The “Safe” Way to Use Martingale Trading Strategies (Almost Nobody Does This)

Read below and I guarantee I’ll change your mind about Martingale Trading Strategies. At the very least, I’ll give you some ideas to apply to your risk management in trading. I’ll also share the exact setup I’ve been using for the last 9 years, which has returned an average of 1.32% ROI per week. It doesn’t sound like a lot, but because it compounds, I’ve been doubling my account roughly every 13 months, with an average annual return of 94%.

Martingale money management and risk management systems have a bad reputation for being an extreme version of risk management. Sellers of Martingale algos love to show those smooth equity curves, but they gloss over the massive amount of risk you’re taking on when it gets pushed to its limits. Oftentimes, this results in blowing up an account.

Using a Martingale system where you simply double down after every loss, without proper risk management or understanding the tolerance of your setup, is a recipe for disaster. I can virtually guarantee you’ll blow your account unless you make your money quickly and get out.

If you haven’t taken every precaution and opportunity to learn about the market you are entering, and haven’t properly assessed the risk of your setup before entering, then you’ve crossed the line from a professional trader or investor into a gambler. That’s really the dividing line between the two.

I’ll tell you a nearly foolproof way to use Martingale right now. I say “nearly” because it all depends on your backtesting, and how good you are at it. Even the most robust backtests can break or change over time.

Step 1: Get a mechanical setup that is at least 1:1, or slightly higher (like 1.3:1), to offset fees, slippage, spreads, etc.

Step 2: Run a backtest and get the largest sample size possible—at least a few thousand trades. The bigger, the better. Try to get the highest win rate you can, but it isn’t the most important factor.

Step 3: Look at the extremes of the backtest, especially consecutive losses and wins. Plan your Martingale strategy around those extremes.

For example, if your system has a 50% win rate and shows up to 12 consecutive losses, wait until the setup has at least 5 consecutive losses before entering. In this case, you’re planning for up to 7 more losses (assuming your account can handle it). You could also flip this and bet on a loss after a streak of wins, but you’d need to reverse the risk/reward. This is similar to the high-low card counting technique, which actually works.

Step 4: Understand that markets always change, and backtests can break over time. Diversify across multiple setups. They won’t all fail at once, and ideally you’ve made enough and rotated into safer strategies before that happens. Also diversify across uncorrelated instruments and markets.

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How I’ve Been Using It Successfully for 9 Years

First off, even though I’m saying Martingale can work, it isn’t necessarily the best approach for everyone. If you are risk-sensitive or new to trading, I would not recommend this. If you’re a professional trader with better setups that outperform this with less risk, stick with those. You may be better off using a consistent position-sizing strategy.

That said, here’s what I’ve been doing.

I’ve been using Martingale on ETFs for indices, taking long-only trades. The setup looks for bottoms using RSI oversold signals. Since you’re only going long, you’re essentially buying the dip and waiting for a rebound.

The win rate is around 60–70%, depending on the asset. It uses roughly a 1.1:1 reward-to-risk ratio. The 70% win rate comes from a backtest of over 7,000 trades on one particular index ETF, so I focused heavily on that.

You could also use leveraged ETFs, but then you need to consider the lack of dividends and volatility decay, which can erode your position over time.

Another way to manage risk is to avoid strict doubling. Instead of a 2x multiplier, you could use something like 1.5x. This lowers returns but also reduces risk, and allows you to keep more cash available to diversify or extend your drawdown tolerance (e.g., handling 6 losses instead of 5).

There has only been one period in the last 9 years where I experienced an extended drawdown. This was during the COVID crash, when prices dropped very quickly. I ended up holding the position for just over a month before it hit my take profit. I didn’t even hold long enough to collect a dividend, although sometimes you’ll accidentally capture one if you enter near an ex-dividend date.

My system was designed for 7 consecutive losses. When I hit the 8th, I held the position and continued dollar-cost averaging when new signals appeared. I wasn’t using margin, so there were no margin-related risks. Essentially, I was buying a significant dip—about 25–30% off the highs—in a strong, long-term uptrending asset.

The idea is to use dividends, if necessary, to help dollar-cost average until the price eventually hits your take profit. This way, you’re getting paid to hold.

This strategy would not work well in futures, forex, or CFDs due to holding fees and the lack of dividends. It could work in crypto since there are no holding fees, but I personally don’t trust holding crypto long-term, and again, there are no dividends.

You could also focus on high-dividend stocks (5–10% yield), ideally monthly payers, so you can DCA faster than with quarterly dividends. The key is to focus on fundamentally strong assets—blue chips, mega caps like Google or Coca-Cola, or broad index ETFs. Avoid assets in long-term downtrends, even if they pay dividends. Also avoid commodity ETFs, as they can remain in drawdowns for years.

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Example Rules (Trading VOO Since 2018)

Using RSI (14) on a 15-minute chart with a 1.1:1 reward-to-risk:

Entry Rules:

1. RSI must go below 30 (oversold).

2. When RSI closes back above 30, enter the trade.

Stop Rules:

• Stop is based on the nearest swing low.

