Does this Trading Strategy even make money in the Crypto Market? In this video, I'm going
to take 100 trades with one of the best trading strategies to find its win rate and to see
how much money it can actually make on the world's largest cryptocurrency, Bitcoin.
We have tested a lot of trading strategies 100 times till now, but the best trading strategy
we have tested on the Trading Rush Channel, was the MACD strategy. This strategy not only
got the highest win rate, but the profit graph was also consistently going in the upward
direction. Furthermore, it even got the highest score in the reliability category, and everyone
who watches Trading Rush most likely knows by now that the reliability score of a trading
strategy is more important than the win rate.
But here's the thing. If the MACD Trading Strategy got the highest win rate out of all
the strategies we have tested so far if we test it again on a different but good market
structure, it should get a high win rate again, right? Remember, on the Trading Rush Channel,
we don't simply believe a strategy works. Instead, we analyze the real data the strategy
produced in the real market and think logically. If data says it makes money, we use it and
make money. If the data shows a bad win rate, we simply don't use it!
In this video, we are going to test two things by taking 100 trades, first, if the Highest
Win Rate Strategy we saw on the Trading Rush Channel can also give a similar high win
rate on a different market. And the second thing we are going to test is, if the strategy
works in the Crypto Market especially on Bitcoin, and how much money you would have made in
this year, especially in approximately the last six months with this high win rate trading
strategy.
On the world's largest cryptocurrency, Bitcoin, the MACD strategy conditions are pretty much
the same, except there is one thing different with Bitcoin that can make you lose money
quickly. We will learn more about that at the end of the video.
Before we take 100 Trades, here's how the MACD strategy works on Bitcoin:
Step 1. Buy when the MACD line crosses above the Signal line, below the zero line, only
if the entry candle is above the 200 period moving average. Similarly, Sell when the MACD
line crosses below the Signal line, above the zero line, only if the entry candle is
below the 200 period moving average. If this sounds confusing, I have already made two
to three detailed videos on the MACD indicator, the mistakes people make with it, and the
best part about it.
Step 2. As you probably noticed, we are using the 200 period moving average to find the
trend direction, in other words, it is still a trend trading strategy. In the long setup,
set the stop loss below the pullback of the trend. And in the short setup, set the stop
loss above the pullback of the trend.
Step 3. Set the profit target 1.5 times the size of the stop loss. This number is not
randomly selected. It is the best reward to risk ratio we have found after taking 300
trades.
I tested this MACD strategy 100 Times on the largest cryptocurrency, and here's what happened,
and here are the points you should note.
Number 1. We are testing strategy on the latest market structure, because we are going to
trade on the current market structure, and not on some few years old data where the market
was slow and ranging and not worth day trading.
If you look at the chart, you can see that when the price was above the moving average,
the MACD showed the end of the pullback using the crossover, and many of these trades at
the beginning were won. When Bitcoin was in a downtrend, the MACD strategy simply gave
good short entry signals and many of those trades were won.
As you can tell, the MACD strategy is not only giving good entry signals like it did
when we tested it 100 times on the Forex Market, but the price movement of Bitcoin itself looks
very similar to a good Forex price chart. Since the MACD strategy we saw on the Trading
Rush channel does one job better than other indicators, show the end of the pullback with
high accuracy, it doesn't matter if it's Bitcoin or Forex Market, if the price is trending,
the MACD strategy will show the end of the pullback with great accuracy.
When we tested the MACD last time, the profit graph looked like this. The price was more
consistently moving in the upward direction. And as you can see, on Bitcoin, the profit
line in the Trading Rush App is also consistently going in the upward direction.
Also, this profit graph is way better than some of the other ones we have seen so far.
For comparison, here is the profit graph of another strategy we tested 100 times, and
here's the profit graph of the MACD strategy. As you can see, MACD's profit graph looks
a lot better in the long run.
In fact, while taking 100 trades, the MACD trading strategy on Bitcoin only lost 3 trades
in a row. This means the MACD strategy was just as reliable on Bitcoin as it was on the
Forex Market.
But that's not all. There is another reason the MACD strategy is performing so well on
Bitcoin.
You see, when Bitcoin was all over the news for the first time for making this big upward
move, the volatility on smaller timeframes was high. In other words, the price was making
big moves and not staying at the same place for a longer period of time. After Bitcoin
made a move in the downward direction, the volatility was relatively lower and the price
was staying in the sideways direction for a longer period of time.
Now the MACD strategy is performing so well
in the latest market structure, is because most of the current market structure is making
good moves like before. Since the MACD strategy is a trend following strategy, and since the
current market structure is making good moves, the MACD strategy that we saw in the very
first video on the Trading Rush Channel, is giving a high win rate on Bitcoin just like
it did in the Forex Market, and the profit graph is consistently moving in the upward
direction.
But there is one important thing you should keep in mind. You see, Bitcoin is still Bitcoin.
One time it is going to the moon, and the other time it is crash landing. The price
movement of Bitcoin is different than what you see on a good stock, or even in the Forex
Market.
When the price movement is good like it is right now, the MACD win rate will be good
because the MACD strategy needs a trend. But if the Bitcoin movement slows down like it
did last time, and the price starts to stay in a range for longer periods of time, the
win rate will be obviously lower because the MACD strategy is not a range market strategy.
If the price itself is not moving, you can't magically make money. But right now the price
movement is good, and the MACD trading strategy on Bitcoin is giving a very high win rate
even with a high reward risk ratio, and we have the data that proves it!
After 100 trades on the world's largest cryptocurrency, Bitcoin, the MACD strategy got an approximate
win rate of 62 percent with a 1.5 to 1 reward risk ratio. Remember that the reward to risk
ratio was 1.5 to 1, so a 62 percent win rate is actually very high. If you want a higher
win rate, you can reduce the reward risk ratio to 1, but in the data we saw by taking 300
trades, the 1.5 to 1 reward risk ratio was the sweet spot. The MACD strategy performed
excellently on Bitcoin, and only lost 3 trades in a row and won 9 trades in a row. And the
profit graph consistently went in the upward direction just like we expected!
You can improve the win rate of the strategy even more, by combining it with the high probability
strategies I talked about in the Trading Rush Price Action Course. The link is in the description!
Also, Support Trading Rush on Patreon, and get to see more In-Depth Trade Analysis with
the current best strategies I use. That's all!