馃攳
I TESTED Hedging Trading Strategy with an EA | Scalping Trading Strategy | 100% Win Rate Strategy - YouTube
Channel: Trading Strategy Testing
[0]
last time we made a video where we
[2]
traded forex using a hedging strategy
[4]
that we purchased from some forex
[5]
trading guru who claims that it works
[7]
all the time back then we used it to
[9]
trade forex and we've made some profit i
[12]
was extremely skeptical about it but as
[14]
usual the best way to know whether a
[16]
trading strategy is successful or not is
[18]
back testing and that's what we're going
[20]
to do today using an expert advisor to
[23]
get the most accurate results with that
[25]
being said let's get into it
[29]
[Music]
[38]
as usual we'll begin by describing this
[40]
strategy with some examples then back
[43]
test it and finally analyze the results
[45]
there are plenty of so-called forex
[47]
gurus who are selling strategies and
[49]
signals but it's important to be
[51]
skeptical all the time
[53]
i mean if you find a strategy that works
[55]
all the time would you share it with
[57]
others
[58]
i'll let you think about it
[60]
so hedging is a strategy used to protect
[62]
one's position in a currency pair from
[64]
an adverse move
[66]
it's typically a form of short-term
[68]
protection when a trader is concerned
[69]
about news or an event triggering
[71]
volatility in currency markets
[74]
hedging in the forex market is the
[76]
process of protecting a position in a
[78]
currency pair from the risk of losses
[80]
there are two types of hedging direct
[83]
and indirect
[84]
the direct hedging strategy consists of
[86]
taking a position opposite in the same
[89]
currency pair
[90]
for instance if an investor goes long on
[93]
euro usd they short the same amount
[96]
while waiting for the trend to develop
[98]
once developed the trader begins
[100]
reducing the volume of the losing
[102]
position and increases the volume
[103]
towards the direction of the trend
[105]
and that's pretty much what we'll be
[107]
doing today
[108]
the second method is known as indirect
[110]
hedging strategy which is similar to the
[112]
first method except that you trade two
[114]
currency pairs with a strong negative
[116]
correlation
[118]
let's say you go long on the aussie
[119]
dollar and short on gold which will
[121]
allow you to reduce the risk of high
[123]
market volatility this is an interesting
[125]
strategy that we'll discuss soon on this
[127]
channel
[128]
with that out of the way let's review
[130]
the hedging strategy again
[133]
we first choose a currency pair with
[134]
high volatility
[136]
then we place two pending buy and sell
[138]
stop orders which are 10 pips away from
[140]
each other we'll aim for 150 pips profit
[143]
in both cases
[144]
let's say if the buy stop order is
[146]
triggered and the price continues its
[148]
uptrend and hits the take profit we
[151]
close all the orders and exit the market
[153]
but what happens if the buy order is
[155]
triggered and the price goes down
[158]
in this case we update the volume size
[160]
of the sell stop order so if the second
[162]
take profit is hit we close the two
[164]
orders and exit with profit
[167]
to sum up we'll be opening orders in
[169]
both directions with a higher volume
[171]
each time until we exit the whole setup
[173]
with a profit the expert advisor will
[175]
calculate and update the volumes
[177]
automatically
[178]
to make this feasible we're going to use
[181]
our recommended low spread broker
[183]
i'll leave a link in the description for
[185]
those who are looking for a tier 1
[187]
regulated forex broker
[189]
other than that to avoid rollovers we
[191]
can choose a pair with a positive swap
[193]
or simply close our positions before the
[195]
end of the trading day
[197]
in the previous two videos we've tested
[200]
the strategy in live market conditions
[202]
and exited with some profit
[204]
but today we'll be using an expert
[206]
advisor which will give us more accurate
[208]
results
[211]
this is our expert advisor we'll begin
[213]
with the euro usd pair the time frame
[216]
doesn't matter here as this hedging
[218]
trading strategy is price based for the
[220]
time interval i'm going to choose one
[222]
year regarding the initial balance let's
[225]
use one thousand dollars
[228]
regarding the other settings we'll
[230]
adjust them according to the strategy we
[232]
discussed earlier
[234]
i'm thinking to try this strategy during
[236]
the asian market which is considered the
[237]
prime time of the day though it's
[239]
frequently ignored as it's not volatile
[242]
and liquid compared to other significant
[243]
trading sessions its unique
[245]
characteristics tend to attract scalpers
[248]
we'll run this strategy 24 7 this time
[251]
let me know in the comments section if
[252]
you're interested in any specific market
