Transcript
Use with ChatGPT / Claude Auto-scroll A
The speaker introduces a new lower-timeframe scalping strategy and explains why he wants to test it. He also gives channel updates and invites viewers to engage before moving to the chart.
This scalping trading strategy might get me into trouble.So, let's get straight to it.
Hey traders, I hope you're all going extremely well.My name is David and welcome back to my channel where I go through trading strategies.Today, we're going to be looking at a trading strategy that I've kind of put together to be able to scalp on much lower time frames.I'm looking at the 15 5-minute time frame.Never had much success with even lower than that.I'm going to be back testing it and deep back testing it as far as I possibly can for to see how it would work on previous data.I'm going to go through all of the indicators.Now, the reason I'm doing this today is I've been watching Joel on Crypto which was an old time favorite of mine YouTube channel.He's been scalping a lot recently and been extremely successful.So, I'm going to be trying to build a couple of scalping strategies here on David Tech.
I'm going to start soft on the 15-minute time frame, trying to get in and out with a small amount of profit with an even smaller stop loss, and taking several entries every day.So, if that sounds something that you might enjoy, if I could just ask you a very quick favor.If you don't mind giving a good old thumbs up to the video if you enjoy the video, and don't forget to subscribe.I do videos every Monday and Friday.Don't you forget, guys, you can also add all of my trading strategies through Patreon.The links are down in the description below.And if you have a favorite indicator that you absolutely love and you would like me to back test it, stick it down in the comments below.Don't forget I give away 100 USDT to a lucky winner, random comment, every Friday.So, without further ado, I'm going to get over to my screen.
Let's have a look at this trading strategy.
He opens TradingView and explains the NNFX-style framework for building rule-based strategies. Then he adds the VIDYA trend line and QQE indicator, describing how they signal long and short entries.
Okay, here we are on TradingView.I'm on BTC USDT on the 15-minute time frame using data from Bybit.I'm I'm to be adding three indicators here using the N N F X trading system.If you don't know what the N N F X trading system is, it's a system where we're using indicators and rules for all of our entries, making sure that we take 100% of all of our entries.This means that we can backtest using the TradingView backtester to make sure that our trading strategy actually worked on historical data.We use one indicator for trend direction, another indicator to confirm our entry.We use other indicators as well for volume and volatility.And then we have an indicator for our stop loss and one maybe if it's not the same one, we may be using another indicator also for our exit.Might sound complicated, but once all put together in a plan, it makes our trading lives much easier and helps us to deal with things like emotion and things like that.
Most important thing is we can actually automate this, connect it to bots and leave our trading system to trade automatically.We can also incubate to make sure that we're trading journaling all of our trades, which makes it absolutely brilliant for a full trading system.Okay, let's get over back over and let's start adding these indicators.Okay, this plan was given to me by Chat GPT as always.I have shown how I've done this.I have actually fine-tuned a Chat GPT to help me with these trading plans.So, first indicator that we're going to actually adding is the V I So, it's the V I D Y A and it's the V I D A trend by David Tech here.This indicator puts a line on our chart.I'm going to make it a little bit thicker so that we can see it here on YouTube.
Boom, et voila.Okay, so we're going to be using this for our trend direction.We're going to be looking to take longs whilst price is above the V I and it is green.We're going to be looking for We're going to be looking for shorts when the line is red and we are below the actual well, action is below the red line.So, that is our trend direction and the first rule in our N and FX plan.Okay, the second indicator we're going to be adding is the QQE.That stands for the Quantitative Qualitative Estimation.We're going to be using the one by David Tech just here.If you scroll down, you'll be able to find it in the list at David Tech.So, I'm going to add that directly to our charts here.Oops, I've added two.There we go.This is the Quantitative Qualitative Estimation indicator that I've built.
Made it a little bit easier than the histogram one to understand.We have a oversold area, meaning price is cheap and we want to get in there.Then we have an overbought area, which is here, which we're looking for shorts.As you can see where that red dot is just there, we have an absolutely perfect entry, which would have given us over 4% on a 15-minute time frame.Looking for the short long, we can go here and we can say, "Look at this one as well."Very small stop loss in comparison to the potential win of 3% there as well.Obviously, that is cherry-picking, but I do know a very well-known algo trader that absolutely swears by this indicator here.We're going to set that very, very quickly.Let's press that cog over here.We're going to set the oversold and overbought lines to be thicker just for YouTube so we can see it.
And then if I go over, I'm going to set my overbought line to 60 and my oversold line to 40.Great.Okay, so as I said earlier, when price is below the green line here and crossing over creating that green dot just there, we're looking for longs as price is considered cheap.When above this pink line here, when we might even just peak just slightly above it and crossing over, we've created a red dot and we're considering that price will be expensive.So, we're looking for shorts at that point.Okay, fantastic.
The strategy is completed with the Vix Fix volatility filter and ATR bands for stop loss and take profit. He walks through example entries and explains the planned risk-reward settings.
Right.Now, let's have a look at a very quick entry that would have been perfect.We have the Veda in green.We have a crossover here, as you can see.This one here would have been an absolutely perfect entry, making a quick scalp of 1%.Right.Now, we have one final indicator, the V Fix, which I've been here before.So, we're going to be adding the Vix Fix, this one here, which is the V Fix by Larry Williams, which is just this indicator here.We're going to be adding it.It's by a black cat.I've actually modified this version here and added my own kind of version, which allows us to add an MA.You'll be able to find all of these indicators down in the description below.If you want to automate and use the backtesting and all of that kind of thing, strategies, you'll be able to find the DavidTech strategies in the Patreon links below, as well.
