Trading Strategy had 100% Win Rate in 2024 - What’s the Secret?

Summary

In this video, the presenter shares a trading strategy with a 100% win rate in 2024, explaining its rules and performance. The strategy, based on an outside bar pattern on the EUR/USD daily chart, is simple yet effective, with trades exiting at the first profitable close or a 200-pip stop loss. The presenter also demonstrates how to quickly code the strategy using Multicharts for backtesting. As a bonus, a second highly accurate strategy for trading the GBP/USD is introduced, emphasizing their complementary nature. The video highlights the importance of combining strategies for improved trading performance.

Takeaways

• 😀 A trading strategy with a 100% win rate in 2024 is demonstrated in this video, based on an outside bar pattern on the EUR/USD daily chart.
• 😀 The strategy is highly accurate but doesn’t make large profits per trade due to small profits and low trade frequency.
• 😀 The strategy exits positions based on a 'first profitable close', where it exits when there's any profit, often around a 5-pip move.
• 😀 Trade frequency is low—this strategy made a trade every 6 weeks in 2024, and it's recommended as part of a broader portfolio of strategies.
• 😀 The strategy uses a 200-pip stop loss, and trades are exited at the close of the trading session if profits are positive.
• 😀 Multicharts or TradeStation can be used to program and backtest the strategy quickly with just a few lines of code, compared to more complex methods like Python.
• 😀 The strategy has shown consistent profitability over the past 15 years, despite occasional drawdowns and losing years.
• 😀 In 2024, the strategy made a net profit of 1.9 R, illustrating its consistent but moderate gains.
• 😀 A second complementary strategy is introduced, using Williams Percent and monthly timing, which also has a high win rate and can be traded alongside the first strategy.
• 😀 Even though both strategies don’t trade often, they complement each other well, with one opening trades when the other is flat, offering more consistent opportunities.
• 😀 The video emphasizes the importance of diversifying trading strategies within a portfolio to balance out frequency and profitability, especially with low-frequency strategies like these.

Q & A

What is the primary trading strategy discussed in the video?

The primary strategy discussed is a long-only trading strategy on the EUR/USD daily chart. It involves identifying an outside bar pattern, where the current bar's high is higher than the previous bar's high, and the low is lower than the previous bar's low. The close must also be lower than the previous bar's low. Once these conditions are met, the strategy buys at the next session's open and exits when a profit is made or at the end of the session.

What is the win rate of the strategy in 2024?

The strategy had a 100% win rate in 2024, meaning it did not have any losing trades that year.

Why does the strategy not generate significant profits despite its high win rate?

The strategy generates small profits because it exits trades with minimal gains, typically taking profits at the end of the session or when even a small profit (like 5 pips) is realized. Additionally, the strategy has a low trade frequency, which limits its overall profitability.

What is the average trade frequency for this strategy in 2024?

In 2024, the strategy made an average of one trade every six weeks.

What is the stop-loss for the strategy?

The strategy uses a 200-pip stop loss to limit potential losses on each trade.

How does the presenter suggest using this strategy within a larger portfolio?

The presenter suggests using this strategy as part of a portfolio of strategies. Since it has low trade frequency, it is recommended to complement it with other strategies that trade more frequently to create a diversified and balanced trading approach.

What programming platform does the presenter use to implement the strategy?

The presenter uses MultiCharts, which is integrated with TradeStation, for programming, backtesting, and automating the strategy.

How easy is it to code this strategy in MultiCharts compared to Python?

The presenter claims that coding this strategy in MultiCharts is very simple, requiring only four lines of code. This is in contrast to using Python, where the presenter suggests that the code could be much longer and more complex.

What is the performance of the strategy over the past 15 years?

Over the past 15 years, the strategy has maintained a high win rate of 86.6%. Although it has experienced some drawdowns, it has been consistently profitable, even in a downtrending market like the EUR/USD pair.

What is the second strategy introduced in the video, and how does it complement the first strategy?

The second strategy uses the Williams Percent indicator to identify oversold conditions and trades only on certain days of the month. It complements the first strategy by opening trades when the first strategy is not in action, thereby providing a more frequent trading opportunity.