PROOF: This Trading Strategy Can Make You Profitable The 1st Week!

Summary

In this video, the host challenges three random traders to implement a new trading strategy over a week, aiming for no mistakes. The results reveal varying win rates and profitability, with one trader achieving an 80% win rate without errors. The host outlines the strategy, which includes specific EMA criteria, candlestick patterns, and volume conditions. Viewers are then invited to suggest improvements to scale the strategy's profitability, with a live stream prize draw for the best suggestions, sponsored by Blue Guardian and Blackball Markets.

Takeaways

• 😀 The video presents the results of a challenge where three random traders tested a new trading strategy over a week.
• 📈 The strategy taught to the traders resulted in varying degrees of success, with one trader achieving an 80% win rate without mistakes.
• 🤔 The video includes an additional rule not previously mentioned, which involves the use of a 14 EMA in conjunction with a 20 EMA for trade decisions.
• 📊 Bogden was the second most profitable trader, achieving a 3% return with a win rate of 71% including mistakes and 80% excluding them.
• 🏅 Ali was the most profitable, with a 4% return and a win rate of 64% including mistakes, which improved to 78% when mistakes were excluded.
• 🥉 Pasta had the lowest performance, with a 25% win rate including mistakes and 33% excluding them, resulting in a -2% return.
• 📝 The video emphasizes the importance of not making mistakes to improve the win rate and profitability of the trading strategy.
• 📉 The video provides a detailed analysis of each trader's performance, including specific trades and their outcomes.
• 🎯 The strategy involves specific entry and exit criteria, including the use of EMAs, candlestick patterns, ATR, and tick volume.
• 💡 The video challenges viewers to improve the strategy by suggesting ways to increase the risk-reward ratio from 1:1 to higher multiples.
• 🎁 The video offers a prize draw for viewers who comment with their ideas on improving the strategy, with a chance to win a comprehensive package on the strategy.

Q & A

What was the main challenge presented to the three traders in the video?

The main challenge was to take a brand new trading strategy, trade it for a week without making any mistakes, and to see the results of their performance.

How many traders participated in the challenge and what were their names?

Three traders participated in the challenge: Bogden, Pasta, and Ali.

What was the performance of Bogden in terms of win rate and profit?

Bogden had a win rate of 71% with one mistake and an 80% win rate excluding mistakes. He was the second most profitable trader with a 3% return.

How did Pasta perform in the challenge and what was his ranking among the traders?

Pasta traded for only two days, had a win rate of 25% with mistakes and 33% without, and was the least profitable, ranking third.

What was Ali's performance in terms of trades, win rate, and profit?

Ali traded for the full five days, made 11 trades with gold, had a win rate of 64% with mistakes and 78% without, and was the most profitable with a 4% return.

What was the average win rate for the traders when including and excluding mistakes?

The average win rate including mistakes was 59%, and excluding mistakes, it was 72%.

What is the significance of the 14 EMA in the trading strategy presented?

The 14 EMA is an extra rule that wasn't given in the previous video but is essential for identifying short trades when it is in order with the 20 EMA.

How does the stop loss work in the trading strategy and where should it be placed?

The stop loss in the strategy should be placed at the high of the bear engulfing candle or the recent high, with some discretion allowed for the exact placement.

What is the role of the ATR (Average True Range) in the strategy?

The ATR is used to determine the position of the stop loss. The stop loss should be set at a level that is 4 pips above the ATR 5 value to ensure a 1 R (Risk Reward Ratio) trade.

What is the importance of tick volume in the strategy and how does it affect trade decisions?

Tick volume is crucial as it needs to be higher than the prior bar to confirm a valid trade setup, indicating increased market activity and potential for a profitable trade.

What is the challenge presented to the viewers at the end of the video and what is the incentive?

The challenge is for viewers to suggest ways to improve the strategy to achieve a higher risk-reward ratio. The incentive is a live stream prize draw where the winner will receive the whole package of the improved strategy.

