After testing many different trading strategies 100 times on the Trading Rush Channel, I think
we have enough data to make a top 5 list of trading strategies that work.
So I hope this list will help out the stock and forex traders, who are just starting out,
and have no idea about what strategies make money. If you are watching this channel for
the first time, subscribe to the channel, also check out other videos on the Trading Rush
channel, where we tested many indicators 100 times to find their real win rate. After all, you
don't want to risk your money on a strategy that doesn't even work.
One of the simplest and popular trading strategy, is the moving average crossover strategy.
I recently tested this strategy 100 times, and it was able to make money in the long
run. It didn't had a very good win rate like other strategies on this list. It had a win
rate of more than 45 percent, even with a reward to risk ratio of 1.5 to 1. Don't take
my word for it. You can watch the entire backtesting clip, and see how this strategy performed
yourself. You can find the backtesting videos on the Trading Rush channel, and on the Trading
Rush Website. There are two versions of this crossover strategy. One is the Exponential
moving average crossover strategy, where an exponential moving average is used. And other one is the
SMA crossover strategy, where the Simple Moving Average is used. These crossover strategies
are usually for swing trading. But I used it as a trend following strategy, because
as a new trader, you should probably follow the trend, since that's where most money is
made. I won't go into detail on how this strategy works. I have already made dedicated
videos on this topic. You can find them on this channel.
The fourth strategy in this list, that performed better than I expected, is the alligator trading strategy.
This is also a trend following strategy, but performed slightly better than the moving
average crossover strategy. When i tested the alligator strategy with a reward to risk
ratio of 1.5 to 1, it had a win rate of approximately 50 percent. One of the best part about the
alligator indicator i found after testing it, was its ability to detect if the price
is in a range or not. Since many beginner traders lose money when market is moving
sideways, this strategy takes the 4th spot on this list. Now, if you want to learn about
the alligator indicator, you can watch the alligator video on this channel. But if you
want to see the backtesting clip for the proof, you will have to watch it in the Trading Rush
App, or on the Trading Rush Website. That's because the video was removed from YouTube
due to some policies.
On Number 3, it's the strategy that had the second highest win rate. It's the bollinger bands
strategy. It had a win rate of approximately 55 percent. Now remember, 55 percent win rate
is a really good win rate, for a strategy with a reward to risk ratio of higher than
1. If we would have used a 1 to 1 ratio, the win rate could have been much higher than
this. But then we would have not made more profit per trade than the risk. I did modify
the basic bollinger bands strategy to filter false signals, and because of that, the bollinger
bands strategy did make money in the back test.
On number 2, it's not a strategy that performed better than the bollinger bands, but it has
so many perks, that it easily takes the second spot on this list. It's the Ichimoku Cloud
trading strategy. At first glance, the Ichimoku Cloud can look like a mess, that can scare
away new traders. But if you take time to clearly understand this indicator, you will
get better at trading. Because this indicator, not only gives the entry signals, but also
shows you where to set the stop loss, tells you when to avoid trading, and it even shows
the direction of the trend. If you try to master this indicator early on, you won't have to
spend time on learning more about stoploss and other indicators, since this is a complete
package. I have already made a detailed video on it. Watch it if you want to learn more.
Before we move on to the best strategy we have tested so far, here are some honorable
mentions. These are some trading tools that are very useful in trading forex and stock
market. The first tool I would recommend is the ATR indicator. If you find it difficult
to set the stoploss, the ATR indicator is for you. It takes price volatility into consideration,
and shows you where to set your stoploss. By setting the stoploss using the ATR indicator,
price will have less chance of hitting your stoploss, before going towards your profit
target. Another similar indicator, is the Parabolic sar indicator. There is also an
entry signal strategy around it, and I have tested it 100 times as well. But Parabolic
sar works great, as a stoploss indicator. You can even use it as a trailing stoploss
indicator, if you want to trail the price.
Another indicator that can be really useful, is the VWAP indicator. This indicator only
works for stocks. I know you guys want me to test this indicator 100 times, but I can't,
or at least I don't know how to. That's because the VWAP indicator is a tool, that shows the
Volume Weighted Average price. It shows where institutional buyers are most likely to take
trades. VWAP is my personal favorite indicator for stock trading, and I have made a video
on how to use it. Furthermore, I have also made live trading videos with it. But in those
videos, I don't take trades based on VWAP alone. I take trades that are at or near the
VWAP line, when some kind of candlestick pattern is giving an entry signal. So why don't I
test the VWAP indicator 100 times with the candlestick patterns? Well, you see, the price
doesn't exactly reverse at the VWAP. It can reverse a little bit above or below the VWAP
line, due to the increase in interest of buyers and sellers near the VWAP line. Because of
this, the backtest will become very biased, which will result in a wrong win rate. In
the strategies I test and have tested so far, the entry signals I took were unbiased, because
they were taken by looking at the indicators. For example, a crossover of the moving average.
Since indicators take past price data to calculate their values, the entry signals will look
exactly the same, as they will look in a live market.
Now, the best strategy, that also helped me double the forex account in the small account
challenge series. Is the MACD strategy. This strategy had the highest win rate in the strategies
tested 100 times series. The strategy is simple and effective. A beginner trader can easily
pick it up, and with a proper money management, can probably start making money in trading.
Money management is more important than this strategy. The MACD strategy, had a win rate
that was more than 60 percent. 60 percent win rate for a trading strategy with reward
to risk ratio of 1.5 to 1, is really good. Like other trading strategies on this list,
the MACD setup is also a trend following setup. But unlike other indicators, the MACD does
not give a lot of entry signals that frequently. But When it does, the probability of the trade
going in your favor is really high. And that's good. Since MACD doesn't give entry signals
frequently, beginner traders won't over trade, and blow up their accounts, as long as they
have proper money management in place. MACD strategy video was the first video on this
channel. If you want to learn more about the MACD strategy, or want to see the full backtesting
clip as a proof, check out the first video on this channel.
If some strategies or backtesting clips are not available on this YouTube channel, there
are probably available in the official Trading Rush App, or on the Trading Rush Website.
That's all. I will update this top 5 list, when I find more profitable trading strategies, after
testing them 100 times. So, if you want to see other trading indicators, tested 100 times
to find their real win rate, subscribe to the Trading Rush channel. And don't forget
to ring that notification bell, so you don't miss any new videos. Thanks to everyone for
watching.