This Trading Strategy Could Change Your Life — Transcript

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1. 0:00This could change your life, so pay
2. 0:01attention. In a typical move, if the
3. 0:03candles are moving in one direction,
4. 0:05essentially you're going to try and
5. 0:06trade in that direction. But what
6. 0:08happens is traders will end up taking a
7. 0:10buy and wonder why price is coming lower
8. 0:12before stopping them out. Because people
9. 0:14think the market moves in a perfect
10. 0:15cycle just like this. But the reality is
11. 0:17it doesn't. What you actually need to
12. 0:19wait for is price action to manipulate
13. 0:21lower before it goes higher or
14. 0:23manipulate higher before it goes lower.
15. 0:25So what this essentially would look like
16. 0:26is a new candle would open, come lower,
17. 0:28sweeping below the previous candle, but
18. 0:31closing higher, engulfing the previous
19. 0:34candle. This is manipulation in the
20. 0:36market and once you have this, it's a
21. 0:38lot easier to place a trade with a stop
22. 0:40loss below the manipulation low
23. 0:42targeting a 1:2. The best place to find
24. 0:44this is on a 4-hour time frame. So go
25. 0:46and back test it and let me know how you
26. 0:47get on in the comments.
27. 0:48>> All right, so he told us to back test
28. 0:50it, so let's build the indicator and
29. 0:51back test it. So I used LuxAlgo Quant to
30. 0:53build this exact strategy. I gave it a
31. 0:55screenshot, explained exactly what he
32. 0:57said, and it ended up being quite good.
33. 0:59We have a 6K net profit, 46% win rate,
34. 1:031.692 profit factor, and only a 1%
35. 1:06drawdown with $1,600. So this equity
36. 1:09curve is quite nice. And the crazy thing
37. 1:11about using LuxAlgo Quant now is you can
38. 1:14build out a strategy like this. You can
39. 1:16see here we added actually a 200 EMA
40. 1:18filter. I can see if I were to take that
41. 1:20off, the strategy ends up being quite
42. 1:22choppy. But just adding that trend
43. 1:24filter really ends up giving it a nicer
44. 1:27curve. So within the indicator, I
45. 1:28actually had a setting to trade either
46. 1:30the same direction of candles like he
47. 1:31had here, all bullish or all bearish for
48. 1:34that setup, or if you want to trade any.
49. 1:36And you can see here on any, the net
50. 1:38profit actually goes way up, but only
51. 1:40recently was it really performing. He
52. 1:42also had his stop loss at the candle
53. 1:45high, as you can see here, and then a
54. 1:472R, which we have with the risk-reward
55. 1:50ratio. But from here now, we can mess
56. 1:52around with the setting. After going
57. 1:54through a lot of different types of stop
58. 1:56losses and take profits, I noticed that
59. 1:58not using the candle high and low is the
60. 1:59best. Having an ATR of a five multiplier
61. 2:03with a three risk to reward, we're
62. 2:05getting a even better curve, 55% win
63. 2:07rate, 10K net profit, 2.3K drawdowns. We
64. 2:10can also adjust the time frame, and we
65. 2:12can test different time frames. And you
66. 2:14notice here on a five minute, we
67. 2:15actually have a really nice negative
68. 2:17curve. So, I could say to the chat, "Can
69. 2:19we switch the entry conditions?" And
70. 2:22then what it'll do is it'll switch those
71. 2:24entries conditions, can see how it
72. 2:25performs on the opposite. And look at
73. 2:27that, just by asking it to switch it,
74. 2:29look at this really nice positive curve
75. 2:31of a 2.58 profit factor, 68% win rate,
76. 2:35$300
77. 2:36max drawdown. So, actually quite
78. 2:38interesting at the lower time frame
79. 2:40works on the opposite end. So, that's
80. 2:42the nice thing about using LuxAlgo
81. 2:43Quant, you can chat with it and update
82. 2:45strategies in real time in a matter of
83. 2:47minutes. But like always, I want to
84. 2:49share this exact chat that I used to
85. 2:51build this strategy. You're going to get
86. 2:53the strategy source code here that you
87. 2:54can actually pull into TradingView if
88. 2:56you want. Just comment the word strat,
89. 2:58and I'll send you a link.