candlestick entry patterns. I would put it in the C Tier.

Similar to 9 EMA, I used 21 EMA to see the medium-term trend or momentum. This was also a reliable indicator. I would put it next to the 9 EMA in the C Tier.

On the other hand, 200 EMA was just better than other moving averages. It not only showed the long-term trend, but I also found that it would act as a weak support resistance many times. I also used it to filter range and slow markets. When the price crossed the 200 EMA multiple times, I would see it as a potential range market because that’s how the price behaves in a range. I even made my own 200 EMA called TR EMA, which disappears in the range market. This moving average is one of my most used indicators. I would put it in the B Tier above all the indicators we have ranked so far. It’s that useful!

But what about Simple Moving Averages? I only talked about Exponential Moving Averages because I like how they react to the latest price movements more quickly. I mostly use EMA instead of SMA. If I had to rank SMA, I would put it just below EMA.

The next one is the ATR indicator. I highly recommend this indicator to beginner traders. This is one of those indicators that can be used with any strategy. I use it to see how far I have to set my stop-loss. For example, if I was taking a long trade near a support area. Normally, I would set the stop-loss just below the support. But this stop-loss could easily get triggered because of the market noise. So, to solve this problem, I can add the ATR value to my stop-loss distance. It’s like adding a market noise distance to the stop-loss. Now my stop-loss is far away, and the trade has a higher probability of winning. I would put ATR in the C Tier. I would have rated it higher, but once you gain enough experience, you can tell how far the stop-loss should be on your own.

The next one is the Keltner Channels Strategy. This indicator is similar to Bollinger Bands. But instead of taking reversal trades when the price goes outside the bands, you take trades in the direction of the breakout. Basically, this indicator says the price movement is slow when the price is inside the indicator. When the price breaks out of the indicator, the momentum in that breakout direction is higher. One can take trades when the breakout happens. I tested this strategy 100 times in the previous videos, and it did give a profitable win rate. Overall, this is as good as the indicators of the C Tier. So that’s where I would put it.

Now, let’s look at some price action pattern strategies. The first one is the Double Top and Double Bottom Strategy. This was a reliable strategy in my trading journey. I would put it in the C Tier.

The Head and Shoulders Pattern, is also similarly good. So goes in the C Tier as well!

But Flag Pattern, especially when the Flag looks like an Ascending or Descending Triangle, is one of the best price action pattern strategies I have used. I mainly used them on smaller timeframes to trade momentum. I would put it in the B Tier.

I would rank other Triangle and Price Action Patterns in the D Category.

Also, when it comes to the Trend Lines, I have only found them reliable when they are drawn on a pullback of a trend. Otherwise, they are pretty average. I would put the Pullback trend line in the C tier and other trend lines in the E tier.

Let’s see some Candlestick Pattern Strategies. The first one is the Engulfing Pattern. I would happily put it in the B Tier. It’s one of the best candlestick patterns I have found. If you remember the Trading Rush Free Price Action Series, you will know that hammer and shooting star patterns also show the same story. In other words, they are just like the Engulfing Pattern. I would put them in the B Tier as well.

As for the Doji candle, I would put it in the C Tier. It shows that there is equal buying and selling pressure.

I would put other Candlestick Patterns in the D category.

The next strategy on the list is the Awesome Oscillator. Unfortunately, it’s not that awesome. Its win rate in my testing series was slightly higher than break even. I would put it in the E category.

The next one is the Gap Strategy. This is when you look for a big gap-up or gap-down in the stock market. After that, one can take trades in the gap-open direction or in the gap-fill direction depending on where the price is showing signs of heading. I would add it to the B Category.

The next one is the V-WAP indicator. This is when you wait for the price to bounce from the V-WAP line in the Stock Market. This is one of my favorite indicators, and I would put it in the B Tier.

The next is the RSI indicator. I have found this to be an average indicator with an average win rate. The popular strategy of taking long and short trades when the RSI becomes oversold and overbought, respectively, did work in my testing. I would put RSI in the C Tier.

When it comes to Chart Types, I have found Renko Charts to be the best for drawing support resistance areas. They reduce the market noise and show the reversal points clearly. I would put them in the C Tier.

As for the Heikin Ashi Chart, they are also good at filtering out the market noise. Furthermore, one can even use them to trail the stop-loss. I would put them in the C Category.

As for the Candlestick Charts, these are simply the best. I would put them in the B Tier. They give a lot of information, which can be used to see the interest of other market participants! It is difficult to do that with Heikin Ashi or Renko Charts.

When it comes to Bar chart, I have never found it useful over other charts. I would put it in the E Tier.

Since Trend strategies are where I made the most money, and since trend trading is easier than range trading, I would put Trend Trading in B Tier and Range Trading in C Tier.

The next one on the list is Market Types. I would put Forex Market in the C Tier. This is where I started my trading journey. But this market has a lot of market noise in my experience. Support resistance areas work very well here. But only a few forex pairs are worth trading. The rest have a bad price movement.

I would put the Stock Market in the B Tier because I can trade a wide range of products very easily. The market noise in the Stock Market is less compared to the Forex market. So I can more reliably trade smaller timeframes.

On the other hand, I would put Crypto in the E Tier. Most of the time, it’s movement is trash. I can’t take technical trades when the price movement looks like this. It randomly starts making random moves and then suddenly starts making good, strong moves in one direction. Basically, crypto is volatile. But that’s also its advantage when it comes to long-term investing. For example, I have around two long positions in Crypto. Since Crypto makes big moves, the profit was made much faster than if I had invested that same amount into the stock market. Still, I only have a small portion of my capital in crypto as the risk of losing almost everything is also high. When it comes to normal trading, I don’t see an advantage in trading crypto over the stock market. So, I would still put Crypto in the E Tier.

The next one is the Donchian Channels Strategy. It’s one of the highest win-rate trend strategies I have found. You can learn more about it by clicking on this card. I would put it in the B category.

Similarly, the MACD crossover strategy is one of the best strategies I have found when it comes to identifying the end of pullbacks in a trend. Its Histogram part is also one of the best things out there! You can use it with any other strategy to see the momentum change. I go into much more detail in this video. I would put MACD and its Histogram in the B category.

Okay, so everything I’m going to say next will be very important.

If you noticed, I haven’t added anything in the A and S tiers yet. That’s for 2 reasons:

Number 1. The best trading strategy that I have found the most reliable in taking entries, booking profits, and setting stop-losses is the Horizontal Support Resistance strategy. I have data that says the way I draw support resistance works around 60% of the time. But that’s not the only reason I’m ranking it higher than anything else. You see, most of the strategies and tools I have mentioned so far are automatically calculated on the chart. In other words, MACD, Ichimoku Cloud, Bollinger Bands, Moving Averages, etc, all appear on the chart based on their predetermined formulas. Most of the time, there is less human psychology part in them.

On the other hand, when it comes to strong support resistance areas, the whole reason they work is because most people think in a similar way at the same time. Most people simply believe that if the price has strongly reversed from a price level before, the price has a good potential to do it again.

Horizontal Support Resistance Strategy is the only strategy I have found in my seven eight years of trading journey that is directly based on the psychology of market participants. On top of that, it is even supported by data! So, it’s the only strategy I would put in the A Tier.

Number 2. S Tier trading strategies don’t exist. But you can get to S Tier by gaining enough live market experience.

For example, when I was new to trading, I thought all trading indicators suck. If I had made this tier list before gaining 10 thousand hours of live trading experience, I would have rated every one of them in the F tier. I hated them all because they just didn’t work. But indicators were never the problem. It was beginner me.

