70% Win Rate MACD + Parabolic SAR + 200 EMA Trading Strategy (Proven 100 Trades)

[00:03] a high win rate and later in the video i'm going to show you proof of it having a high win rate by backtesting the strategy 100 times so without further ado let's get on with the video

[00:18] so for this strategy we're going to use a combination of three different indicators the 200 ema parabolic sar the 200 ema parabolic sar and the macd indicator so first

[00:31] let's start with the macd because that will give us our main entry signal trading indicator that does a very good job of detecting for the settings i'm going to leave it as it is and just use the default

[00:46] so as you can see the indicator consists of three parts first we have the blue line which is called the macd line this line moves faster and is more sensitive to price changes which will be

[00:58] the main focus of the macd indicator next we have the orange line or also known as the signal line this line reacts slower to price changes and is mainly used to filter out market noises

[01:11] and finally we have the histogram which simply shows the correlation between the macd line and the signal line for example if the line crosses above the signal line the histogram will turn green and if it

[01:24] crosses below the histogram will turn red the gap line also affects the size of the histogram the histogram will grow longer and if the gap is tight

[01:38] technically you could still utilize the macd without however i prefer to just keep it because there are times where it's actually quite useful like in this example here we can see

[01:52] over however because the lines are too close we can't really see what's going on so instead of looking at the lines you can just look at the color of the histogram to see which direction did the

[02:06] line crossed over now a common way of trading the macd is long positions if the macd line crosses above the signal line and taking short positions if the macd line crosses below the signal line

[02:20] however for this combination strategy we're going to add an extra layer of which brings us to the second indicator for the strategy for the strategy which is the parabolic sar the parabolic

[02:32] to learn indicator that does the market and for the settings i'll also leave it settings now right off the bat we can clearly see

[02:46] dots and the way we utilize them is very simple if the dots are below the candle it indicates that the market is on an and if the dots are above it indicates that the market is on a downtrend

[03:01] now a common way of trading the parabolics are is by simply taking long candle and taking short positions when the dots are above the candle however using the strategy this way

[03:14] actually results in a very low win rate because remember markets aren't always it can also move within a range like this and notice the parabolic sar isn't really performing well on a sideways market

[03:27] it gave many false signals all the traits that i'm currently showing you in the screen ends up being a loss and that is why for we're not taking long or short positions based on the dots alone

[03:40] confirmation and making sure that we're trading within the same direction of the trend which is the 200 period exponential moving average or the 200

[03:53] ema for short so for this strategy we're going to use direction if the price is above the 200 ema it uptrend so we only take long positions and if the price is below

[04:10] it indicates that the market is on a downtrend so we only take short positions and so we have discovered all the three indicators that we're going to be using so now this is how you trade the full

[04:23] strategy so let's start with long positions the is you need to make sure that the price is above the 200 ema the next thing you need to see is the macd line crossing above the signal line

[04:37] while the parabolic sar is positioned below the candle like this and so this will be your long entry next for your exit strategy you want to place your stop loss at the parabolic sar

[04:49] and set your profit target at one to one risk ratio and as you can see our profit target ended up hitting this candle right over here now the next possible entry signal comes

[05:02] up shortly after that we have a crossover upwards on the macd while the price is above the 200 ema however as you can see here when the crossover happened the parabolic star is still above the

[05:15] candle which is not what we want we want this to be below the candle and so for situations like this what we do is candle which is here while making sure that the

[05:28] macd is still crossing upwards and so this will be our long entry signal and again for your stop loss place it at the and set your profit target at one to one risk ratio

[05:40] and as you can see this one is another profitable trade next we spotted another long entry right we have a cross up on the macd while the parabolic sar is below the candle

[05:54] parabolic sar and profit target at one to one risk ratio and so this one ends up hitting this candle right here now let's get into some short examples

[06:08] alright so as you can see this candle closed below the 200 ema entries next we saw a cross down on the macd while are is above the candle and so we can place a short position right here

[06:23] parabolic sar and set your profit target at one to one risk ratio and so this one is another profitable trade and right over here we spotted another

[06:37] cross down on the macd then you look at the position of the dot it's above the candle which means this will be another valid short entry next place your stop loss and profit target and as you can see

[06:51] right over here so that's enough examples let's get straight into the 100 test for this back test i'm going to trade the euro usd 30 minute time frame with a starting capital of one thousand

[07:05] dollars and for our money management we are risking two percent over total and for each trade we're using 200 times leverage leverage so without further ado let's start back

[07:41] strategy 100 times the results are in it took us 106 days to reach 100 trades and out of that 100 trades we received a very good win rate of 69 our most wins in a row was 7 and our

[07:56] most losses in row was only three and in total we made a profit of five hundred and ten dollars and twenty seven cents which equates to overall gain of our one thousand dollar

[08:08] and remember we got this result by risking only two percent over total if you want to risk more capital portrayed to get larger returns you can change it to three percent four percent or even five percent per trade

[08:22] and also in this back test i only traded it on one currency pair the euro usd that's why it took 106 days to reach 100 trades shorter period of time you can just trade it on multiple pairs

[08:39] now while back testing i discovered a couple of tips that you can implement to further increase the win rate for the strategy and one of them explain so normally if you took a position

[08:53] of the parabolic sar however in this particular trade you can see that the position of the dot is too far from the price therefore if you decided to place your stop loss here your risk will be too large and if the

[09:08] trade ended up hitting the stop loss it will give you a massive loss and that is why i recommend limiting your stop loss to only 0.7 so no matter how far the parabolic sar is your stop-loss will never exceed

[09:22] 0.7 however by doing this you will also limit your upside potential so it's really up to you depending on your risk tolerance and remember i only tested this strategy using one settings if you want to

[09:36] optimize this strategy further you can backtest it yourself using works best for you so i just revealed to you a simple high win rate strategy that you can immediately use right now

[09:49] and all i ask for in return is for you to invest two seconds of your and subscribe to the channel it literally takes only two clicks but it means so much to me and you can also check out my other videos as well

[10:02] so thank you guys for watching and i'll see you in the next video