Outlines

00:00

📈 Trading Strategy Challenge Results

The video introduces a trading strategy challenge where three random traders were tasked to implement a new strategy for a week without making mistakes. The results are presented, showing varying levels of success. Bogden, the second most profitable, traded USD/JPY with a 71% win rate including mistakes and an 80% win rate excluding them, resulting in a 3% return. Pasta had a lower win rate of 25% including mistakes and 33% excluding them, with a -2% return. Ali had the highest profitability with a 64% win rate including mistakes and 78% excluding them, resulting in a 4% return. The average win rate was 59% with mistakes and 72% without, indicating the strategy's effectiveness when executed correctly.

05:01

📊 Dissecting the Trading Strategy and Rules

The video delves into the specific rules of the trading strategy, emphasizing the importance of the 20 and 14 EMA being in order for short trades. It provides a detailed example of a short trade setup, highlighting the need for the price to close below the 20 EMA, the presence of a small bottom wick on the bearish engulfing pattern (BEAR), and the stop loss placement at the high of the BEAR or the recent high. The strategy also includes a target range based on the BEAR's high to low, an ATR above 4 pips, and a tick volume higher than the prior bar. The video demonstrates how to apply these rules in real trading scenarios, showcasing multiple trades and their outcomes.

10:03

🤑 Improving the Strategy for Higher Returns

The video concludes with a call to action for viewers to suggest improvements to the trading strategy in the comments section. It hints at the possibility of transforming the strategy into a multiple R strategy, potentially increasing returns from 1:1 to ratios like 1:2, 1:3, or higher. The video mentions that Ali, one of the traders, has found a way to improve the strategy to a 7R strategy. The challenge encourages viewers to think critically about the strategy's rules and to share their ideas for a chance to win a comprehensive package related to the strategy. The video also mentions a live stream prize draw for participants and provides a link to join a Telegram group for further details.

Keywords

💡Trading Strategy

A trading strategy refers to a specific approach or plan traders use to determine when to enter and exit trades. In the video, the host introduces a new trading strategy to three random traders and evaluates its performance over a week. The strategy's effectiveness is measured by win rates and profitability, which are central to the video's theme of trading improvement.

💡Win Rate

Win rate is the percentage of trades that result in a profit. It is a key performance metric in trading. In the script, the win rates of the traders are calculated with and without mistakes to assess the effectiveness of the trading strategy. For example, Bogden's win rate excluding mistakes was 80%, indicating a high success rate for the strategy when executed correctly.

💡Mistakes

Mistakes in trading refer to errors made by traders that deviate from the strategy's rules. The video script discusses the impact of mistakes on the traders' performance, showing that excluding these errors can significantly affect the win rate. For instance, the inclusion of mistakes lowered the win rates of the traders, emphasizing the importance of strict adherence to the strategy.

💡Cumulated Return

Cumulated return represents the total profit or loss from a series of trades over a period. In the video, Bogden's cumulated return is mentioned as 3%, which is a measure of the overall profitability of the trading strategy when executed over the five trading days, highlighting the strategy's potential for consistent returns.

💡EMA (Exponential Moving Average)

The Exponential Moving Average (EMA) is a type of moving average that places a greater weight and significance on the most recent prices of a currency. In the script, the 20 and 14 EMA are mentioned as part of the trading strategy's rules, indicating that the strategy involves analyzing the relationship between these moving averages to determine trade entries.

💡Stop Loss

A stop loss is an order placed with a broker to sell a security when it reaches a certain price. It is designed to limit an investor's loss on a position. In the video, the placement of the stop loss is discussed as a discretionary part of the strategy, with examples given from the trades taken by the traders, such as placing it at the high of a specific candle pattern.

💡Take Profit

Take profit is the price at which a trader decides to sell a winning position. It is a way to lock in profits from a trade. The video script describes how the range of a bear candle is used as the take profit target in the strategy, indicating a specific method for determining when to exit a trade for maximum profit.

💡ATR (Average True Range)

Average True Range (ATR) is a technical analysis indicator that measures market volatility by decomposing the entire range of an asset price for a given period. In the script, the ATR is mentioned as a criterion for trade entry, with trades only being taken when the ATR is above a certain threshold, demonstrating the strategy's use of volatility as a filter.