At that time, I only had a few hundred hours of live trading experience. I was not experienced enough to filter good vs bad markets. I didn’t know when to use a trend trading strategy, such as MACD, and when to not use it.

Only when I gained enough live market experience I stopped trading like a bot. By that, I mean most trading strategies don’t work in all markets. We have to use trend strategies only in the trending market. Otherwise, we are trading mindlessly like a bot.

The only way to stop trading like a bot is by learning when to not trade. And I learned when to not trade after I gained more live trading experience.

Basically, what I’m trying to say is. Your trading strategy’s outcome in the live market kind of reflects how much experience you have in trading. If you are new and lack experience, your strategies will lack a high win rate as well.

Think of your experience as a multiplier of these strategies. The better you are, the better these strategies are.

If I was to start trading again, I would mainly focus on the S, A, and B Tier Strategies, Tools, etc. Because that’s what I have found to be the best after trading for seven-eight years straight!

That’s all! Now watch this video where I explain the best part of the MACD indicator with a cat!

More Day Traders should talk about this.

Post author By Trading Rush
Post date May 20, 2023

Tag: stock market

Today, I am going to create my own stock market simulation. Because I remember when I was new to trading, I saw a trading expert on a news channel. He was arguing that day trading should be banned. He compared trading to gambling and said that people who do day trading are basically gamblers.

This made me curious back then. Is day trading really just gambling? Was I wasting my time? In this video, I want to test his arguments. The guru said that there are 2 reasons why day trading is like gambling.

He explained the first thing by giving an example of two people: one is a fundamental analyst, and the other is a day trader. A fundamental analyst researches companies and makes decisions based on that information. They look at what the company does, what it will do in the future, how much money it makes, and what its previous earnings were.

On the other hand, a day trader puts their favourite indicator on the chart and uses that to make decisions. If there is a crossover on the chart, they make a trade. The trading expert on the news channel argued that this doesn’t make sense and is nothing more than gambling. He said that you couldn’t predict the direction of the market in short time frames as you can in longer time frames.

For example, if a company is doing well and making progress, its stock price will go up. If you do good fundamental analysis and think that the company will continue to do well based on its data (like if it’s releasing a new product that will be popular), then you can predict that its stock price will go up.

A company’s progress is a key factor in driving its stock price upwards. Through fundamental analysis, which relies on long-term information, there is a strong likelihood that the stock price will increase as the company performs well.

Many Day traders, on the other hand, don’t pay attention to this information. They don’t care about what the company does or how it’s doing. It’s like gambling in a casino, the news trading guru said. You place a bet, and if you’re lucky, you win. If not, you lose.

The second main reason why the guru said day trading was gambling was this:

There are many different types of people who participate in the stock market. Some trade in longer time frames, while others trade in shorter time frames. Some do swing trading, and some do day trading. Some people invest for a long time, while others exit their positions quickly. Some people use algorithms to trade, while others trade based on their emotions.

All these different types of people executing different trading techniques at the same time in the market create what’s called “market noise.” People who trade in longer time frames don’t pay attention to what’s happening in shorter time frames. They don’t care if the market is going up or down in the short term. They make their decisions based on their own time frame.

Investors also don’t pay much attention to technical analysis. If there is a technical pattern that suggests they should sell, they might not care if they are looking to buy for the longer term. This difference in thinking between technical traders and fundamental traders also creates market noise.

Market noise is also known as randomness. It is more visible in shorter time frames. This is what the trading expert on the news channel said was making day trading just like gambling. But is he right?

To test the trading expert’s ideas, I created my own stock market simulation. If he is right, then we should be able to create random noise in the stock market and see what it looks like. If the random noise looks like a good trend or a technical pattern in shorter time frames, then I’m afraid we can say that a technical trader might place trades based on those patterns. If that’s the case, then the trading expert might be right.

But let’s see what it looks like in reality. I wrote a code in Python to do this. The code has two parts: one part simulates different types of people executing different trading techniques on different timeframes at the same time in the market. Basically, creating randomness or market noise, and the other part shows it in different time frames, like stock market prices.

I simulated 1440 random noise candles to create an entire day’s worth of price movement. This means we can look at time frames from 1 minute to 1 day using this Python script. We want to see if we create noise in 1 day. Can we see a trend or pattern in shorter time frames?

So let’s run the code and see what happens. The charts have opened, and this is the chart for 1 day. The candles opened at 100, and the highest price was 132, while the lowest price was 87. It finally closed at 130. After opening, the price moved up and down before finally closing at the top. This is a bullish candle for 1 day. Remember that this is all randomness, just like the real market noise.

Now let’s see what this randomness looks like in a 4-hour time frame. We can see that the price went down, then up, then up again. Interestingly, this looks like a strong bullish move. But this is all just randomness.

In the 2-hour time frame, we can see that the price went up, then down, then up and down and up again. There isn’t a clear pattern yet. We can see a bullish engulfing candle being formed, and then the price went up. Some people might say that the bullish engulfing candle pattern worked because the price went up after it formed.

But since we know that this is just randomness, it doesn’t really mean anything. If someone had made a trade based on this pattern, they would have been gambling. But this is just a small example from the 2-hour time frame.

Let’s look at shorter time frames to see if we can find more patterns. In the 1-hour time frame, we can see that there are 3 candlestick patterns formed, similar to a buy entry signal we see in many candlestick guides. There is an engulfing pattern and something that looks like a doji. The price went down strongly, then slowed down, formed a doji, and then gave a bullish entry sign.

If you had made a trade after this bullish engulfing pattern and placed a stop loss under the entry candle, you could have made a good profit. But again, this is just randomness similar to the real market noise day traders encounter every day.

In the 30-minute time frame, we can see something that looks like an uptrend. It’s not a clear uptrend yet, but even in this price pattern, we can see an upward swing, a downward swing, a higher high, a higher low, and another higher high.

Things get even spicier when we switch to the 5 min timeframe because it actually looks like a normal chart. Some day traders might say that the uptrend is clear.

If we added indicators like RSI and MACD, someone might say that there is even an entry point. Someone might try to enter at the breakout of the trend.

But this is nothing compared to the 1-minute chart. If I had shown you this chart at the start of this video, I doubt any of us would have been able to tell that this was all randomly generated. I’ll zoom in a little so we can see better. Here, we can see something that looks like an uptrend pattern. The price went up and down without forming any clear patterns until it reached this point. From here, we can see higher highs and higher lows.

This part some might call ranging or choppy. If we go further to the right, we can see that another trend-like pattern is forming. It’s even clearer here.

Let me zoom in a bit on the chart. We can see that the price goes up and forms a higher high, then a lower high, and then another higher high. Near the previous higher high, another lower high is formed. This creates a support area according to price action.

And look, there’s an entry pattern. Here, we can see a candlestick pattern forming: a bullish engulfing pattern. Price action traders often make long trades based on this pattern.

So if we showed this chart to a price action trader without telling them that it was just random market noise, do you think they would make a trade based on this entry pattern? The price is making an uptrend and forming a trend pattern. On top of that, an engulfing pattern is formed near the previous support. I bet many day traders would because even I myself would.

If someone had entered a trade here, they would have made a good profit. If they had placed a stop loss here below the support, they would have made 3-4 times their initial investment.

If you said yes, that a price action trader would make a trade here if they weren’t told that it was just market noise, then was the trading expert on the news channel I saw many years ago actually right?

If market noise can look like a trend or an entry pattern in shorter time frames, does that mean that trading in shorter time frames is just gambling? Are traders who trade in shorter time frames, such as 1 minute, just gambling?