• I typically use the wick of the candle where RSI was below 30, but using the candle body produces similar results (test this yourself).

Take Profit Rules:

• Calculate the distance between entry and stop.

• Set take profit at 1.1x that distance (1.1:1 reward-to-risk).

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Position Sizing (Martingale)

Because each trade has a different stop distance, you’ll need to adjust share size accordingly. And because the share price changes from trade to trade it needs to be adjusted as well.

If your broker allows fractional shares, this is easier. If not, you can start small and scale:
1, 2, 4, 8, 16, etc.

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Conclusion

That’s it. You don’t need anything overly complicated to make money with this approach. The only real barriers are starting capital and an account.

If you have any questions, let me know in the comments or reach out on StockTwits: https://stocktwits.com/J2sun

And when you become a millionaire, let me know.

The 5-Step Process That Took Me From Failed Day Trader to Consistent Profits

I’ve been trading off and on from 1998 to 2016. I never took it that seriously, other than my retirement account investments, which were longer term. Mostly I just invested in the S&P 500 index. It’s done well because I simply dollar-cost averaged.

In 2016, I decided to get back into day trading. The first two times I tried it, I failed badly and blew up one futures account in the process.

From 2016 to midway through 2017—about 1.5 years later—I finally found consistency. From 2017 to 2020, or a little over four years, I had an average return of 132% on my account. That means I roughly 5x’d it in four years.

I retired in 2020 when COVID hit, and I still trade full-time to this day. I’ve made more than enough money for myself and will likely stop day trading soon. That being said, I enjoy it and find it fun and challenging—almost like a money game.

Anyway, this is the bigger-picture five-step plan I would say anyone needs to follow. Even if you are a fundamentals-only, longer-term investor, you still need to verify that your thesis is sound. How are you going to do that?

The nonsense of saying “not everything is quantifiable” is often just an excuse to be lazy. Some things are harder to quantify than others, to be sure—at least right now. Or maybe it’s just an excuse to avoid facing the cold, hard truth that you don’t know as much as you thought you did and that your plan really doesn’t work.

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Bigger Picture: 5-Step Process to Becoming a Successful Trader

Each step involves numerous smaller steps, but this will give you an overview of the process you’ll be involved in.

Keep in mind that learning about the markets never stops. It’s an ongoing process as markets change over time. You should allocate a portion of each day toward learning something new, or at least keeping up with current events. Patience is an asset here—there is no rushing this.

1. Find setups that work for your situation

Everyone trades differently. Your setups need to fit your personality, time availability, and risk tolerance.

2. Test your setups

a) Backtest first

Then move to small positions until you’ve proven the strategy works in forward testing.

• If the backtest looks good but the forward testing doesn’t fall in line, you need to address that before moving forward.

3. Scale up once the setup is verified

Once your setup has been verified with small positions, you can begin scaling up.

Every setup and instrument is different in how you approach this, so you’ll need to experiment to find the best method. It can vary from broker to broker and country to country depending on regulations and fee's.

Some of the most common ways to scale up include increasing position size, increasing leverage(using margin or a loan), leveraged etf's, or options.

4. Continuous monitoring of the setup

Your trading is based on your backtesting, so it’s critical to monitor performance.

Keep two things in mind:

1. The market is always changing.

2. The only way to maintain confidence in a system is to compare current performance with historical results.

Your backtests are your lifeline. They are everything.

You need to know the historical ranges for your setup:

• How many consecutive wins?

• How many consecutive losses?

• Typical drawdown periods?

These give you the tolerance ranges for the setup. Everything should continue normally unless one or more of those ranges are broken and something new appears. At that point, you need to reassess what’s happening and why.

5. Manage risk

This part is very simple: diversify.

Diversify across:

• Several setups

• Multiple markets

• Different market conditions

For example:

• Some setups may be trend-following.

• Others may be mean-reversion.

They will perform differently at different times, but both should be profitable over the long run.

You should also use software and tools to help you scale up—automation, EAs, or anything else that improves execution and efficiency.

A Proven Trend-Pullback Strategy for Consistent Forex Day Trading That Is Recommended By CHATGPT

 

There isn’t one “perfect” Forex day-trading strategy, but

the most consistently profitable for most traders is a combination of trend + pullback + strict risk control.

Here’s a proven, practical strategy many professional day traders use:

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✅ The Trend Pullback Strategy (High Probability Day Trading)

This works best on liquid pairs like:

• EUR/USD

• GBP/USD

• USD/JPY

• AUD/USD

And during London + New York sessions.

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📊 1. Chart Setup

Timeframes

• Trend: 15m or 30m

• Entry: 5m

Indicators

• 200 EMA (trend filter)

• 20 EMA (pullback zone)

• RSI (14) (momentum confirmation)

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📈 2. Identify the Trend

On 15m chart:

Bullish Trend

✔ Price above 200 EMA
✔ Higher highs & higher lows
✔ RSI > 50

Bearish Trend

✔ Price below 200 EMA
✔ Lower highs & lower lows
✔ RSI < 50

👉 Only trade with the trend.
(No counter-trend trades.)