💡Tick Volume

Tick volume refers to the number of price changes in a security's trading during a specific time interval. In the video, a higher tick volume in the current bar compared to the prior bar is required for a trade to be considered valid, indicating that the strategy incorporates volume analysis to confirm trade signals.

💡Scalping

Scalping is a trading strategy that aims to profit from the bid-ask spread of a security. It involves making numerous trades within seconds or minutes to profit from small price movements. The video script does not explicitly mention scalping, but the focus on short-term trades and the use of a 5-minute chart suggest a scalping approach.

💡Improvement

Improvement in the context of the video refers to enhancing the trading strategy to achieve higher returns or better performance. The host challenges viewers to suggest rules that could improve the strategy, turning it into a 'multiple R' strategy, which means aiming for returns greater than the initial risk, as exemplified by Ali's email about making it a 7R strategy.

Highlights

A new trading strategy was introduced and tested by three random traders found on the internet.

The traders were challenged to execute the strategy for a week without making any mistakes.

The results of the trading challenge are presented, revealing the performance of each trader.

Bogden, one of the traders, achieved a high win rate and was the second most profitable.

Past, another trader, had a lower win rate and placed third in profitability.

Aly, who traded gold, had the highest return at 4% and won first place in the challenge.

The average win rate with mistakes was 59%, and without mistakes, it was 72%.

The video provides a detailed breakdown of the trading strategy, including entry and exit rules.

The importance of the 20 and 14 EMA in determining trade direction is explained.

Traders provided feedback on the strategy, with all finding it straightforward and profitable.

The video includes a live demonstration of the strategy on a 5-minute chart of USD/JPY.

A specific trade example is shown where the stop loss and take profit were set based on the strategy's rules.

The strategy's performance is analyzed, with a focus on the number of wins and losses throughout the day.

A challenge is issued to viewers to improve the strategy for higher returns.

Ali, one of the traders, claims to have found a way to make the strategy a 7R strategy.

A live stream prize draw is announced for the best strategy improvement suggestions.

The video concludes with an invitation for viewers to join a Telegram group for the prize draw results.