[254]
session
[256]
let's double check everything again then
[258]
hit on start the process would take a
[260]
couple of minutes
[262]
while waiting don't forget to subscribe
[264]
if this is your first time here and hit
[266]
on the thumbs up for the youtube
[267]
algorithm
[270]
hedging is a very sophisticated trading
[272]
strategy that can make you a successful
[274]
trader if you master it the rest is all
[276]
about protecting your initial balance
[278]
the hedging trading strategy we are
[280]
reviewing today is extremely basic and
[283]
it doesn't take into consideration
[284]
elements such as fundamentals which is a
[286]
factor that has strong importance in
[288]
forex trading
[290]
we demonstrated that when we back tested
[291]
the so-called 100 no loss trading
[294]
strategy
[295]
you can always submit your trading
[297]
strategy if you want us to give it a
[298]
shot
[299]
we'll either trade it manually or use an
[301]
expert advisor
[303]
let's look at the results now
[305]
we can see that we've lost a big portion
[307]
of our initial balance we recorded a
[309]
significant drop in terms of equity in
[311]
these two periods
[313]
by looking at this graph we can also
[315]
notice that the successful trades didn't
[317]
contribute much in covering the losing
[318]
ones
[320]
right after this we'll redo the same
[322]
test with an increased take profit level
[324]
to compare the final results
[326]
we've had a total of 536 trades and the
[329]
drawdown is 19.36 percent which is high
[333]
actually but we can notice that the
[335]
success rate is 67.35
[338]
the number of successful trades is
[339]
higher than the losing ones
[341]
this confirms what we noticed earlier
[343]
when we saw the equity graph
[345]
what if we do another round of back
[347]
testing but instead of aiming for a 15
[349]
pips take profit we'll opt for a higher
[351]
risk to reward ratio this time
[354]
we'll position our take profit level 60
[356]
pips away from the entry
[358]
let's make the necessary changes to the
[360]
expert advisor settings and run the back
[362]
testing process again the other
[364]
preferences remain the same
[367]
once done we can hit on start
[369]
it's important to backtest any strategy
[371]
multiple times using different settings
[373]
the most crucial element for any trading
[375]
strategy is protecting your trading
[377]
capital
[379]
saving enough money to fund a trading
[381]
account takes a great deal of time and
[382]
effort
[383]
it can be even more difficult if you
[385]
have to do it twice
[387]
it's necessary to note that protecting
[389]
your trading capital is not synonymous
[391]
with never experiencing a losing trade
[393]
all traders have losing positions
[395]
protecting capital entails not taking
[397]
unnecessary risks and doing everything
[400]
you can to preserve your trading account
[403]
great we've just completed the process
[405]
we can see that we didn't lose our
[407]
balance this time
[408]
when we check the graph section we can
[410]
find two lines
[411]
the blue one represents the real time
[413]
balance and the green is for the actual
[415]
balance when you're back testing a
[417]
strategy it's important to monitor the
[419]
real time balance
[421]
we can see that we ended up making some
[423]
profit at the end of the day
[425]
we can notice an important drawdown here
[427]
where the real-time balance dropped by
[429]
50 percent
[430]
but the hedging strategy was able to put
[432]
us on track again and we exited the
[434]
setup with some profit
[438]
the total number of trades this time is
[440]
156
[442]
the success rate is 56.41
[445]
the drawdown is almost 25 percent which
[447]
is extremely high and the number of
[449]
winning trades is higher than the losing
[451]
ones
[452]
we've made a profit of 110 dollars and
[454]
grew our trading account by 11
[457]
the successful trades were able to
[459]
compensate for the amount of money lost
[461]
in the losing ones
[462]
but does that make it a safe trading
[464]
strategy
[465]
choosing the wrong broker or forex pair
[467]
could make this strategy extremely risky
[470]
but if we're stuck in a never-ending
[472]
consolidation phase that will consume a
[474]
big portion of our capital and we might
[476]
end up in a situation where we don't
[478]
have enough balance to open new trades
[481]
i believe that this strategy is a bit
[482]
risky but it will perform perfectly in a
[485]
trending market let's say during the
[487]
london or new york market opening
[489]
what do you think about this strategy
[491]
let us know in the comments section
[493]
at this stage it's important to review
[495]
the losing trades to evaluate the true
[497]
potential of this strategy and that's
[499]
what we're going to do next
[501]
happy trading
[519]
you
Most Recent Videos:
You can go back to the homepage right here: Homepage