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🔁 3. Wait for Pullback

On 5m chart:

In Uptrend

Wait for price to pull back to:

• 20 EMA

• Previous support

• Minor consolidation

In Downtrend

Wait for price to pull back to:

• 20 EMA

• Previous resistance

No pullback = No trade

Patience = profit.

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🎯 4. Entry Rules

BUY Setup (Uptrend)

Enter when:
✔ Price touches pullback zone
✔ Bullish candle forms (engulfing / strong close)
✔ RSI turns up from ~40–50

➡ Buy at candle close

SELL Setup (Downtrend)

Enter when:
✔ Price hits resistance
✔ Bearish candle forms
✔ RSI turns down from ~50–60

➡ Sell at candle close

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🛑 5. Stop Loss (Critical)

Always set SL.

Buy Trade

Stop = Below recent swing low

Sell Trade

Stop = Above recent swing high

Risk per trade:
👉 Max 1% of account

Example:
$10,000 account → Risk $100 per trade

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💰 6. Take Profit

Use 1:2 Risk/Reward minimum

If SL = 15 pips
TP = 30 pips+

Better method:

• TP1 at 1R (partial close)

• Let rest run to trend high/low

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⏰ 7. Best Trading Times

Only trade during high volume:

Best

✅ London Open (3–6 AM EST)
✅ New York Open (8–11 AM EST)

Avoid:
❌ Asian session (low volatility)
❌ Before major news

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📰 8. Avoid News Traps

Do NOT trade 15 min before/after:

• NFP

• CPI

• FOMC

• Interest rate decisions

These destroy day traders.

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📋 9. Simple Trading Checklist

Before every trade:

☐ Trend confirmed
☐ Pullback completed
☐ Entry candle valid
☐ Risk < 1%
☐ R:R ≥ 1:2

If any = No → Skip trade

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📉 10. Why This Strategy Works

✔ Trades with institutional flow
✔ Avoids chasing price
✔ High win rate (55–70% typical)
✔ Low drawdown
✔ Scalable

Most profitable traders use some variation of this.

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⚠️ Biggest Reason People Fail

Not strategy. It’s:

❌ Overtrading
❌ Revenge trading
❌ No stop loss
❌ Risking too much
❌ Trading boredom

Discipline > Strategy

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🏆 Bonus: Example Trade

EUR/USD uptrend

• Price above 200 EMA

• Pulls back to 20 EMA

• Bullish engulfing forms

• RSI = 52 → rising

Buy: 1.0820
SL: 1.0805 (15 pips)
TP: 1.0850 (30 pips)

R:R = 1:2

Repeat this setup daily.

How To Read Liquidity On A Chart And Beat Wall Street-Top 3 Trading Strategies

In a recent video on the YouTube channel "World class edge" 2× World Trading Champion Patrick Nill explained his strategies and theories on he was able to generate verified 100%+ per year.

The Top Three Wall Street Trading Strategies — And How Retail Traders Can Still Compete

What if an insider explained how trading really works on Wall Street?

Not the simplified stories about indicators or headlines—but the actual strategies used by professionals, hedge funds, and algorithmic desks to gain an edge in the markets. Understanding these methods doesn’t mean you can copy them directly, but it does allow you to follow the big money and trade with far more objectivity.

In this article, we break down the three most dominant strategies used on Wall Street today, drawing on insights from former Wall Street trader and scalper Serge Hoffman, and explain what retail traders can realistically learn—and use—from them.

How Trading on Wall Street Really Works Today

Modern markets are no longer driven by human reflexes. Speed, automation, and data dominate. Trades are executed in nanoseconds, powered by advanced algorithms and massive server infrastructure located as close as physically possible to exchange data centers.

Wall Street’s biggest advantage isn’t secret indicators—it’s technology and capital. Entire football fields of servers exist solely to shave milliseconds off execution times. Retail traders simply cannot compete at that level.

But that doesn’t mean retail traders are locked out.

What is possible is learning how to recognize the footprints of these strategies and position yourself accordingly.

Strategy #1: Market Making & High-Frequency Trading (HFT)

What It Is

Market making is the backbone of modern Wall Street trading. Algorithms constantly work both sides of the market—buying on the bid and selling on the ask—to provide liquidity and profit from tiny price differences.

Today, this is almost entirely handled by high-frequency trading (HFT) systems, executing thousands of trades per second. These algorithms manage order flow, absorb liquidity, and accelerate price movement when conditions are favorable.

Can Retail Traders Use This?

Not directly—but you can observe it.

By watching order books and price ladders, experienced traders can often spot:

• Liquidity absorption

• Sudden speed changes

• Aggressive bid/ask behavior

• Algorithmic “support” or “resistance”

When liquidity accelerates in one direction, price often follows quickly. Retail traders who recognize this can trade with the flow rather than against it.