Transcripts

folks a few weeks ago I challenged three

random Traders I found on the internet

to take a brand new trading strategy

trade it for a week and not make any

mistakes today you're going to see the

results of those Traders you're also

going to learn the strategy I taught

them plus the extra rule that I gave

them and you're going to learn how you

can make the strategy even better it's

my private mental strategy it's all laid

out here in today's video we're going to

see trade examples stats everything all

coming up right here now on trading up

right we're going to dive in and have a

look at these three Traders we got

Bogden pasta and Ali thank you guys for

taking the challenge we're going to see

how they got on so to start off with

well let's have a look at Bogden so he

took five trading days and he had one

market that he traded which was us JPY

total trades seven trades so a good

number of Trades here to see how he

actually performed of that five of those

one very high win rate there was one

loss and he made one mistake so if we

have a look at the win rate with

mistakes it was

71% and if we have a look at the win

rate if you exclude the mistakes It's

actually an 80% trading strategy this is

quite high for a trading strategy a kind

of cumulated return if you were to give

a return on this it was 3% so that is

just basically saying we're going to

risk one R per Trade It gave him a 3%

result now we're going to find out where

this guy placed compared to the other

Traders so let's have a look at that he

was actually the second

most profitable out of the three Traders

so past let's have a look at him only

traded two days now he traded gold and

Bitcoin right so kind of different

markets Bitcoin I don't know if it

really works on bitcoin but anyway

that's what he decided to trade he only

took four trades probably because of the

two days worth of trading of that only

won once and lost twice with one mistake

now this resulted in a win rate which

wasn't as good obviously as bog

only 25% when you've include the

mistakes and without mistakes it was 33

so quite a low win rate but look only

two days so it kind of makes sense minus

two return which puts him in third place

here now let's have a look at Aly so Aly

traded the full five days which is good

because you get a bit more data he

traded gold only which was a paer we

kind of recommended and he took 11

trades on gold which is a lot that's a

lot of Trades seven

wins two losses

into mistakes now these mistakes I've

got to not here were break even so he

basically sort of managed to get out of

those for break even so with mistakes

let's have a look at the percentage

there was

64% bearing in mind that you know these

ones were break heans so it kind of was

a bit higher 78% is where we're lying so

the 80 and 78 is doable when you've got

a bigger sample size of trades in

trading I guess no and markets that this

works on so he came first and the in

return there was 4% now if we I suppose

break this all down and have a look at

these averages average win rate is

probably one to look at here so that was

59% with the mistakes people had made so

you try not to make mistakes if you

didn't make mistakes the average is 72

and that is a weighted average so

obviously there was less trading days

and less trades for pasta so that's why

that one rate is higher overall yeah we

won't even have a look at these we don't

really need to have a look at them let's

dive in and have a look at some of the

tra they've taken this was a trade that

Pastor had taken so he drew it on with

the chart because of it just wasn't

there to to show now uh Ali actually

gave us a full rundown here all of the

detail there I think it's like a seven

or eight page document the whole trading

account what he back tested so you've

got trades here we're going to go

through the rules of these strategies

the strategy in a second and then let

you know how you can make it even better

so this is one of the trades here you

see the green line faint Green Line

there we might go through too many of

them another green basically marked down

every trade I think this was a l but

there's a green there I don't know oh

there we go it was a win overall on the

day it was a loss now this one was a bit

weird the stop loss was way too big for

this I think he had the rule incorrect

there but yeah he's marked everything

down along with Bogden this was one of

the trades he took where he got a win

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let's get back on with the show right