When I first started trading, I also traded in shorter time frames. I used price action strategies, but my profit graph was pretty much flat most of the time. When it went up, it wasn’t consistent like an uptrend.

I followed all the rules and managed my money well, but still, the progress was slow. Then after hearing about market noise, I decided to try trading on higher time frames, such as 30 minutes and above.

After switching to the 30-minute time frame, the exact same thing I was doing on the smaller timeframes worked more often. The market respected the price structures, such as support resistance, and my price action entries more. As a result, my profit graph started to move up better than before.

In my experience, what the trading expert said was mostly true. I say mostly because now, after gaining many years of live trading experience, I have also learned what works on smaller timeframes that are not gambling. If you remember, I even had multiple green days in a row and a very high win rate even after trading on the smaller timeframes. So, now, I want to show you some of my secrets or things that I learned that work in this gambling environment.

I’m not going against everything we agreed that the guru said was right. If you are day trading on smaller timeframes, market noise and another randomness will make you an accidental gambler. But there are just a few things that I myself use or do to have a high probability of making money even on the smaller timeframes. Here are some of them:

If you have used the Trading View chart before, you might find this chart familiar. Trading View separates time frames into minutes, hours, seconds and days. If I could, I would group these time frames in a different way. Let’s call these groups A, B, C and D.

Group A contains all timeframes below the 5 minutes.

Think of trading in shorter time frames, using a simple story about a skateboarder named Bill.

Imagine Bill standing at the top of a steep hill with a skateboard at his feet. He gives himself a push and starts rolling downhill. This downhill journey that Bill is on is like a long-term market trend in trading. In this case, Bill is heading downwards, just like how a stock price in a downtrend is heading downward over a longer period of time.

But the road Bill is on isn’t perfectly smooth. It has tiny bumps and cracks that cause Bill to vibrate up and down as he moves. This vibration is similar to ‘market noise’, the same randomness we saw earlier. Even though these smaller up-down movements are nothing, not even visible to a higher timeframe trader, they create their own up-and-down trends when zoomed in. If you use indicators such as MACD, RSI, and other things that give crossover entries, the probability of them working will be lower as these vibrations are just market noise of the long-term movement.

But let’s imagine there’s a big speed bump in the middle of the hill. Bill is moving fast and having fun, so he doesn’t stop. When he hits the speed bump, he and his skateboard fly into the air. This is interesting because even though the overall direction Bill was moving was down the hill, for a moment, he moved upwards. This little upward movement is like a short-term trend that goes against the bigger, long-term trend.

Why did this happen? Yes, it was obviously because of this little speed bump. But in our story, the speed bump is what day traders call a ‘catalyst’. A catalyst is something that causes a big change. In trading, a catalyst could be a piece of news or an event that causes the stock price to move strongly in a certain direction. So, when I’m trading in these smaller time frames, I look for these ‘speed bumps’ or catalysts. I like to trade when the price is moving strongly in a certain direction because of a catalyst. Because when this happens, the price moves from gambling and randomness to more towards high probability and edge. The market noise will still be present as there will still be different types of traders taking their own trades on different timeframes, but this catalyst makes the entry direction stronger. An entry taken in the catalyst direction will have a higher probability of working as long as the little bit of market noise doesn’t immediately trigger your stop-loss.

That brings me to another important point. As I just said, the catalyst trading method won’t work on every kind of market. For example, the Forex Market on timeframes lower than 5 minutes has a lot of noise compared to the stock market. So I prefer trading smaller timeframes of Group A in the Stock Market instead.

Now you might be wondering, how do we find the catalyst? Well, there are multiple methods. I made videos on it on the Main Channel. You can also watch them on the official Trading Rush website and app.

Another important thing to note is that in time frames below 5 minutes, sudden moves are more common, which results in indicator data becoming less reliable. If you use a crossover entry with RSI, MACD, etc., the indicator can give you a late or early entry. So on smaller timeframes of group A, I prefer using indicators only to analyze things such as trends and momentum. As for entry, I take them using other things that are not lagging, such as candlestick patterns.

The B group is for time frames from 5 minutes to below 30 minutes. Imagine that our little Bill has upgraded his skateboard with larger tires. Now when he rides down the hill, the vibrations of the road are felt less. Similarly, when you move to group B timeframes, the market noise is reduced. Don’t get me wrong. The timeframes are still relatively small and have a good amount of market noise, but that market noise is less compared to the even smaller timeframes we saw in Group A. Crossover Indicators can be used in this group in my experience. The timeframes are big enough that the price respects the support and resistance areas. Remember that I have data that shows my support resistance work around 60% of the time. So when I say support resistance work, I’m saying that the way I draw them works. I don’t draw trendline support resistance and those other weak areas. In my experience, they don’t work that well. You can learn more about them in my support resistance video.

The third group is for time frames between 30 minutes and 4 hours. Here, we can compare trading to driving a car instead of a skateboard. In this group, you can use any strategy you want. When I switched from trading in 1 minute to trading in 30 minutes, I saw a big difference in the price action strategy. In our metaphor, this would be like Bill moving from a skateboard to a small car. The small car is even less affected by bumps and cracks in the road, making the ride even smoother. Similarly, the market noise in these time frames is even less than in group B. The car’s suspension system can easily handle speed bumps without getting airborne, much like how the market’s ‘catalysts’ have a less sudden impact on these time frames. Here, the price action strategy also works well, and the price respects support and resistance better. The crossover entries are also more reliable. That’s not that surprising because most of the technical strategies, especially support resistance, work well when almost everyone can see them.

The D Category is for time frames above 4 hours and up to 1 week. This is like upgrading from a small car to a luxury sedan. The ride is incredibly smooth, and even the biggest speed bumps are barely noticeable. The noise and vibrations are practically non-existent, and the journey is comfortable and predictable. In trading terms, this means the market noise is so low that price action, patterns, and indicators can be used with a high degree of reliability. The higher timeframe smoothens out the smaller fluctuations and provides a clear view of the bigger picture. Many people, including investors, news and day traders, watch the 1-day time frame. Patterns are more important in this time frame. I’m not including the monthly timeframe in any group because that timeframe is too big for technical entry, in my experience. It’s so big and slow that multiple fundamental events can take place before the profit target and move the price against the technical entry direction. But I do pay attention to the support resistance of the monthly timeframe, like the price reaching near the previous all-time high. Those areas are talked about even on the news channel. And as I said earlier, if everyone is seeing and thinking the same thing, those areas will work well!

Alright, now I want you to play a game with me. I’m going to take on a different role and challenge my own points of view. One thing people might be wondering about is if this random noise we’re talking about really looks like actual market movement. Some of you might argue that it doesn’t quite look like the real thing. So let’s do a little experiment.

I went to TradingView and extracted 1-minute data of various currency pairs and stocks. With this data in hand, I moved to Python and fed this data into the simulation I built earlier. Now, the Python price simulation does something interesting. It creates a random market noise and also displays the real price movement data on a separate chart. This allows us to compare the randomly generated price movement and the real movement side by side.

Now tell me something, if I showed you charts side by side like this, would you be able to figure out which chart shows real market movement and which one shows randomly generated market movement? I’ll show you five charts in total. Let’s see how many you get right. Ready? Here’s the first chart. Is the top one the real price movement, or is the bottom one real? You have three seconds to decide. Time’s up! The top one is real. Now, what about the second chart? Is the top one real, or is the bottom one real? You guessed it; the top one is real again. Let’s look at the third chart now. Is the top one real or the bottom one real? The top one is real once more. Now, the fourth chart. Is the top one real, or is the bottom one real? Do you see a pattern here? The real one is the top one again. Can you spot any pattern in the real one? Which one is real? The top one or the bottom one? It’s the top one again. Finally, let’s look at the fifth chart. Is the top one real again? If you said yes, you’re correct.

