Hey now. I'm back with another trading system review. In this installment of Trader's Landing,
I'm going to take the concepts from this Secret Mindset video and turn it into a
complete trading system that has been proven profitable over a series of 100
consecutive trades. Just make sure to stay through the end where I give you my five
optimization tips that will really surge those results.
And if you want to see more content like this then run through that subscribe button like...
I call this system the Double Bounce, and it uses five free TradingView indicators.
As always links and settings to all indicators are listed in the description below.
The first indicator is the Volume Weighted Average Price or VWAP. I am going to keep the settings and
style at default. The VWAP consists of three lines. First the VWAP line itself. Second,
the upper band, and third, the lower band. The VWAP is generally used as an intra-day indicator
and has similar movement characteristics to a standard moving average. However,
unlike standard MAs this study incorporates volume in an attempt to determine trend
direction. One thing to note, at standard settings the VWAP will reset at the close
of the trading day. In this system we are going to use the VWAP bands to confirm our entries.
The second free TradingView indicator is another Volume Weighted Moving Average,
but on this study, I am going to set the standard deviation band multiplier at 2 and keep the
default style. The second VWAP will be used for an additional price level entry confirmation.
The third study is the Trading Session Indicator. I will set the time zone to highlight
20:00 hours to 04:00 hours, and shade the background in red.
This non-mathematical indicator will shade the areas four hours before and after the daily
close to avoid the VWAP reset. I will only be taking setups outside the shaded areas.
The third study is the Qualitative Quantitative Estimation Mod or QQE. Inputs will be kept at
default. The QQE Mod incorporates the RSI and the ATR in an attempt to chart market conditions.
On this chart the QQE oscillator will be used to spot divergences.
The final study are Heikin-Ashi candles. Inputs and style will be kept at default.
Heikin-Ashi means average bar in Japanese. These bars are similar to standard Japanese
candlesticks but are calculated differently and are used by many traders to filter out market
noise. In this system the Heikin-Ashi candles will be used for our triggers.
Let's go over enter criteria and review some examples. As always system rules and details
are listed in the description below. This chart is Bitcoin versus the US Dollar five-minute candles.
The rules to enter along on The Double Bounce are. First, price must be four hours away from
the VWAP reset out of the red shaded area. Second, price must either close or touch one of the lower
VWAP bands. Next, we are looking for bullish divergence on the QQE Mod. You can see here
we have a lower low on price, and a higher low on the QQE Mod. Finally, there is a green Heikin-Ashi
candle that closes above the VWAP band. All the conditions are met when this candle closes.
That is our trigger candle. We place our stop below the swing low and target two to one. And
this setup hits our target. If you enjoy this content make sure to click that like button.
iI have one more long example. Price is outside the red shaded area. Price touches the bottom
VWAP band. Then we can see bullish divergence on the QQE Mod. There is a lower low on price,
and a higher low on the QQE. Everything converges on this candle and it serves as
our trigger. The stop is placed below the swing low and 2 to 1
is our target. And after a while this one hits our target. Now we flip the shorts.
This is what i will test for shorts. First, price is four hours away from the VWAP
outside the red shaded area. Then price touches an upper VWAP band. Third,
there is bearish divergence on the QQE Mod. We can see a higher high on price,
and a lower high on the QQE. Fourth, a red Heikin-Ashi candle closes below the upper VWAP
band. All the criteria is met when this candle closes. That is our trigger candle. The stop
is placed above the swing high and our target is two to one. And this one hits our target.
I'm going to show you one more quick short example.
First, price is outside the red shaded area. Second price closes above the upper VWAP band.
Next there is divergence on the QQE oscillator. A higher higher price,
and a lower high on the indicator. Then we can see a red Heikin-Ashi candle close
below the upper VWAP band. All of our entry rules are met on this trigger candle. The stop is placed
above the previous swing high, and the target is two to one. And this one hits the target level.
I'm going to give you some intriguing ideas on how we can make this system better,
along with a Trader's Landing Score. And now it's time to do what I do.
if you enjoy this content please hit that like button. Remember this is just
100 tests on one instrument. If you are thinking of using the system please do
all the required testing and be sure to let our community know what you discover.
This test was done on Bitcoin vs. the US Dollar five-minute candles. It took
a brisk two and a quarter months to find the 100 setups that met all the rules.
Most wins and losses in a row equal each other at six. The win rate here was 56% with a total gross
gain on account being 67% risking one percent per trade. And remember I'm going to give you
my five optimization tips that will make this strategy endure better over a larger data set.
The equity curve here is what most traders would like to see.
We start right away with an impulsive move up. Followed by a short-duration drawdown from the
six losses in a row. And then the second half of the test ends up with a huge impulsive move.
If we look at all the trades taken but on the 4-hour chart
you can see that this system actually performs better when the higher time
frame is a bit more choppy. That is because this system is not a
trend-following system and seems to do better during these more-ranging market conditions.
What score would you give this strategy? Let me know in the comments below.
I give this system a trader's landing score of eight. Because as many of
you know I am a trend trader, but the data seems to indicate
this may work well during consolidation. But only more testing will confirm for sure.
Remember the enemy of great is good. I have five ideas on how we can improve
this system. The first idea to optimize this strategy is to move the stop to break even
after the position hits one to one. That would have filtered out these three
losing trades in a row and would most likely radically increase your gain on account.
The second optimization tip, which should be compared with the first,
is moving the stop to break even when the first opposite VWAP band
is hit. I am not sure which works better, but one of these methods should be implemented.
The next suggestion would be to deploy the SSL Hybrid like I used in this video as extra
confirmation. You can see on this chart that the SSL Hybrid can act as confluence
in lieu of the QQE Mod. Here is another example where the SSL Hybrid gets you into.
Just briefly going over some limited examples it may work better with this particular strategy.
Next, and this tip is quite powerful and is a big change to this system. Look at this chart.
You can see where the VWAP lines up with the 200 EMA and we get a great reaction. And on
this chart, it actually happens twice. Combining confluence with these two particular indicators
will produce much less signals, but they will be very strong indeed.
Furthermore, if we take the last point and add hidden divergence you are talking about really
upping your game. Look on this chart where we get a reaction on both the VWAP and the 200 EMA along
with hidden bullish divergence on the QQE Mod oscillator. You can see here we have a lower low
on the indicator and a higher low on price. How can you not take that trade?
Check out this playlist for more profitable systems. And have a great day,
because you deserve it.