The key insight:

Follow speed and liquidity, not opinions.

Strategy #2: Arbitrage

What It Is

Arbitrage exploits price discrepancies between different markets, exchanges, or routing paths. If an asset trades at slightly different prices in two places, algorithms buy low in one venue and sell high in another—often instantly.

This strategy is common in:

• Equities

• ETFs

• Crypto markets

Can Retail Traders Use This?

In traditional futures and equities, arbitrage is mostly algorithmic and inaccessible to retail traders due to speed limitations.

However, crypto markets still offer occasional arbitrage opportunities because:

• Exchanges are fragmented

• Liquidity varies

• Regulation is inconsistent

Some professional crypto traders still specialize exclusively in arbitrage, and under the right conditions, retail traders can participate—though competition has increased significantly.

Strategy #3: Order Flow & Micro-Scalping

What It Is

This is one of the most active and misunderstood strategies on Wall Street today.

Order flow scalping focuses on:

• Rapid bid/ask interaction

• Short bursts of algorithmic activity

• Temporary inefficiencies caused by event-driven execution

Rather than predicting direction, traders observe real-time behavior in the order book—how aggressively orders are filled, pulled, or flipped.

Certain strategies (like “flipping”) were once manual but are now fully automated. Still, algorithms leave patterns, especially during:

• News-driven events

• Illiquid periods

• Sudden volatility spikes

How Retail Traders Can Use It

In specific moments—particularly in thinner markets like currency futures—algorithms may rapidly fill both bids and asks. When this happens, skilled traders can:

• Place alternating limit orders

• Capture small, repeated profits

• Trade both sides of the market briefly

These opportunities don’t appear every day—but when they do, they can be highly profitable if recognized in real time.

Why Charts Alone Aren’t Enough

Wall Street does not trade purely on technical indicators or chart patterns.

Charts are used primarily to understand what already happened, not to forecast the future mechanically. Price movement is driven by:

• Execution

• Liquidity

• Decision-making events—not headlines themselves

News doesn’t move markets.
Decisions made because of news move markets.

This distinction is critical for short-term traders.

The Biggest Myth Retail Traders Believe

Many traders assume institutions like BlackRock “move the market” simply because reports say they’re positioned long or short.

The reality:

• Institutional data is often delayed

• Reports describe what already happened

• Intraday price movement depends on current execution, not long-term positioning

Smart traders trade what they see, not what they’re told.

How Retail Traders Can Compete (Realistically)

Retail traders don’t win by being faster or smarter than algorithms. They win by being:

• More selective

• More patient

• More objective

Successful traders combine:

• Subjective context (news, reports, expectations)

• Objective confirmation (order flow, liquidity, price behavior)

If liquidity isn’t present—don’t trade.
No liquidity, no opportunity.

The One Rule That Matters Most

At the end of the discussion, Serge Hoffman summed it up with one sentence:

“Read less. Observe more.”

The markets constantly reveal what’s happening—if you’re watching the right things.

Munehisa Homma Trading Strategy For Candlesticks

 

Munehisa Honma (1724–1803): The Father of Candlestick Charting

Munehisa Honma (本間 宗久), also known as Sokyu Honma, was a Japanese rice merchant and trader from Sakata who became one of the most influential figures in trading history. Active during the Tokugawa Shogunate, he traded on the Dōjima Rice Exchange in Osaka and is widely regarded as the inventor of the candlestick chart—a cornerstone of modern technical analysis.

Often called the “God of the Markets,” Honma was the first to systematically study price action and recognize recurring patterns in market behavior. In 1755, he published The Fountain of Gold – The Three Monkey Record of Money, one of the earliest known books on trading and market psychology. In today’s terms, his trading success is estimated to be equivalent to nearly $10 billion.

Around the early 1700s, Japan developed one of the world’s first futures markets for rice. Instead of trading only physical rice, merchants began using coupons that promised future delivery. This innovation created a secondary market where Honma thrived. According to legend, he even built a private communication network with messengers stationed every 6 kilometers between Sakata and Osaka—nearly 600 kilometers apart—to relay price information in real time.

Honma strongly believed that market psychology was just as important as supply and demand. He wrote that traders’ emotions drive price movements and famously stated, “When all are bearish, there is cause for prices to rise—and when all are bullish, prices will fall.” This insight laid the foundation for contrarian trading strategies still used today.

He also described market cycles in terms of Yang (bull markets) and Yin (bear markets), noting that each contains elements of the other. His trading decisions were influenced by price, volume, and even weather patterns.

Some historical sources credit Honma with authoring additional works, including:

• A Full Commentary on the Sakata Strategy

• Honma Sokyu — Tales of a Life Immersed in the Market

What made him successful?

Some believe it was his invention of candlesticks, but in reality, it was his ability to manipulate price and gain a competitive advantage through superior market data and news that gave him his greatest edge.