But why did I put the real charts at the top every time? I’ll tell you, but first, I want you to take another test. This time, the top chart won’t always be the real one. It’ll be random. Let’s look at the first chart. Now the second chart. The third price movement. What about the fourth price movement? Now the fifth chart. What did you answer this time? If you picked the top one again, you’re wrong. If you picked the bottom one, you’re wrong too. All of these charts were randomly generated. There wasn’t a single real chart.

Now, why did I do that? I’ll explain, but let’s take one more test first. This time, the game will be fair. I won’t always put the real charts at the top, and the charts won’t be all randomly generated. Let’s see how you do in a fair game. We’ll look at the first, second, third, fourth, and fifth charts again. Did you spot any differences? Some of these charts were random, and some showed real price movements. How many did you get right?

The reason I set up the tests this way, the first with all real charts on top, the second with all fake charts, and the third as a fair game, was to make the following point. If there was a way to filter out market noise, or if there were experts who could tell real charts from fake ones, they would have figured out the second test was all fake. They would have known the first test had all real charts on top, and they would have gotten the right answers in the third, fair game. They would have answered almost all the questions correctly. Did you get them all right? Most people wouldn’t because it’s hard. I have spent thousands of hours on smaller timeframes in the live market, but I can’t always tell real from fake. The real and fake ones look very similar, right?

Of course, this is my opinion, based on my experiences. But now, having taken these tests, you’ll likely have formed your own views on the matter. I’m very much interested to hear what you think.

Tags best strategy, best timeframe, forex, gambling, is trading gambling, simulation, stock market, test, trading, trading guru

I analyzed 20 years of Stock Market and found this

Post author By Trading Rush
Post date August 23, 2022
2 Comments on I analyzed 20 years of Stock Market and found this

spx 100 percent win rate strategy

Tag: stock market

Did you know the stock market offers a 100% win rate strategy? And do you know why investors are more successful than day traders? I analyzed 20 yrs of the stock market and found this.

This is SPX.

From 1st Jan 2000 to 1 Jan 2022, there were 8036 days.

But the number of trading days in the same period was only 5537.

Out of 5537 1 Day candles, 73% closed above the 200-period exponential moving average, and 27% closed below it.

It means that 73% of the time, the price was in an uptrend in the last 22 years.

Wait, so if you just buy in this 70% uptrend market, then you should make some easy money, right?

If you had invested $100,000 in the stock market index on the very first trading day of the year 2000, you would have been down 10% at the end of the year.

If you had bought on March 24th of the same year, say goodbye to 50000 dollars, because you would have been down 50% on Oct 10th, 2002.

Forget profit, that’s around 3 years passed, and your account is already half.

Would you have kept that remaining $50,000 risk in the market when your account was 50% down?

Maybe you did. The price sure did move up, but it took around 8 years to reach your breakeven price.

In 8 years, you have not even made a single dime from investing.

Now that the price is at breakeven, would you have still kept the $100000 at risk in the stock market?

Because guess what, it’s 2008, and we are going down from here.

Remember the 50% drawdown of last time?

Forget that; you are making a 57% loss this time.

Are you still going to keep the money in the market when the market has already eaten more than half of your account?

Also, don’t forget that you haven’t even made a small profit in around 9 years.

After 10 years, you are still at a big loss.

Maybe you think the stock market is not for you.

But on March 8th, 2013, the price is again at your breakeven price.

It’s been around 14 years, you haven’t made any money, and you now have a chance to withdraw your $100,000. Would you do it?

Forget the year for a minute, and focus on the percentage gained and lost.

If these were your monthly percentage returns, and you were a day trader, would you have blamed the trading strategy?

I mean, surely a big loss on the account and 14 months of no profit is enough to switch the trading strategy, right?

But that’s exactly why most day traders don’t make money.

Even after multiple years of negative profit, an investor is very unlikely to switch his strategy because they buy with a long-term view in mind, as statistically, the stock market goes up in the long run. That’s almost a 100% probability.

But most day traders have a long-term view that is smaller than an ant.

They come with a get-rich-quick scheme mindset.

Even if you give them a just-above-breakeven strategy that has a 100% probability of making money in the long run, they will still switch the strategy when it makes a loss in the short term. Most investors will never do that.

The investors who held their position through that 14yrs of not making a profit, especially with compounding, made an excellent profit when the probability started doing its job.

So play the long-term game to be successful in the market!

That’s all!

Tags 100% win rate, 20, 20 years, best, day trading, stock, stock market, stocks, trading, trading strategies, years

INFLATION KING: How Rich Got Richer

Post author By Trading Rush
Post date July 11, 2022
1 Comment on INFLATION KING: How Rich Got Richer

inflation king 100

Tag: stock market

In 2020, the American central bank started printing money out of thin air. In around 1920, Germany did a similar thing.

Germany believed that it would be able to pay off its debt by winning the First World War and demanding war reparations from the defeated Allies in order to cover the expenses of the conflict. This plan failed since Germany lost the war and was left with unpayable debts.

So they started printing money out of thin air and without any backing in order to get out from under the burden of the debt. This did nothing but make the situation worse. Because of the increased supply of German currency, the value of the German currency fell significantly, resulting in inflation.

As a result, citizens in Germany saw a sharp increase in the cost of commodities, lost most of their bank savings, and were forced to spend more money on purchases. There are photos of people carrying money in a wheelbarrow.

By the end of 1923, the price of one loaf of bread had increased to 200 billion marks from its previous price of around 160 marks. People were quick to spend their money as soon as they received it so that they could make purchases before the value of their currency dropped any further. This increased rate of money being transacted for goods and services in the economy led prices to rise even further. The inflation quickly escalated into hyperinflation, and the German Currency became nearly worthless.

In all of this, there was a man named Hugo Stinnes, who played his cards right and ended up as the richest person in Germany after the hyperinflation.

Hugo Stinnes was born in 1870 into a wealthy German family that had interests in the coal mining sector. Later on, Hugo inherited the company, and he grew it by purchasing other mines and branching out into the shipping industry by purchasing cargo lines.

In the midst of the inflation period, Stinnes borrowed enormous sums of money in German Currency “Mark” in order to purchase more hard assets. When Germany experienced hyperinflation, Stinnes repaid his loans with almost worthless currency. But because his hard assets, such as coal and steel, maintained their value during the hyperinflation, he emerged as the richest man in Germany following the hyperinflation, earning himself the title of “Inflation King.”

In the year 2020, the United States Federal Reserve began the process of printing money in an effort to revive the country’s economy. And in 2021–2022, there was a sharp increase in inflation. While there isn’t complete agreement among economists on what caused the recent spike in inflation, there are a few different theories floating about, including supply shortages and strong consumer demand.

In the wake of the report from May 2022 that indicated an inflation rate of 8.6 percent, the chief economist at Moody’s Analytics, Mark Zandi, conducted an analysis of the components of the consumer price index.

He came to the conclusion that the 2022 invasion was the primary reason for the increased inflation, accounting for 3.5 percent of the 8.6 percent total. According to him, the price of oil and other commodities shot up both in anticipation of and as a response to the invasion, which led to an increase in the cost of fuel. As a result of these rising diesel prices, the cost of transporting consumer products, most notably food, increased.

