After testing many different trading strategies 100 times on the Trading Rush Channel, I think we have enough data to make a top 5 list of trading strategies that work. So I hope this list will help out the stock and forex traders, who are just starting out, and have no idea about what strategies make money. If you are watching this channel for the first time, subscribe to the channel, also check out other videos on the Trading Rush channel, where we tested many indicators 100 times to find their real win rate.
After all, you don’t want to risk your money on a strategy that doesn’t even work. One of the simplest and popular trading strategy, is the moving average crossover strategy. I recently tested this strategy 100 times, and it was able to make money in the long run. It didn’t had a very good win rate like other strategies on this list. It had a win rate of more than 45 percent, even with a reward to risk ratio of 1.5 to 1. Don’t take my word for it. You can watch the entire backtesting clip, and see how this strategy performed yourself. You can find the backtesting videos on the Trading Rush channel, and on the Trading Rush Website. There are two versions of this crossover strategy. One is the Exponential moving average crossover strategy, where an exponential moving average is used.
And other one is the SMA crossover strategy, where the Simple Moving Average is used. These crossover strategies are usually for swing trading. But I used it as a trend following strategy, because as a new trader, you should probably follow the trend, since that’s where most money is made. I won’t go into detail on how this strategy works. I have already made dedicated videos on this topic. You can find them on this channel. The fourth strategy in this list, that performed better than I expected, is the alligator trading strategy. This is also a trend following strategy, but performed slightly better than the moving average crossover strategy. When i tested the alligator strategy with a reward to risk ratio of 1.5 to 1, it had a win rate of approximately 50 percent. One of the best part about the alligator indicator i found after testing it, was its ability to detect if the price is in a range or not. Since many beginner traders lose money when market is moving sideways, this strategy takes the 4th spot on this list.
Now, if you want to learn about the alligator indicator, you can watch the alligator video on this channel. But if you want to see the backtesting clip for the proof, you will have to watch it in the Trading Rush App, or on the Trading Rush Website. That’s because the video was removed from YouTube due to some policies. On Number 3, it’s the strategy that had the second highest win rate. It’s the bollinger bands strategy. It had a win rate of approximately 55 percent. Now remember, 55 percent win rate is a really good win rate, for a strategy with a reward to risk ratio of higher than 1.
If we would have used a 1 to 1 ratio, the win rate could have been much higher than this. But then we would have not made more profit per trade than the risk. I did modify the basic bollinger bands strategy to filter false signals, and because of that, the bollinger bands strategy did make money in the back test. On number 2, it’s not a strategy that performed better than the bollinger bands, but it has so many perks, that it easily takes the second spot on this list. It’s the Ichimoku Cloud trading strategy. At first glance, the Ichimoku Cloud can look like a mess, that can scare away new traders.
But if you take time to clearly understand this indicator, you will get better at trading. Because this indicator, not only gives the entry signals, but also shows you where to set the stop loss, tells you when to avoid trading, and it even shows the direction of the trend. If you try to master this indicator early on, you won’t have to spend time on learning more about stoploss and other indicators, since this is a complete package. I have already made a detailed video on it. Watch it if you want to learn more. Before we move on to the best strategy we have tested so far, here are some honorable mentions. These are some trading tools that are very useful in trading forex and stock market. The first tool I would recommend is the ATR indicator. If you find it difficult to set the stoploss, the ATR indicator is for you. It takes price volatility into consideration, and shows you where to set your stoploss. By setting the stoploss using the ATR indicator, price will have less chance of hitting your stoploss, before going towards your profit target.
Another similar indicator, is the Parabolic sar indicator. There is also an entry signal strategy around it, and I have tested it 100 times as well. But Parabolic sar works great, as a stoploss indicator. You can even use it as a trailing stoploss indicator, if you want to trail the price. Another indicator that can be really useful, is the VWAP indicator. This indicator only works for stocks. I know you guys want me to test this indicator 100 times, but I can’t, or at least I don’t know how to. That’s because the VWAP indicator is a tool, that shows the Volume Weighted Average price.
It shows where institutional buyers are most likely to take trades. VWAP is my personal favorite indicator for stock trading, and I have made a video on how to use it. Furthermore, I have also made live trading videos with it. But in those videos, I don’t take trades based on VWAP alone. I take trades that are at or near the VWAP line, when some kind of candlestick pattern is giving an entry signal. So why don’t I test the VWAP indicator 100 times with the candlestick patterns? Well, you see, the price doesn’t exactly reverse at the VWAP.
It can reverse a little bit above or below the VWAP line, due to the increase in interest of buyers and sellers near the VWAP line. Because of this, the backtest will become very biased, which will result in a wrong win rate. In the strategies I test and have tested so far, the entry signals I took were unbiased, because they were taken by looking at the indicators. For example, a crossover of the moving average. Since indicators take past price data to calculate their values, the entry signals will look exactly the same, as they will look in a live market.
Now, the best strategy, that also helped me double the forex account in the small account challenge series. Is the MACD strategy. This strategy had the highest win rate in the strategies tested 100 times series. The strategy is simple and effective. A beginner trader can easily pick it up, and with a proper money management, can probably start making money in trading. Money management is more important than this strategy. The MACD strategy, had a win rate that was more than 60 percent.
60 percent win rate for a trading strategy with reward to risk ratio of 1.5 to 1, is really good. Like other trading strategies on this list, the MACD setup is also a trend following setup. But unlike other indicators, the MACD does not give a lot of entry signals that frequently. But When it does, the probability of the trade going in your favor is really high. And that’s good. Since MACD doesn’t give entry signals frequently, beginner traders won’t over trade, and blow up their accounts, as long as they have proper money management in place.
MACD strategy video was the first video on this channel. If you want to learn more about the MACD strategy, or want to see the full backtesting clip as a proof, check out the first video on this channel. If some strategies or backtesting clips are not available on this YouTube channel, there are probably available in the official Trading Rush App, or on the Trading Rush Website. That’s all. I will update this top 5 list, when I find more profitable trading strategies, after testing them 100 times.
So, if you want to see other trading indicators, tested 100 times to find their real win rate, subscribe to the Trading Rush channel. And don’t forget to ring that notification bell, so you don’t miss any new videos. Thanks to everyone for watching..