Are candlesticks useful? Can they give you an edge?

The short answer is yes—they can. But it depends on how they are used. Candlesticks don’t provide an edge in all situations. When used by themselves, with nothing else, they will likely produce a win rate below 50%. Considering that most trades are close to a 1:1 risk-to-reward ratio, this means you aren’t gaining any real edge.

1. At Key Levels (Support / Resistance)

A random doji in the middle of nowhere = useless
A pin bar at major support = very powerful

Context > pattern.

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2. For Timing Entries

Candlesticks are excellent for:

• entry precision

• risk control

• confirmation after a setup

Example:
You identify support → wait for bullish engulfing → enter with tight stop.

This is where pros use them.

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3. For Reading Order Flow Without Order Flow

Long wicks = rejection
Small bodies = indecision
Big bodies = control

It’s a visual tape.

Morning trade strategy? Trading Before 10 A.M. Might Be Why You’re Losing

The 10 a.m. rule in stock trading suggests waiting until around 10 a.m. (after the volatile first 30 minutes) to make significant trades, allowing the market to stabilize and reveal its true direction after initial reactions to overnight news. It isnt a law but rather a general rule of thumb. It isnt applicable to all setups as some are based around that first half hour.

Why Traders Use the 10 a.m. Rule

1) It Tames Early Volatility
The first 30 minutes of the session (9:30–10:00 a.m.) are often the wildest. Overnight news, earnings, and emotional opening orders collide, creating sharp, erratic moves. Waiting helps you avoid getting chopped up by this chaos.

2) It Clarifies the Real Direction
Early moves can be fake-outs. By letting the opening range form, traders can see whether price action is being supported or rejected, giving a clearer read on the day’s true bias.

3) It Filters Out “Dumb Money” Behavior
The old saying goes: smart money waits, dumb money rushes. Less experienced traders often pile in at the open, while institutions and seasoned traders wait for confirmation. The 10 a.m. rule helps you trade with patience—and with better information.

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How Traders Apply the 10 a.m. Rule (Example Strategy)

1) Watch the Opening Range
From 9:30 to 10:00 a.m., simply observe. Mark the high and low of this initial 30-minute window.

2) Wait for a Break
Once price moves above the opening high or below the opening low, shift to a lower timeframe (like a 5-minute chart) to look for a clean breakout.

3) Enter on Confirmation
Enter only after a candle closes in the direction of the breakout. Many traders fine-tune entries using tools like fair value gaps, then set a defined stop-loss and profit target.

How To Become A Good Loser In Trading

No matter how small a trading loss might be, when it happens, it hurts.

First, there’s the immediate pain of seeing your account take a hit. That alone is unpleasant enough. But it’s quickly followed by frustration—the trade didn’t work out the way you planned. Sometimes that’s unavoidable. Black swan events can derail even the best setups.

Other times, with the benefit of hindsight, you can clearly see where you went wrong. And that realization can be just as painful.

Either way, losing trades are simply part of trading.

If you want to be a successful—and sane—trader, you must learn how to manage losses properly. That’s why risk management is so fundamentally important, and why we’re digging deeper into it here.

In the first instalment of this risk series, we looked at how the world’s best traders begin with a loss-minimisation mindset.

Instead of asking, “How much can I make?”

They ask, “How much can I lose?”

That subtle shift in thinking offers powerful protection in the markets. Sometimes, the best position you can take is no position at all.

But when the right setup does appear, you need a clear plan for managing risk once you’re in the trade. That’s where things get more technical.

Playing the Percentages

One of the most common mistakes new traders make is risking far too much on a single trade.

Some don’t even know how much they’re risking.

Others set a stop loss—but still expose a huge percentage of their account without realising it.

So what should you do?

First, always use a stop loss. Every trade, no exceptions.

This allows you to calculate exactly how many points you could lose.

That’s a good start—but it’s not enough.

You also need to decide what percentage of your account you’re willing to risk on any single trade.

Many beginners simply choose a stake that “feels reasonable”—say £15 per point. That sounds fine until you do the maths.

If your stop loss is 50 points, you’re risking £750.

On a £10,000 account, that’s 7.5% on one trade.

You may be comfortable with that, but it’s extremely aggressive. Most professional traders risk just 1–2% per trade.

Here’s how to calculate it properly:

Account size: £10,000

Risk per trade (2%): £200

Stop loss: 50 points

£200 ÷ 50 = £4 per point

So instead of trading at £15 per point, a sensible position size would be £4.

Now, let’s say the trade wins and you make £356.

Your account is now £10,356.

2% risk = £207.12

Same 50-point stop loss

£207.12 ÷ 50 = £4.12 per point

Each trade is recalculated based on your current account size.

Yes, this approach grows your account more slowly than oversized bets—but it dramatically improves your chances of staying in the game long enough to succeed.

Keeping Risk in Check

Over time, if you’re following a profitable strategy, your account will grow. Eventually, your 2% risk might translate into a position size that feels uncomfortable.