As of writing this video, inflation is still rising. And one of the ways the government is trying to slow inflation down is by increasing the interest rates. When interest rates are higher, consumers spend less money overall, which slows economic growth and brings inflation down to more reasonable levels.

If interest rates were to rise, both consumers and companies would be more likely to reduce their spending. This will result in lower profits for the companies, as well as a decrease in the price of their stocks. If a significant number of the companies that are listed on the stock market have slower growth and lower profits, the price of the stock market index may fall or even crash. During this period, many people may find investing to be too risky, and many may choose to buy the price dips that high-interest rates will bring. However, this is not always the case in every sector. When interest rates rise, banks, mortgage, and insurance companies usually see an increase in their earnings because they are able to collect larger interest rates from their customers.

In the Forex Market, we see an opposite effect. Instead of dropping or crashing like the stock market, the country’s currency moves higher with higher interest rates. That’s because higher interest rates attract foreign investors, resulting in an increased demand for the country’s currency.

If the interest rate on the United States dollar is greater than the interest rate on the Japanese yen, then the demand for the Japanese yen will decrease and the demand for the United States dollar will increase. Because of this, the price of the USD-JPY pair will move up. That’s what happened recently.

Similarly, if EURO has a lower interest rate than the US dollar, we will see a drop in the price of the EURO-USD pair. And that’s exactly what happened recently. You won’t necessarily see these price behavior after the interest rates news because most things are already priced in. Most of the money is made by anticipating the upcoming events and not by reacting to them. So many times, when negative news comes out, you will see the price reacting to it positively for a short while as the profit booking begins. Similarly, when positive news comes out, the price will many times move down and react negatively as the profit booking begins.

Furthermore, since these price moves are caused by news events, you will see price easily breaking major support and resistance areas, and overall not respecting many technical indicators. That’s what happened recently.

USD-JPY, EUR-USD, and many other pairs easily broke multiple years of strong support and resistance areas with news events acting as a catalyst. Bitcoin-USD crashed, and the news people are saying pretty much the exact same thing they said after the first big crash back in 2018.

The interest rates rapidly started increasing and other major news events started happening after January 2022. This resulted in the stock market dropping around 25% from January’s high, which was also the all-time high.

As a Price Action and Technical Trader, before January, I made some good profit. I was trading for the upcoming stock market series and was already up around 60% in profit. But after January and especially in March and April, I rarely found good technical trading opportunities and had to close multiple trades at around breakeven. The price was opening with big gaps and easily breaking major support resistance areas. A similar thing happened in the Forex market during the same time period. The Trade Alerts I give on Patreon made an excellent profit of around 33 and 66% with 1 and 2% risk per trade, respectively, and had an excellent win rate of around 56% with a reward risk ratio ranging between 1.5 and 1. But when rapidly changing interest rates and other news events started to make strong fundamental moves in the currency market, the win rate of the technical strategies I use dropped and we gave some profit back to the market. After making 100% profit mostly in the normal or good market, I have made around 8% profit and lost around 8% in the current fear of recession market. The US inflation hit a 40-year high, and multiple countries also had decade-high inflation. Looks like there will be more interest rate hikes and more news moves in both the Stock and Forex Market.

As a Technical Trader, I have already switched to safer and higher win rate strategies and buying discounts. Whether I make a good profit in this high inflation, high-interest rates, and news market or not, I will let you know at the end of this year. So subscribe to see that! See how I take high probability trades and get early access to the Trading Rush Foundation and Stock Market Series, and see the strategies I used to make around 100% profit in a year, by supporting Trading Rush on Patreon. That’s all! Thanks for watching.

Tags documentary, forex, germany, inflation, inflation king, money, stock, stock market, stocks, strategy, trading, us

I Made A Trading Bot And Ran It For 24hrs Straight

Post author By Trading Rush
Post date August 24, 2021

Tag: stock market

Previously, Bill the bot took 200 trades in the direction of the trend in less than 2 hours and made almost 2000 dollars in profit. That’s almost a 2 percent gain in just 2 hours. If it can make money by taking random trades in the direction of the trend, what can it do with a high win rate trading indicator? What if I ran the Trading Bot for 24hrs with a strategy that got a high win rate after testing 100 times on the Trading Rush Channel?

So I ran Bill the Bot for 24 hours straight with the highest win rate trading strategy, and I can’t believe what happened at the end!

Bill the Bot took the first trade on USD CAD, and the trade immediately made a loss of 200 dollars, and then the trade was down by 400 dollars. Then Bill the Bot took a new trade on AUD USD, and it must be Bill’s Bad Luck again because the price decided to move in the opposite direction as soon as he entered the trade, and made an unrealized loss of around 500 dollars. But then Bill the Bot got overconfident and decided to take another trade on the USD CAD pair when the pair is already making a loss. There is a big problem with Bill the Bot!

You see I told Bill the Bot to risk around 1 percent per trade this time, and I also told him to look for MACD entry signals on 10 different pairs using the 5 mins timeframe, but since the market moves in a similar pattern, Bill the Bot encountered the first big problem. Similar market movements were generating similar entry signals! When Bill the Bot was not taking trades, it was not taking trades for a long time. But when it was taking trades, it was suddenly taking multiple trades in a short period of time which was a bad sign.

But when Bill the Bot decided to take another trade on the already losing pair, the broker rejected the order because of insufficient margin. Risking around 1 percent per trade was using almost 50 percent of the available margin. Suddenly the lack of margin was a good thing as it was stopping Bill the Bot from taking multiple similar trades at the same time. If Bill the Bot can make a significant amount of money in 24 hours, it will not only be better than 95 percent of traders, but it will also show us something really interesting at the end.

The second trade Bill the Bot took almost made a loss of 1000 dollars, but since the stop loss I told Bill the Bot to set was at a good distance away from the entry price, the price reversed just before triggering the stop loss. But then Bill’s bad luck caught up and got the price overexcited again because the price on the AUD pair started to make sudden big moves.

The trade Bill the Bot was holding for more than 2 and a half hours, unfortunately, was gone in a matter of few minutes because of a sudden big move. Not only that, but the strong sudden move made trade lose more than 1258 dollars, which is more than what we anticipated. Now Bill the Bot not only has to recover from this loss, but it also has to deal with sudden big moves for 24hrs straight. Let’s see if it makes money.

The first trade Bill the Bot took was still running even after 3 and half hours. Since there is no AUD in USD CAD, this trade didn’t make a loss, but then, Bill the Bot decided to take another trade on AUD pair, and this time there was a bigger problem.

When Bill the Bot took the trade on AUD JPY, the profit started with negative 500 dollars. This is bad because it means we are taking trades in the wrong time zone. There is a good time to trade and there is a bad time to trade. Since Bill the Bot is taking trades 24hrs straight, it has now entered the bad time zone where spreads are horrible and the price movement is bad. This means that stop losses will be triggered easily and the profit targets will not. By taking trades for 24hrs straight, Bill the Bot not only has to deal with this nonsense but also has to make money with a lower win rate in this time zone. If Bill the Bot doesn’t take many trades in these bad hours, the win rate will get better as the spreads will get lower, otherwise Bill the Bot has a big problem.

The price in these bad market hours stayed in the sideways direction for the most part, made a move towards the stop loss at one point, and then actually made a move in the entry direction. But unfortunately, the spread was so bad that when the trade triggered the profit target, it only made a profit of approximately 470 dollars, which is not even a half percent. But by the time the price on the very first trade decided to touch the profit target, the spread got better and the USD CAD trade actually made a profit of approximately 1000 dollars.

