I tested a trading strategy 100 times and recorded all of the results.
I will also be showing you the exact indicators this strategy uses, the entry rules, and share
with you how this strategy did trading 100 times on real market data.
Let s get into it shall we?
For the charting platform we will be using TradingView, I ll leave a link in the description.
Once you get on tradingview go to the indicators tab.
This strategy requires four indicators.
The first indicator we will be adding is RSI or the relative strength index.
The second indicator is going to be BJ SuperScript, this one right here.
The third indicator is going to be a chandelier Exit.
The fourth and final indicator is going to be an exponential moving average.
Now that we have the four indicators, we re going to need to change the settings a bit.
Let s change the settings for chandelier exit first.
Make sure you re on the style tab and uncheck all these boxes besides the buy and sell labels.
I m going to change the position of the labels as well so we can see them better.
Set the buy label to below, and the sell label to above.
Next, go to the inputs tab and change the ATR period from 22 to 1.
Then change the ATR multiplier from 3 to 2.3.
Next, lets change the settings to this BJ SuperScript indicator.
Go to the style tab and uncheck every single box.
Yes, every.
Single.
box.
Then go to the inputs tab, scroll all the way down to here, and change this value from
5 to 6.
Then as a personal preference I m going to raise the opacity a bit to our lines, so we
can see them just a little bit better.
Then most importantly, let s change the settings to our RSI indicator.
Go to the Style tab, First I m going to change the color of the RSI line so we can see it
just a little bit better.
Then uncheck all 5 of these lower boxes down here.
Next, go to the inputs tab and change the RSI length from 14 to 25.
Then scroll down a bit and make sure this MA type is set to SMA.
and change this MA length from 14 to 150.
Then finally go to the settings of your ema, and change the length to 200.
I m also going to change the color of mine to orange.
And just like that we have our settings optimized So now that we have all of our top peak settings
for these indicators, let s go into the rules of when to enter a trade.
First, I want to address this question I get asked all the time in my comments and in my
discord.
How do you backtest trading strategies or make trading bots?
Well usually, you would need some type of coding knowledge to do this, but I found this
really cool website called capitalise, where you can create or automate trading strategies
just by typing them out in plain English.
So what I mean by this is where normally you would need to type in long lines of codes
like this, which can be insanely time consuming and you need coding knowledge to do this,
where with this website you can just simply type it in.
For example, if You want to enter APPL on the 1 hour timeframe when the rsi crosses
above 80, and you want to buy $1,000 worth.
You just simply type it out in plain English, and it ll execute.
Pretty cool, thought I d share it with you guys.
I ll leave a link in the description if you want to check it out and it s absolutely free,
so, why not?
Back to the strategy.
The rules are simple.
First you need a buy signal from the chandelier indicator.
Like this.
Next, this superscript indicator must be colored in blue.
The RSI line (the blue line) must be crossing above the moving average (the yellow line).
Then finally price must be above the 200 exponential moving average.
This will ensure we are only trading in a market that is in an uptrend.
If all these rules are met, we enter a trade.
So we would enter right here.
Set your stop loss at the recent swing low.
Now for this next part, listen VERY CAREFULLY.
This is unlike any other strategy I ve showcased, but I felt we should get a little bit more
advanced since this a full length video and not just a one minute short.
It involves our risk management and our take profit system.
We are going to have 4 take profit targets.
Yes, FOUR.
At each of the take profit targets, you are going to sell a of your original position
size.
The profit targets will be set at 1:1, 1.5:1, 2:1, and 3:1 risk to reward ratio.
So for example.
If our position size is $1,000 to start with.
Our first profit target is going to be set to 1:1, so if price reaches that point we
will sell $250 worth of our shares.
Then raise our take profit to a 1.5:1 risk to reward ratio, wait for price to reach that
target, sell another $250 worth of shares, and so on.
How about we do a live example.
So first we make sure the rules are met.
We have a buy symbol, the superscript line is colored in blue, and the rsi line is going
above the moving average.
Also, we make sure the price is above the 200 ema.
We enter a trade.
We set our stop loss at the recent swing low and set our take profit mark at a 1:1 profit
ratio.
We then wait to see what price does.
Price reaches our first target, so we sell 25% of our shares.
We then raise the target to a 1.5:1 profit ratio.
We wait, then price ends up reaching the target yet again.
So, we sell another 25% of our shares.
So by now, we have sold half of our shares.
We then raise our take profit to a 2:1 risk to reward ratio.
And see what price does.
It hits our take profit yet again, so we sell another 25% of our shares and you guessed
it, raise our take profit target.
We raise our final take profit to a 3:1 risk to reward ratio.
Price hits our final take profit, we sell the rest of our shares and make a clean and
easy 6%.
Let me show you one more example of a trade that may not perfectly.
So we make sure all of our entry rules are met.
We have buy symbol, a blue super script line, rsi is above the moving average, and price
is above the 200 ema.
We enter, and set our stop loss and take profit.
If you wanted to a short trade.
The opposite rules apply.
Wait for a sell signal, a red colored super script line, you want the RSI line going below
the moving average, and 200 ema must be above the price.
Set your stop loss at a recent swing high, and then set your first take profit to a 1:1
risk to reward ratio.
Then move your take profit down after every target is hit, just like we did before.
If you are interested in the backtest results where I tested this strategy with a 100 trades
on the real market, I ll leave all of those results in my Discord.
This is including the timeframe I test on, the winrate, how many winning trades it had,
how many losing trades it had, and the total profit the strategy made.
And as a quick spoiler, it did pretty good.
Also I just tested the macd indicator on 100 different trades and the results were pretty
interesting to say the least.
So if you use the MACD YOU HAVE TO WATCH THIS VIDEO.
Thanks for watching and ill see you guys, next time