folks so there's trading strategy and

there's also thoughts about a strategy

so we're going to hear the thoughts on

the three Traders what do they think

about this trading approach so Bogden he

had uh overall he said this what he said

overall I feel like this is a really

nice and straightforward strategy the

account is positive Ali had kind of a

similar response it's a nice strategy

and it's really profitable was some

quotes he had and even Pastor said I

love the simple rules like this that cut

out that subjective comp component where

which most strategies do have so folks

the overall feedback was positive right

let's dive into the next part right

folks let's dive in have a look at these

rules here so we've got short trade

example rules and the it's literally the

opposite for the buy trades or the long

trades so the first rule is that the 20

and the 14 EMA need to be in order now

the 14 EMA is the extra rule that wasn't

given in the last video but we're giving

it today so you can see here that's the

14 that's the 20 there in order so

therefore you're looking for shorts now

this this trade here is highlighted

because this is a perfect example of one

of the trades that we would take now

this is yesterday right so this is

yesterday so I'm recording this on the

25th we'll go through the whole day and

have a look at what trades actually

played out so price closes below the 20

which we've got as well so they're an

order it closes below the 20 bull

followed by beer so we got the bull

we've got the beer that's what we're

looking

for the beer has a small bottom Wick you

got a small bottom wick on the beer yep

stop loss at the high of the beer or

close is recent high so this is the only

part discretion really in this strategy

so in this case here you could put the

stop loss there but for the sake of like

what are we talking here 2.4 Pips you're

going to put your stop loss there and

sacrifice the extra 2.4 Pips and the

ability to get 1 R just because you're

going to have a wider stop now you

probably you're not going to put your

stop way up here to that little pivot

high or or way up here cuz it's just too

far away right but that is more than

doable to put it there so that's the

only bit of discretion with the strategy

is where you put your stop

loss uh Target the range of the beer so

you're you're going to take the range of

the beer so that's from the high to the

low in this case it's 18.2 Pips and

you're going to enter at the close of

the bear okay so when that bear closes

and that candle starts to open you would

enter there a and Target 18.2 Pips which

is the um Range of the beer okay so just

keep that in mind I know that was a

question that popped up last time so at5

above four Pips so we've got the four

pip ATR there and this is ATR 5 you can

see that we're clearly above that for

pretty much the duration of this Us doll

JPY session and five minute chart entry

and then last but not least the tick

volume needs to be higher than the prior

bar so we've got the prior bar volume

here this is the current bar volume and

you can see that it is higher let's just

Mark that off that's right so that's

higher so therefore we're good to take

that trade so let's mark this trade off

and then try and find some other trades

on this session which is yesterday so

it's July 24th that I recorded this and

I believe when this is going live it is

literally the day before so our stop

loss is going to go above the high and

we're going to enter there we don't get

stopped out so you can see here it gets

very close but we don't get stopped out

and then the next thing we're going to

do is take the range of this candle and

that would be our Target so we get in

there when do we get out we actually get

out over here so that was the tra that

trade there and the next trade we get

I'm just going to grab that arrow is

over here so this is another prime

example so you've got volume above

closes below these are in order we're

going to put our stop loss at the high

the recent high and enter it the close

there and then we're going to take that

range of the bear candle to be our take

profit so we don't get one hour with

that trade but we still do it all right

now the next one we've got is I believe

it's this one here so yep another setup

so this is all in the Asia session now

we're going to probably put our stop

loss up here enter at the close and then

we're targeting the range of that candle

now because of this it actually does end

up being a 1 hour trade we get out there

let's just Mark that off and I'm not

just going to mark off the next few

trades so did we get one here no we

didn't because it was lower

volume did we get one here low lower

volume now there was one here that was

kind of e it was like equal volume might

have taken that but we're just going to

ignore it for now let's have a look now

these are still in order we haven't got

any small

Wicks let's have a look now we flip to

Longs here

here let's get a different kind kind of

Arrow so we're looking for bullish

setups when we're above there The 8 Hour

still really high so it's all good we

haven't got any bearish setups that are

coming in that volume's not higher let's

have a look let's have a look this one

here so we're just going to grab that so

those are now on order small Wick higher

volume so we now get another sell trade

so that's another another one that goes

so where would we put our stop loss

there so you could put it there it is a

little bit too high you're probably

actually going to maybe put it there if

you want to be conservative or just

leave it where it is and Away you go you

get your one R there that's another win

let's have a look this is a potentially

another setup lower volume unfortunately

that one no equal

volume slightly higher volume there so

this was another one that

one here um any others no this one here

higher volume so another

one this is actually a crazy good day

for the shedy it's and the volume sort

of dies down here so you probably just

it's too choppy in there so let's go

with is there any more that one there

was high volume so you might have wanted

to take this as well now your stop loss

needs to be okay you may have got

stopped out just on that one if you had

your stop there that would have probably

been a loss so one loss let's call it

one loss let's just be fair it was one

loss there stop loss would have been

just taken out by a couple of Pips

and we will count them up so one

loss one two

three four five six wins so five hour in

the day with this approach now there's a

way to make this strategy better you're

going to find out in a second but I just

want to prove to you that this is

literally the market see here this is

the last bar on the market right so this

is just yesterday's trades on us doll

JPY 5 minute chart you can see the tech

chart just moving there so it is the

live live market that we have just

randomly picked this day and has had all

these winners okay so folks what do you

need to do to find out how to improve

this strategy so that's coming up right

now hey folks one of you behind me I'm

at blackball markets headquarters here

in Oakland New Zealand speaking of VI

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below all right folks if you want to

find out how to make this strategy even

better you've got a challenge so the

challenge is to jump into the comments

of this video and tell me your ideas on

what you think the rules are to make

this strategy a multiple uh strategy

that means that instead of going for a

one: one which is this strategy at the

moment you can go for a 1 to two 1: 3 1

to four 1 to 5 one to six what are the

rules to actually make this strategy

even better now I'll give you a little

hint Ali who has been on this who we saw

as results actually just sent me an

email today and said that he found a way

to make this a 7R strategy so he knows

he's worked out some ways to do it I

don't know if he's worked out the way

but he's worked out some ways to improve

the strategy so it is a very strong

approach now if you have your ideas

check them in the comments what we're

going to do is do a live stream prize

draw but whoever won this so whoever

gets it right is going to go in the draw

to win the whole package right the whole

package of the strategy there is a

package coming if you do want to see the

live stream prize draw then there's

going to be a link below this video and

in the comments to the telegram where we

will be announcing the live stream prize

draw that you can go and join and see if

you won see who won um that kind of

thing so folks I want to see you over

there go and click that link join that

telegram so you can see the live stream

put your answers in the comment of this

video and we'll see you when we've got

the results in in a couple of weeks all

right folks have a great rest of the

trading week and we'll see you in the

next episode of trading n