But then Bill the Bot took a trade on a USD pair that immediately started to make a big loss. It touched and crossed the 1000 loss limit by not 1, not 2, but 3 times, and at this point, I thought something was wrong with Bill because he was not closing the trade, but no! Bill was so confident in the MACD’s entry direction, that he decided to take another trade on the same pair, and it actually worked! But that’s not good enough! Bill the Bot made almost 2000 dollars by taking random trades in the last video, if the MACD strategy has to prove its 60 percent win rate, Bill the Bot has to make even more profit in the remaining 12hrs, even with the big spreads.

But then I noticed a bigger problem. After leaving Bill the Bot to Trade on his own, I didn’t look at the screen for more than 12hrs straight which was a big mistake, because when I came back, Bill the Bot took a short trade on the GBP JPY pair. Nothing looks wrong at first. The price made a good move in the entry direction and touched the profit target, but for some reason, the trade only made a profit of 900 instead of 1000 dollars. Something was wrong!

So I did some digging to find out where the 100 dollars were disappearing and realized that Bill the Bot successfully told the broker to take a short trade at 150.916, and set the profit and loss targets at an equal distance away from entry price, which in this case was 1000 dollars profit loss away, but for some reason, the broker decided to take the trade at 150.897, which turned 1000 dollars profit loss into 890 dollars profit and 1100 dollars loss respectively. This should not have happened!

Bill the Bot was looking at the last ask price while taking 200 random long trades in the previous video, but when I wrote the new code for this experiment, by new code I mean, copy the code from the previous video, right-click and paste, I forgot to tell Bill the Bot to look for the last bid price instead of the Ask price while taking the short trades. So now Bill the Bot not only has to survive the bigger spreads in bad markets, but also has to make a significant amount of profit in 24hrs, while making 1000 dollars in a long trade, but only making 900 dollars in a short trade.

Luckily the next trade was a Long trade on USD pair, but unfortunately Bill the Bot took Short trade on a similar USD pair, and on top of that, the trade that made the loss was the long trade, resulting in a loss of thousand dollars, but only a profit of 800 dollars.

It must be Bill’s Bad luck because the next trade was also a short trade, but this time Bill also took a long trade on USD CAD. The Short trade only made a profit of around 900, but this time the Long Trade made a good profit of 1004 dollars. This is when Bill the Bot entered the best time to trade zone where the spreads were lower and the price movement was good. Unfortunately Bill the Bot took a short trade on AUD JPY and only made a profit of 900 instead of 1000. But then something interesting happens, Bill the Bot took a long trade on the USD CAD pair and the trade quickly makes a loss, then a few minutes later, it takes another trade on the same pair in the same direction, and actually makes 1000 dollars in profit.

This was one of the short trade Bill the Bot took where the price was moving in the downward direction. Bill knows the price is in a downtrend by looking at the 200 period moving average. The trading bot took a short entry at this candle when the MACD gave a short crossover above the zero line. Bill decided to set the stop loss at a good distance away from the entry price, which in this case was above the 200 period moving average resistance. If the price decides to move towards the stop loss, it will have a difficult time crossing this moving average resistance, which is good!

But not all trades were good. This is a trade I would not have taken in the live markets. Bill the Bot took this trade because of the MACD signal, but this setup is actually not worth trading, because the price was choppy, then lost momentum, and is starting to move in the sideways direction.

Then Bill the Bot found one of the best trading setups, where the price was in a good downtrend and near a breakout resistance, and this trade actually made a good profit!

I downloaded the transactions of the last 24 hours and opened it using Excel, and looks like Bill the Bot lost money at the beginning, then made a small profit by winning trade in the bad market where the spreads were bigger, then recovered the loss, then the balance graph made a good move in the upward direction, and kept going in the upward direction for few hours before making a good amount of loss, but then made an excellent profit.

By taking trades for 24 hours straight with the highest win rate trading strategy we have ever tested on the Trading Rush Channel, Bill the Bot was able to make more than 5000 dollars in profit. That’s more than a 5 percent gain in just 24 hours. If it can make 5 percent in 24 hours, what will happen if I ran the bot for an entire week with the highest win rate trading strategy we saw on the Trading Rush Channel? Let’s find out in the next episode! That’s all! Get to see how I get a high win rate with the current best strategies I use by supporting Trading Rush on Patreon. Thanks for watching!

I Built A Trading Bot And It Actually Made $1000 In 2hrs!

Post author By Trading Rush
Post date August 12, 2021

tradingbot 30 best 4

Tag: stock market

I made a Trading Bot and told it to take 100 Trades, and just to help him a little, I showed him the direction of the trend. If this trading bot can make money simply by taking 100 Trades in the direction of the trend, I think we all can agree that Bill the Trading Bot will be better than 90 percent of traders. But that’s kind of scary because robots are not only taking over people’s jobs but can also trade better than 90 percent of traders.

The first thing we need to do is find the brokers that will let you take trades using a bot. So after some googling, I found one, and…

We need to learn a new language. And two weeks later, I wrote some code and it somehow worked! Okay Bill the Bot, take over my job.

But how are you going to make the bot trade successfully you ask? Well, the secret ingredient is not a high win rate trading strategy, not even the MACD strategy that got a 60 percent win rate, no-no-no. All we are going to use is the holy grail of trading! Money Management! But can it really make money with just money management? Don’t you need at least a strategy for entry signals? That’s a good question, but Bill the trading bot already has two things better than a human. It does not think with emotions, and it can actually follow a written trading plan!

But first, we will need a baseline. If Bill the Bot actually makes money after 100 trades, how do we know it was actually better than average? First, we will tell Bill the Bot to take 100 random trades in total on 10 different charts. I created a demo account for this experiment where the commission was included in the spread, and the entry timeframe was set to 1 minute. Since the spread on the smaller timeframe is sometimes too big, I waited and told Bill the Bot to only take trades during the New York and London session, where the spreads are lower and the price movement is good. When we will take 100 random trades, we are expecting the Bill the Bot to end up with a small loss at the end.

In the first experiment, Bill the Bot took 10 trades in total on different pairs every 5 minutes. Bill the Bot first looks at the last traded price, then sets the stop loss and profit targets at a good distance away from the entry price. You can see where it decided to set the profit and stop loss on the left side. On the right, you will see if the trade is making a profit or not, and the position size. Here you will see if the account balance is going up or down, and the available margin. I actually ran this experiment before, but the trading bot ran out of margin because the position size was too big. So I told Bill the Bot to reduce the position size per trade, and it looks like he is successfully taking 10 trades at a time.

The account was up by 100 dollars at one point, but when Bill the Bot took 100 trades in around 50 minutes, there was a small loss even after commission just like expected.

I downloaded the transactions and opened it using Excel, and Balance Graph was looking really flat. You can see that the price made a move in the downward direction at the start, then made a move in the upward direction, made a profit, and then slowly made a move in the downward direction, and made a loss of approximately 26 dollars.

This will be our baseline.

If Bill the Bot can make more money than this by trading in the direction of the trend, it will be better than 90 percent of the traders. But then I noticed that multiple pairs have the common currency on the same side. There is USD on the right side, and there is USD again 3 times on the same side. If the price on USD falls, the four pairs can move in a similar pattern.

In the second experiment, Bill the Bot will take 10 trades on 10 pairs every 5 minutes, but this time, it will take opposite trades on these similar pairs to see what happens. Since last time a lot of margin was left unused, I told Bill the Bot to increase the position a little. First, it took a trade on Euro USD, then on GBP JPY, and then on GBP USD, and then it lost money. It took 100 trades in the second experiment and only made a small loss just like before.

