Hey now. I bring you yet another profitable trading system that i call "Scalping
the Hidden V". So just sit back relax and smash
that subscribe button like it just stole your mama's purse. Right now!
The Hidden V uses 2 indicators. The 1st indicator is the Multi TimeFrame Exponential Moving Average
by Juraj. I am going to set this indicator to the length of 200, the resolution to 1 hour,
and color it in white. This indicator will provide higher time frame trend direction.
The second indicator is the volume weighted average price or VWAP, which is a built-in
TradingView study. This indicator will provide our trigger and makes the "V"of the Hidden V.
The final indicator is the relative strength index or RSI. I removed the
bands and colored it in yellow. We will use the RSI to identify trend continuation by providing
hidden divergence. Which is the first part of the Hidden V. So let's get to the charts.
This chart is Bitcoin versus the US Dollar five minute candles. On this test the rules for a
long entry are. Price is above the multi-time frame EMA. Second price closes above the VWAP,
then goes and closes below the VWAO. The pullback into the VWAP creates RSI
bullish hidden divergence. Meaning there is a higher lower price and a lower low on the RSI.
Enter on the next close above the VWAP. All of that happens on this candle here.
That is our trigger candle. We place our stop at the previous swing low and target
1:1 for 1/2 our position. When 1:1 is hit we move the other 1/2 of our position to breakeven
and exit when a candle closes while touching the VWAP. And this one hits a 1.69 risk to reward.
We have one more long example. Price above the MTF EMA. Price closes above the VWAP, then goes
and closes below the VWAP. The pullback into the WAP creates RSI bullish hidden divergence.
Enter on the next close above the VWAP. All of this happens on this candle here. That is our
trigger candle. We place our stop at the previous swing low and target 1:1 for 1/2 our position.
When 1:1 is hit we move the other 1/2 of our position to breakeven
and exit the trade on the next close below the VWAP. And this one hits a
6.38 risks a reward on the second half of the position. And now we flip to shorts.
This is what i will test for shorts. Price below the multi-time frame EMA. Price closes above and
then closes below the VWAP. The pullback into the VWAP creates RSI bearish hidden divergence.
Meaning we have a lower high on price and a higher high on the RSI.
Enter on the first close below the VWAP. We target 1:1for the first 1/2 of our position.
When target one is hit we move our stop to breakeven.
So we exit this trade when we get a close above the VWAP, which happened here. And this one got
a risk to reward of 1.58. Stick around to the end of the video where i give my thoughts on
making the strategy better and give it a Trader's Landing score. And now it's time to do what i do.
Remember this is just 100 tests on 2 instruments. If you're thinking of using
this system please do all the required testing and be sure to let us know what you discover.
Now let's review the test data and go over a couple of ideas on how to optimize
this system. So "Scalping the Hidden V" was tested on Bitcoin versus the US Dollar
and Ethereum versus the US Dollar. It took about 11 months to find the 100 trades.
There were 73 that hit target 1, 44 that hit target 2, and 27 stopped out. Most wins
in a row was 10, most losses in a row was 5. Gain on account risking 1% per trade was 69%.
You can see the equity curve on here starts out basically straight up,
followed by an extended period of profits, a little draw down, and then up again.
I give "Scalping the Hidden V" a Trader's Landing score of 6.
While it performed well over this very small period of time, hidden divergence is somewhat
subjective and there are some issues with the strategy that need to be improved upon.
How do we find the crumbs and make this system better? The problem with using the VWAP to exit
the trade is that it resets at the daily broker close. You can see here that every time it is
8 p.m in the New York time zone on this exchange the VWAP resets. So no matter what is happening on
the chart you exit here. You may want to try using something like a cross of the SSL to exit. I did a
video on this specific strategy here. However i do like using the VWAP to identify entries at a place
of monetary worth for the current session. But an EMA based on the current time frame
may bring additional clarity to trend direction and may offer some additional confirmation.
Check out this playlist for more profitable systems. And have a great day, if you want to you.