For example, you might be fine risking £20 per trade—but not £40.

That’s completely personal. Risk tolerance varies from trader to trader.

What matters most is that you understand risk, and that your position size always makes sense relative to your trading capital.

Trade too big, and a few losing trades—inevitable in any strategy—can quickly put you in serious trouble.

In the next instalment of this risk series, we’ll take a closer look at stop losses themselves, and why effective risk management requires learning from your losing trades.

In the meantime, risk management is something I cover in far greater depth during my free online training sessions each week.

5 Stocks to BUY in March/April 2025

Mar10 2025 430pm

In the beginning of March we are still in a downturn, which could mean a good buying season in March/April. Here to break down five stocks he's looking to buy in March is Trading Post's analyst, Jason Wade

Today the S&P closed below the 200sma, a common technical level used by institutions. The threat of an escalating tariff war has investors being cautious. We've clearly had a sharp sell off since the beginning of February but it isnt all bearish. There's always a risk of it going deeper, but if President Trump was to come out and cease tariffs the market would rally. If the CPI print this week is bullish it could be a trigger for buyers also

I would expect to see the market trend sideways within this range if not bounce higher and potentially set a new all-time high by early to mid-spring.

The seasonality of the index's also usually hits a low around the end of february then rallies in late mar

1)NVDA Nvidia just had another great ER. Keeping inline with its previous ER's though its sold off just after it was released. It's likely from the unwinding of speculative positions.

This presents longerterm investors an entry point

Its hard to find an analyst that doesn't have something good to say about it. They're raising price targets leading to new all-time highs. A major growth kicker the analysts are talking about is the strength in the automotive segment. Its still small right now but  analysts are predicting it could become their next billion-dollar business, supported by robotics, driver assist, and autonomous vehicles.

2)CRM -Salesforce just had a good ER also.  Yet its stock price pulled back a little bit. That was because of the guidance. But the takeaway from the analyst chatter is that the company is being cautious—and prudently so—in the scaling of its new technologies.

 It has really robust cash flow that's driving some significant capital returns. 

The analysts are bullish. They did trim their price targets, but the range of targets is narrowing around the consensus, which is looking for a double-digit upside.

3)MMM-3m was a dividend king that's been dethroned. It had to cut its dividend to mitigate the impacts of some legal issues. Those legal issues are behind it now. Dividend increases are back on the table. Share repurchases are back on the table. Organic business is growing. The guidance is very robust. The stock is coming back very strongly.

Right now technically it looks very strong espeically in how its perfoemed agins the majority of the market

4)SOUN-SoundHound.got a really big boost last year as the AI wave was coming into play. The stock price pulled back, and then it pulled back even more sharply when Nvidia announced it had sold out of its stake.

So that's kind of a shock to investor sentiment. But if you look back and see that Nvidia made more than 100% gains in under a year, it's pretty easy to understand why they would sell.

That aside, the fundamentals are unchanged. The company is looking at a period of hypergrowth—growing at nearly 100% pace for the next few quarters, if not for the next two years.

Its currently consolidating around 8.50 Technically I'm watching 7.25 for a bounce if it breaks below this level.

5)SHOP-Shopify. It is the most upgraded stock from February. That’s because of outperformance and better-than-expected guidance.

Right now technically its still above the 200daily sma and is close to completeing a gap fill.An excellent opportunity for longer term investors.

A List Of 10 Free Backtesting Options

 MetaTrader 4/5 (MT4/MT5): These are popular trading platforms that offer built-in backtesting functionalities. Many brokers provide these platforms, and they often come with historical data for backtesting.

Forex Tester: While Forex Tester isn't entirely free, it does offer a free demo version with limited features. This allows you to test its capabilities before purchasing the full version.

TradingView: TradingView is a widely-used platform that provides a powerful charting tool. They offer some backtesting capabilities, and you can use it for free with limitations, or subscribe for more advanced features.

ProRealTime: This platform offers a free version with limited features, including backtesting capabilities. It's known for its advanced charting tools.

ZuluTrade: ZuluTrade is a social trading platform that allows you to follow and copy the trades of professional traders. It also offers a basic backtesting feature.

QuantConnect: QuantConnect is a platform that provides a cloud-based algorithmic trading engine. They offer a free community version which includes backtesting capabilities.

Myfxbook: While primarily known for its social trading network, Myfxbook also provides some basic backtesting functionality.

TradingSim: This platform offers a free version with limited features. It provides a simulation environment for backtesting trading strategies.

NinjaTrader: NinjaTrader provides a free version of their platform that includes basic backtesting features. It's more advanced than some other free options but still has limitations.

Python with Backtrader or Zipline: If you have some programming knowledge, you can use Python with libraries like Backtrader or Zipline for backtesting. These libraries are open-source and offer a lot of flexibility.