I opened the transactions using Excel and looks like the price made a move in the downward direction at the beginning, but then went in the sideways direction.

Since the loss after 100 random trades was around 700 dollars, can Bill the Bot trade in the direction of the trend, and make significantly more profit than what it lost in the third experiment? I found the GBP JPY chart that was up trending on multiple timeframes. So I told our little Bill to take long trades on this pair every 1 minute.

Without a proper trading strategy, Bill the trading bot doesn’t have much luck in getting a high win rate.

Bill is pretty much taking random trades, and the only things in his favor are the trend direction and money management. If you take random trades, you will most likely get a win rate of around 50 percent. But since there are charges for taking trades, you will make a small loss at the end. In this case, the commission is included in the spread. So as long as Bill the Trading Bot makes money just above 50 percent of the time, it will not lose money, something that many traders struggle to do.

When it will take trades every minute in the direction of the trend, more trades will end up in profit, because the price has a higher probability of moving in the direction of the trend.

But Bill can’t be silly and risk more money per trade because if the price makes a sudden move in the downward direction in this uptrend, Bill the Bot will lose a lot of money.

So instead, we are going to make Bill do the smart thing. We are going to make the bot risk less than 1 percent of the account per trade. So when it will take multiple trades at the same time, it will be similar to averaging but in the direction of the trend.

But now, if you noticed, the trading bot is not using a lot of margin even though it is taking multiple trades at the same time. So I told him to use that extra margin to take trades on other pairs.

Now, the Bill the Trading Bot is taking 2 long trades every 1 minute. One on the GBP JPY pair, and one on the Euro USD pair. Both of these pairs are trending in the same direction in the long run. I adjusted the profit loss distance for the Euro USD pair and let Bill the Bot take 100 trades on its own. Now that we are taking 2 trades at the same time, we are actually taking 200 trades in total. Let’s see how Bill the Bot takes around 200 trades on its own.

It must be Bill’s bad luck or that beautiful face that got the price overexcited, but the price made a sudden big move in one direction.

This move is probably caused by some news. On the Euro USD pair, the price made a strong sudden move in the downward direction, which means the stop losses are going to get hit. On the other hand, the price on the GBP JPY started to make sudden strong moves in the upward direction.

Now you might think, if the price is suddenly going towards the stop loss on one pair, and towards the profit target on the second pair, one should make a loss and the other one should make a profit right?

No!

The price not only made a loss on the first pair, but it also reversed just before triggering the profit targets on the second pair and made a loss. Because of this news event, the account was down more than 1000 dollars.

Now Bill the Bot not only has to recover this loss with its just above 50 percent win rate but also has to make a profit. With 2 trades every minute, it should take Bill the Bot around 1 and half hours to take 200 trades. So if Bill the Bot can make more than 1 percent in just 1 and half hours, it will be a big deal, because then we can run it for 24hrs straight with a good strategy to see by how much percentage it can grow the account in a day.

As the price began to make moves in the upward direction on both pairs as expected, more and more profit targets were hit. The loss we made because of the news was around the 14th trade, but by the 39th trade, the Trading Bot already recovered the loss and was sitting with a small profit.

Furthermore, it is still not using most of the available margin, which means we can tell Bill the Bot to increase the profit per trade whenever we want.

This time when I opened the transactions in an Excel Sheet, the price was going in an upward direction. We told the Bot to trade in the direction of the trend, and the balance was actually moving in the upward direction. This was the balance graph of the first experiment when we took random trades, this was the balance graph when we flipped some of those random trades, and this, is the balance graph when we told the trading bot to take random trades, but in the direction of the trend! The bot lost money at the beginning because of the news, but since Bill the Bot actually followed the written trading plan with proper money management, it recovered the loss and made a profit, then lost money again, then recovered that loss, and made an excellent profit at the end!

Bill the bot took 200 trades in the direction of the trend in less than 2 hours and made almost 2000 dollars in profit. That’s almost a 2 percent gain in just 2 hours. If it can make money by taking random trades in the direction of the trend, what can it do with a high win rate trading indicator? What if I ran the Trading Bot for 24hrs with a strategy that got a high win rate after testing 100 times on the Trading Rush Channel? Let’s find out in the next episode! That’s all! Support Trading Rush on Patreon and Get to see how I get a high win rate with the current best strategies I use. Thanks for watching!

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I made a Trading Indicator that DISAPPEARS in the Choppy Market – Trading Rush Choppy Market Indicator

Post author By Trading Rush
Post date July 15, 2021
1 Comment on I made a Trading Indicator that DISAPPEARS in the Choppy Market – Trading Rush Choppy Market Indicator

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Tag: stock market

(FREE) Trading Rush Choppy Market : https://www.patreon.com/posts/trading-rush-52806962

I made a Trading Indicator that disappears in the choppy markets, so you don’t have to lose money in them. We are also going to take more than 100 trades with this disappearing indicator to see if it actually increases the win rate of a trading strategy. First, we created the Beep Boop indicator in the AI trades video, and it was surprisingly good! Then we created the Trading Rush Moving Average that disappears in the range market, and now, introducing the Trading Rush Choppy Market, which disappears in the choppy market, and even shows the strength of the good market.

If you have watched chapter 14 in the Trading Rush Price Action Course, you probably remember the simple but effective technique that you can use to filter the choppy markets. The Trading Rush Choppy Market indicator improves that technique even further.

The TR Choppy Market has three main components. When the price movement is good, the Trading Rush Choppy Market will indicate it with light green bars. When the price movement is extremely good, the Trading Rush Choppy Market will indicate it with dark green bars. However, if the price movement is choppy, the green bars will simply disappear.

But then there is this line that looks like a moving average because it is and it is showing the average strength of the good price movement. For example, when the price movement is good, and multiple green bars are formed in the Trading Rush Choppy Market Indicator, the average line will move in the upward direction. But when the price is choppy and not worth trading, the green bars will not only disappear, but the average line will start falling towards the zero line.

The TR Choppy Market Indicator ranges from zero to a hundred, and the higher the average line is, the better the price movement is. As you can see here, when the price movement is good and not choppy, the average line is staying above 20. And when the price gets choppy, the average line falls towards the zero line, and stays below 20 for the most part.

This is the first version of the Trading Rush Choppy Market Indicator, and while testing I have found that 20 is the starting level that differentiates the good vs bad market, and the higher you go, the more choppy market you are going to filter. By default, the Trading Rush Choppy Market will come with a horizontal line that you can adjust. If you noticed that on a particular chart 50 is the level that differentiates the good vs bad market, you can simply move the horizontal line to 50, and with that, you will also adjust the size of the green bars.

But now, let’s put the Trading Rush Choppy Market Indicator to the real test, to see if it actually filters the choppy markets.

But, we need a trading strategy that gives many entry signals in a short amount of time, and a market that is choppy and trending, so we can see if the win rate increases with the Trading Rush Choppy Market indicator.

For the indicator, we simply come to the Trading Rush website, look at the TR Scores of many different strategies that we tested 100 Times, and then select the indicator that gave a bad win rate.

Let’s use the CCI indicator that only got a TR Score of 3.5 in the win rate category, and I found AUD JPY, which is trending and is choppy on the 5 mins timeframe.

To see if the win rate goes up with the Trading Rush Choppy Market, I took more than 400 trades in total with different settings.

