Forex trading setup with a 100% win rate so far

 

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I've been watching The Transparent trader for several years now on Youtube. Out of all the wannabe's his channel is like a breath of fresh air. Furthermore I have back-tested several of his strategies and found that his back-tested were similar to mine.  In this video in which he says that this strategy was created back in Oct 2021 and has given him a 100 win-rate was only over 10 trades but still a promising start for further backtesting.   The strategy is based on using specific market conditions using a couple of ideas which were picked up from Larry Williams 

It doesn't trade very often in fact it's only made 10 trades. 

Firstly this strategy works on US Dollar Canadian Dollar on the daily chart and for the trade entries we're looking for three specific conditions: we're looking at trading day of the month so for this strategy we're only looking at trading day eight if it's trading day eight then we look to see is the close less than the close five bars ago or in this case five days ago if it is then we move on to number three and we're looking at the Williams percent are oscillator I have this set to 14 periods which is standard on most charting packages and we want to see that the oscillator is slightly oversold below 50 or below the midline. 

Once we see those three conditions then we buy the next bar on the open.  There are some examples shown in the video below. On the chart in just a second looking at the exits we have a stop loss of Pips it's just a fix pip stop and we're using our buy allow exit or our first profitable close but with a seven-day delay what that means is we have to be in the trade for a minimum of seven days and then after the seven days we look to see at the close if we're in profit if we are in profit then we take the profit and we exit the trade if we're not in profit then we stay in the trade so we're always in the trade of minimum of seven days now I actually run three optimizations when I was developing this strategy I optimized for the best trading day of the month and I actually optimized for the highest percent profitable you can see that in the original video then I optimized for the bailout exit with the seven-day delay 

I optimized that seven-day delay number and I found that for what I wanted seven works the best and then I optimized the stop loss and found that Pips worked very well too so let's have a look on the chart here's some trade examples the first one here we can see we don't know it's trading day eight but take for granted that it is trading day eight and we see that the close is lower than the close five bars ago and this is the Williams percentile oscillator yes it is oversold always certainly below the midline so we get in the trade and then we've held the trade for one two three four five six seven bars that seventh bar we were in profit so we exited on the open of the next bar another one here this close here was lower than the close five days ago 

it was trading day eight and the oscillator was below the midline and we've got our buy it out exit and the same on here so as normal with a lot of my strategies a really simple one to trade when I first developed the strategy I used data from to and that's what I called the in-sample data and you can see this in the original video and then I took the data from up to October which at the time was the most data I had and that was what I call the out of sample data the out of sample or that smaller period of data none of the optimizations which I've previously done were included using that data so any of the previous optimizations which I've done if they had been done correctly if the strategy was robust and the edge still existed 

I'd like to see the performance continuing in that smaller out of sample or most recent data set and as you see in the original video that was the case that the strategy did continue to perform in that few years of out of sample or unseen data but now it's July a few years extra so now we have a really big sample of out of sample data we have that original to October chunk but then we have from the date of creation or October right the way through to today which is July and that's what we're going to look at next I'm going to show you three separate strategy performance reports the first being the most recent data we have that completely unseen data from October to July then we're going to look at the fall out of sample from to July and then we look at the full data set from through to July. 

in this first workspace we're going to be looking at data from October to July if I scroll back we can see through the trades and we can see that the first trade is in October looking at the performance report we can say we've had a total of trades and we've got winners there's what the equity curve looks like in fact there's the close to close and you can clearly see that every trade there was a winner by the way I want to mention that I have included per trade of costs let's just go back to the total trade analysis and you'll see that we've got a massive average trade anyway of this is trading one full lot and those of you who've already noticed this is a a buy only or a long only strategy 

I want to just show you the actual the Buy and Hold chart and you can see that yes okay US Dollar Canadian Dollar has been in a bit of an uptrend but not perfectly and later on when we're looking at more data I'll continue to show you this Buy and Hold chart so you can see that we're not getting our Edge on the long side just because US Dollar Canadian Dollar has been going up over that years so the next workspace we're going to be looking at data again up until very recent which is July and starting trades in so the data we see here is the out of sample data which wasn't included when I done any of the first testing or the optimizations so looking at the performance report there's your Buy and Hold so you can see that US Dollar Canadian Dollar actually pretty much moves sideways over this period with some flat periods some down periods and some up periods there's the equity curve for our strategy close to close Equity curve looks like that and total trade analysis made trades out of those were winners which gives us win rate with a huge average trade dollars largest losing trade is still the same that's still our stop-loss value of Pips and let's just have a look at the Buy and Hold value and that's what the Buy and Hold return looks like that is purely just the price chart of US Dollar Canadian Dollar and you can see we've got really varying periods throughout that period of time 

so although it is a long only strategy it's worked even in the down periods so that's the updated performance report for that trading day of the month strategy for those of you who have been interested it's obviously been doing pretty well since I developed it but that's not typical of all my strategies when I develop a strategy I'll always include a watch period so after I've developed it I won't do anything I won't Trade It live and I'll watch it for a period of months sometimes three sometimes six months and then if it meets all the criteria which I want to trade live 

then I'll put it in my portfolio but not all my strategies do make it through that watch period but I'm pleased to say that a decent amount due hopefully this video has helped some of you guys out today and it's given you some ideas of how to use that trading day of the month technique when used correctly that trading day of the month technique isn't just curve fitting or overfitting and you can use it to produce profits well into the future which of course is our goal as Traders as I said earlier if you want to learn more about how I developed the strategy then please use the link and watch the earlier video so I hope you've enjoyed this video if you have then please give it a thumbs up and consider subscribing to