The Best Stochastic Settings For 1 Minute Chart-Best Settings For Scalping

I have been working with, using consistently and have done literally 1000's of back-tests with the various stochastic indicators over the years. The basic stochastic indicator/oscillator is what I will be focusing on. If you've seen or heard of a stochastic indicator then likely its the basic "stochastic oscillator" indicator since its available on most trading platforms by default. There are others however like the stochastic momentum index, and stochastic rsi . I will be focusing on the stochastic oscillator in the back-tests below.

I have done a lot of testing with it on various time frames, with various settings and paired it with other indicators and strategies. I have mostly tested it on the 1 minute chart, 5 minute, and 15 min charts since I'm a day trader primarily.

Everybody that has traded on lower time frames charts like the 1 minute knows that its far more volatile and prone to flash movements around some news event but it also depends on the time of the day and day of the week even. The same news event during the Asian session vs the new York/Euro overlap session will have quite a different impact on the market simply because of the differences in volume. Most indicators lose their effectiveness on lower time frames.

You also need to take into account the instrument you will be trading. Some are well known to be far more volatile than the others. I trade the Forex, crypto, stock and futures markets on a daily basis. Primarily the futures however more than anything else and specifically the NQ index has been my main go-to. I will doing a rundown of some of the best bask-tests/setups I have found so far on the 1 minute charts. I have actually done far more but they performed poorly so I won't bother showing them.

If you read through this entire article I promise you that you will come away with something you can apply immediately to help you become more profitable assuming that these setups perform better than yours.  

How the stochastic oscillator works 

So a quick rundown on how this works. You need to understand the weaknesses and strengths of each indicator you use. This will help you either decide when to use it, how to use it in relation to another indicator to just avoid using it at all. I wont be going into great depth into the math behind it as that would take an entire article just for that alone. But rather just to give you an overview and get right into how to use it. There is a link to Investopedia that goes into far greater detail at the bottom of the article under resources if you wish to learn more about this indicator in detail. 

If you've use this then you know its a non-painting indicator which necessary to know to start off with. Its very common and easy to find on most charting platforms so the accessibility means you wont have to pay for any add-ons which is a bonus. Its a range-bound momentum based indicator. Generally most traders think of it as a momentum based indicator which are usually seen as being best at choppy markets-sideways markets and  not as good at trending markets. Usually most traders use in 2 ways with standard settings.

1) Watching for divergence points ( these don't happen as often as OB/OS situations)

2) Watch for overbought situations( above 80) or oversold situations (below 20)

Both can be useful but you have to take into accounts other factors like any other indicators you are using and exit strategies both for taking profit and loss.

If you adjust the settings however you can use it other ways as well.

I will be going through the best stochastics settings for a 1 minute chart on 3 different setups with different settings for the stochastic oscillator. For each setting I'm doing 4 tests so that's a total of 12 back-tests. I have included a spreadsheet showing how the backtests performed against each other and which was the best as well as a list of all trades taken in the backtests just to prove to you that these tests are legitimate. There is a growing trend of wanna-be gurus out there claiming things but have no evidence to back it up. I'm not doing that here. I don't make any claims that we cannot 100% back up with hard data as evidence. Everything we do here is data driven. Anything else is really just wishful thinking. Every strategy listed below was back-tested on the following instruments. NQ, gold, BTC/USD, EURUSD, TSLA, JNJ. 

Reasons why those were chosen

NQ-Most commonly traded  futures index besides ES. Its also commonly traded in the stock market

Gold-Most commonly traded futures product

BTCUSD- Most commonly traded cypto

EURUSD- Most commonly traded

TSLA- Most commonly trade high beta company

JNJ- =Most commonly trade low beta company 

How I conduct backtests is to make sure that we have at least 100 trades although more is better and those trades have to be over multiple( at least 2) periods or more of bullish trends, bearish trends and sideways choppiness. That way you will find out where it works best and worst and hopefully improve your usage of it going forward.

Strategy 1 Rules

Settings 

-14,3,1

Entry rules

-daily + 15min strategy long trade

-look at daily and see if stochastic if the k% is below 20 

-on the daily when it the d& and k% crosses above the 20 line go to 15min 

-now on the 15min wait for the d to cross the 20 as well 

-once it crossed above you will now look for a 3 candle pattern on 15min

-enter on the candle close of the last candle in the 3 candle pattern  

Exit loss?

Exit tp?

Strategy 2 Rules

Settings 

stoch setting is 5,5,5, and the 2 ema's  are 150/50 entry

Entry

-emas show trend. For a long trade wait for the 50 to be above the 150. And for short positions the 50 must be below the 150. The price needs to be on around the 150 or between the 50 and 150 for an entry 

-Now you wait for the stochastic to cross down from overbought or cross up from oversold price

-One other additional criteria. The price action must also not break previous low if going long or previous high if going short. This will ensure the trend is still continuing and not coming to an end.(it should be making new highs or lows if going long and new lows if going lower)

-once the price crosses the 50ema you enter in the direction of the trend on a break above that high in the price action

Exit stop

-stop just above recent swing high or low by a few pips

Exit Tp 

-1.5-1 reward to risk

Strategy 3 Rules

Settings

-stoch 14,3,3 

-macd -remove histogram 14 with ma standard setting volume ma set to 30

Entry

-need all 3+ vol above ma to go long or short 

Exit Tp 1.5-1 reward to risk

Exit Stop -recent swing low

Which one performed the best?