When I took 100 trades with the CCI indicator without the TR Choppy Market filter, it got a 29 percent win rate with a 1.5 to 1 reward risk ratio. The win rate is so low because the CCI has a bad win rate in the first place, and on top of that, we are testing it in the choppy market. But when I tested it again with the Trading Rush Choppy Market filter, with the 20 level to differentiate clean vs choppy market, it increased the win rate by 3 percent on the same market structure. And with the 30 level, the win rate was 4 percent higher. And when the 40 level was used to differentiate good vs bad market, the win rate was 12 percent higher, but I ran out of data and was only able to take around 80 trades. Adding around 20 more trades shouldn’t make a big difference to the win rate, because others had pretty similar win rates at the 78th mark as they did at 100.

In other words, the win rate significantly improved with Trading Rush Choppy Market Indicator, and it got better with higher filtering levels.

If we compare charts side by side, you can see that on this chart, the price got choppy in an uptrend. The CCI indicator on its own gave 8 false entry signals. But with the Trading Rush Choppy Market filter, 6 out of 8 signals disappeared. Here, CCI on its own gave 8 signals in the choppy market, but with the TR Choppy Market filter, only 2 remained. On this chart, the CCI indicator gave 10 bad signals, but with the Trading Rush Choppy Market Indicator, 60 percent of the bad trades were filtered.

Does this mean the third Trading Rush indicator we created is successfully filtering the choppy and bad markets? According to the data, it definitely is, and you can try it yourself because it is absolutely FREE just like all the indicators we have created so far! I will share the source code in a public Patreon Post with the installation steps! LINK is in the description! Also, support Trading Rush on Patreon and get to see In-Depth Trade Analysis and Trade Opportunity Signals. Thanks for watching!

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How To Make Money with TRIX Trading Strategy (Without Many False Signals)

Post author By Trading Rush
Post date May 9, 2021
2 Comments on How To Make Money with TRIX Trading Strategy (Without Many False Signals)

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Tag: stock market

Do you want to trade with a strategy that gives fewer false signals? This is the TRIX indicator, and in this video I’m going to show you how you can make money with the TRIX Trading Strategy without getting a lot of false signals. Since we are going to test this strategy 100 times in the next video, comment on what you think will be the win rate of this strategy. This is how the TRIX indicator looks like. It will come with just one line that oscillates around its zero line, and by default, it will come with a length of 18. When the TRIX value is above its zero line, it indicates an increasing momentum, and when the TRIX value is below its zero line, it indicates a decreasing momentum. If we plot the CMO and TRIX indicator at the same time, you will notice that at first glance, the TRIX indicator looks similar to the CMO indicator that we tested 100 times, but the TRIX indicator looks a lot better and smoother. When the CMO and other similar indicators give multiple false signals in a short time period, the TRIX indicator filters and reduce the noise. All of this leads to less false signals in a row and consistent profits in the long run.

Here’s how the TRIX trading strategy goes.

Take a long position when the TRIX line crosses above the zero line. And take a short position when the TRIX line crosses below the zero line.

To improve the TRIX Trading Strategy a bit further, we will use the 200 period EMA.

So here’s how the complete TRIX Trading Strategy goes.

Buy when the TRIX line crosses above its zero line, only if the entry candle is above the 200 period moving average. The stoploss goes below the pullback.

And sell when the TRIX line crosses below its zero line, only if the entry candle is below the 200 period moving average. The stoploss goes above the pullback of the trend.

Here’s an example. As you can see, when the price was in an uptrend, the TRIX indicator was staying above its zero line. We don’t know how long the uptrend is going to last, and we don’t want to buy at the top of the trend. So we wait for the TRIX to show a decreasing momentum in this uptrend, and when the downward momentum stops and the upward momentum begins, in other words, when the TRIX indicator crosses above the zero line, we will take a long position.

Here, the TRIX indicator was staying below the zero line in the downtrend. Since we don’t want to sell at the bottom of the trend, we wait for the TRIX value to show an upward momentum, and when the TRIX line crosses below the zero line in this downtrend, we will take a short position, with a stoploss above the pullback.

To find the win rate of the TRIX Trading Strategy, we will test it 100 times in the next video. Subscribe to see that.

This Tweak Got 8% MORE Win Rate with this Trading Strategy

Post author By Trading Rush
Post date May 8, 2021
2 Comments on This Tweak Got 82 MORE Win Rate with this Trading Strategy

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Tag: stock market

A couple of hours ago, I showed you a momentum Trading Strategy and said that I will test the CMO Trading Strategy 100 times, to find its win rate and to see how it compares with other strategies we have tested so far. But that’s not what I initially tested. In this video, I will take 200 Trades, and will show you how one simple change, increased the win rate of a Trading Strategy. Before creating the CMO strategy video, I took 100 trades with another CMO trading strategy that was different from the one mentioned in that video.

You see, the CMO indicator also has overbought and oversold zones like many other oscillators. CMO value below the negative 50 is considered as oversold, and the CMO value above positive 50 is considered as overbought. And if you have been trading even for a little while, you can tell that if there are overbought and oversold zones, many traders will like to trade when the price reaches or comes out of these zones. That CMO strategy was no different. You buy when the CMO line breaks above the oversold level, which in this is below negative 50. And sell when the CMO line breaks below the overbought level, which is positive 50. In the first attempt, when I took 100 trades with this Overbought Oversold strategy, it only had a 43 percent approximate win rate. 43 percent is not bad because of the 1.5 to 1 reward risk ratio, and this strategy made money in the Trading Rush App. But when I took another 100 trades, but this time by changing one simple thing, it got a 51 percent approximate win rate with a 1.5 to 1 reward risk ratio. 43 to 51 is a huge improvement when it comes to trading strategies. Here’s what I changed. Instead of using the indicator as an oversold and overbought indicator, I used it to find the momentum change using its zero line. I have explained this strategy in the previous CMO video, check it out to learn more.

But why did the CMO indicator performed better with this one simple change? If we look at the Trading Rush App, we will see that the oversold overbought strategy, made a profit of 750 after 100 trades, and on the other hand, the zero line strategy made a profit of 2750. But if we look at the profit graph, you will notice the difference. The zero line strategy gives more signals in a short amount of time, but since this is a momentum oscillator, in a good trend, the zero line strategy gave more signals that were won. On the other hand, the oversold overbought strategy didn’t give many signals in the good trends, because for the price to be oversold or overbought, the price has to make a good move in that direction.

For example, these are two downtrend charts. As you can see on the left, the Oversold Overbought strategy only gave one entry signal. But on the right, the zero line strategy gave 6 signals in the same trend. The price has a higher probability of moving in the direction of the trend. Even though 3 trades were lost and three trades were won, because of the 1.5 to 1 reward risk ratio, in total we made money with the zero line strategy in this downtrend.

And because of trades like these, the zero line strategy didn’t make a loss like the loss we see in the profit graph of the overbought oversold strategy. If few trades were lost in the bad market, some trades made money in the same market. The zero-line strategy was okay in the sideways and slow market, and was excellent in the trending markets compared to the overbought oversold strategy.

4.5+7.5+4+4+4.5

If we come to the Trading Rush Website, you will see that the first oversold overbought strategy gets a TR Score of 24.5 out of 50, and ranks 20th from the top, just above the Williams Percent Range trading strategy.

6+7.5+4+4.5+4.2

And the Zero line strategy that got a better win rate, gets a TR Score of 26.2 out of 50, and ranks 19th from the top, below the RSI with Super Trend trading strategy. That’s all!

The Ultimate Guide To CMO Trading Strategy

Post author By Trading Rush
Post date May 7, 2021
5 Comments on The Ultimate Guide To CMO Trading Strategy

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