The winner for each instrument is listed below which was based on reduced draw-down and total return was strategy #2. 

NQ  - The best performing one was strategy #2 which had 231 wins 164 losses which = a 71% win rate 

Gold- The best performing one was strategy #2 which had 157 wins 

BTC/USD- Strategy #3 was the best 

EURUSD- The best was strategy #2 which had 

TSLA- Strategy #3 was the best 

JNJ - Strategy #1 was the best - This barely beat out #2

The strategy that performed the best across all 5 instruments 

Strategy #2 was the one that performed the best on the most of them however you may notice that strategy #3 seemed to perform better on higher volatility instruments. Even though strategy #2 performed the best it did not massively outperforms the other 2. It was actually very close and really using all 3 strategies and just managing your risk you could easily make $$ consistently using any of them as their win rates were all at least 60%+ Considering that the R/R ratio was at least 1.5-1 that makes it very worthy of more testing imo.

If you are interested in seeing a list of trades for these back-tests give me a comment below and ill publish the link to the pdf.

Link to Investopedia on the Stochastic indicator

Larry Williams Trading Strategy. 100% Win Rate-So far

This Simple Forex Strategy Has a 100% Win Rate (So Far)

Back in 2021, I created a trading strategy built around specific market conditions and a concept I learned from Larry Williams. I later shared the full development process on my YouTube channel.

Since then, the results have been impressive.

Every trade the strategy has taken since its release has been profitable — although it’s important to note that it doesn’t trade very often. In fact, it has only produced 10 trades since October 2021, but all 10 were winners.

While a larger sample size would be more statistically significant, the performance has been strong enough that it’s worth revisiting.

Below are the rules, results, and updated performance data.

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Strategy Overview

This strategy trades the USD/CAD pair on the daily chart and looks for three specific conditions before entering a trade.

Entry Rules

A trade is triggered when all of the following occur:

1. It is Trading Day 8 of the month.

2. The current close is lower than the close five days ago.

3. The Williams %R oscillator (14 period) is slightly oversold — below the midline.

When these conditions align, the strategy buys at the open of the next bar.

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Exit Rules

The strategy uses two exit conditions:

• Stop Loss: 350 pips (fixed).

• Profit Exit:

  • Hold the trade for at least 7 days.

  • After 7 days, exit on the first profitable close.

This means every trade stays open for a minimum of one week before it can be closed.

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How the Strategy Was Developed

During development, three key components were optimized:

• The best trading day of the month

• The delay before exiting profitable trades

• The optimal stop-loss level

After testing multiple variations, the following settings produced the strongest results:

• Trading Day: 8

• Profit delay: 7 days

• Stop loss: 350 pips

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Performance Results

Recent Data (Oct 2021 – July 2023)

Since the strategy was released:

• 10 trades

• 10 winners

• 100% win rate

• Average trade: $1,491 (1 lot)

• Includes approximately $40 per trade in costs

The equity curve shows consistent growth, with every trade closing in profit.

It’s also worth noting that this is a long-only strategy, meaning it only buys.

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Out-of-Sample Data (2018 – 2023)

When tested on data that was not used during development, the results were still strong:

• 27 trades

• 26 winners

• 96% win rate

• Average trade: $906

• Largest loss: 350-pip stop loss

Interestingly, during this period the USD/CAD market moved mostly sideways, showing that the strategy’s edge isn’t simply due to a long-term uptrend.

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Full Backtest (2008 – 2023)

Using the entire dataset:

• 77 trades

• 5 losses

• 93.5% win rate

• Average trade: $765

The strategy performed well across different market conditions — including both rising and falling markets.

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Why There’s No Short Side

During testing, I attempted to build a short-selling version of the strategy.

However, I couldn’t find a reliable edge using the same “trading day of the month” concept on the short side. While it would be ideal to have both long and short signals, the long strategy alone has produced strong results.

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A Key Lesson: The Watch Period

Not every strategy makes it into my live trading portfolio.

After developing a strategy, I always put it through a watch period lasting several months. During that time, I monitor performance without trading it live.

Only strategies that continue to meet strict criteria make the cut.

Fortunately, this one did.

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Final Thoughts

This trading-day-of-the-month strategy has continued to perform well years after its release. While the trade frequency is low, the consistency has been notable.

More importantly, it demonstrates that calendar-based market patterns — when tested properly — can provide a real edge rather than just curve-fitting.

For traders looking to explore rule-based strategies, this approach may be worth testing further.

Forex trading setup with a 100% win rate so far

 

(video will play at bottom of page)

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