Right.Okay.The V Fix.The V Fix is an indicator that was made by a Larry Williams.The idea behind this is that where the Vix, which is an indicator that used in some markets, this could be an potential alternative.We're looking for entries to be confirmed by this indicator here, which allows us to check for volatility in the market.We're looking for price to be below the white line for our entries.Okay, here is our first entry just here.As you can see, we are above the Veda.Uh we have the QQE crossing over in the oversold section, just here, just there.We are below this white line on the Vix Fix.Okay, so I'm going to take an entry, a long entry just here.As always, guys, I am cherry-picking.Right.Okay.So, we're going to now be adding the ATR bands by DavidTech here, this one here.
This is going to give us our take profit and stop loss.I'm going going our take profit and stop loss to 2.5 on crypto.I found that seems to be a good compromise for getting the best stop loss.We're going to set our stop loss to the ATR bands just like that.And then we're looking for a take profit.Now, I've actually back tested this looking for a two works very well.We also have much smaller take profits where we can look for a 1.5.I have minimized my take profit to 0.7% So, the main rules that I've looked at is a risk to reward of two like that.I've also would like to back test multiple take profits taking profits in multiple zones here.As we go up and maybe making the first to take profit a lot larger.My minimum take profit so that I can cover fees and everything else it will be 0.7%.
He runs backtests and reviews the strategy’s win rate, profit, drawdown, and equity curve across different settings. The discussion covers deep backtesting, multiple take profits, and the impact of leverage on results.
Okay, so that was my entry.I'm going to go away and back test this using the back tester and a David take strategy.Right.Okay, let's go.Come on David and once again he's got to call a new strategy.He'll be back in just 5 minutes.Come on David, show us show us what you got.Okay guys, as always I wanted to say a big thank you to Bybit before I go any further and show the back testing results.Bybit are not sponsoring the video and but they've always helped out our community and negotiated reductions in fees for everybody.They're taking 30% off of the fees and it also gives us more kickback to our community if you sign up with the links down below.It helps a lot so thank you very very much.You will also get huge bonuses if you make a deposit over to their exchange.
The exchange allows you to change trade cryptocurrencies and it's one I personally use.Okay, let's get over to those back testing results that everybody's waiting for.Okay, here we are back on TradingView.I'm going to now reveal the results.Drum roll, please.
Boom.Right.Okay, so this wasn't the easiest trading strategy in the world to optimize.I certainly have spent a little bit of time playing around with the confluences and things like that.But, I have found that this trading strategy works quite well on many different setups like multiple take profits and much smaller risk to reward, taking more trades, and all of those kind of things.As you can see, currently there's only 35 trades on the screen, but I will do a big deep backtest as well in a second.So, we currently have a almost 70% win rate.We have a 68.57 win rate.We have five wins in a row, two losses in a row.Uh we have a total trades, as I said, of 35.We have a net profit of 63% over here.Let me remove myself from the screen very quickly so you can see that equity curve.
The equity curve looks great.I'm going to deep deep backtest this so we can see right way back to 2022, the 26th of March.Boom.So, as you can see, the win rate is now at 60%.The equity curve was extremely extremely flat for a long long period, but then just took off as trading obviously volume increased, maybe.Uh we have 578%.If you go over to the buy to hold and look, here we have 567%.So, we pretty much made exactly the same as if you would have purchased Bitcoin right at the very very beginning here.Very much followed the equity curve of Bitcoin.If I place it here, you can see there's areas where we didn't make as much, but in the current market, we're actually earning better.We had a total trades of 189 trades.We have a 60.85 win rate and a profit factor of 1.7.
I look at the other factors here.We have a sharp ratio which is very low at 0.58.I did expect that on the small take profits that we got here.The settings I'm using are as I said earlier, we're using a risk reward but I'm using currently on this one a lower risk reward of 1.2.This does continue to be profitable all the way up to a risk reward of two.And also you can add the things like multiple take profits.This backtest here is a multiple take profits.So this setup here is a single take profit and is a risk reward of one.So we've decreased it and as you can see that's increased our win rate to 82% and if I deep backtest it is still profitable almost 80% the whole of the way but our net profit is only 260 62%.We have a 34% drawdown which is quite large in comparison to our net profit.
We have a 329 trades.Yeah, so the equity curve as you can see dips a bit here but is in general going in the right direction.It's hard to say whether this one would be a good one as well.I tried to trade for a much higher risk risk reward for higher reward than at a much smaller risk.Now this trading strategy even works in a negative risk reward which allows us to create even bigger win rates of 86% and it continues to stay profitable like I said all the way up to two.If I take this up to 1.5 and then do multiple take profits.Multiple take profits is added here.We're taking 50% off the table at 60% of our trade.We are still profitable.We have 81% profitability here.If I then add the deep back test, as you can see the there is a big dip in the trading strategy.
So, we'd have to work on trying to make that even better.We have a 71% win rate, but this is on multiple take profits.You do have to be careful on multiple take profits as TradingView kind of takes each profit level as a win or a loss.I feel 46% drawdown, which is huge for the amount of net profit.We are using leverage, guys.So, if I if I took out the leverage, it would reduce the net profit and also would reduce the max drawdown.
He shows how fees and slippage can significantly affect profitability and stresses the importance of accounting for them. The video ends with plans to improve the strategy and use it in his trading journal and automation tools.
Okay, one last thing I'd like to show you guys is the importance of adding fees and slippage into the actual trading strategy.I'm currently This is the first setup here.I'm currently at 0.04.That is the reduced fee that we get from Bybit.If we change the commission from 0.4 to 0.75, which we actually would get if we don't have that reduction, you can see that we're at 63% net profit here.If I change that to 0.75, you'd lose a good 20% of your profit just to fees here.So, that small reduction actually is a huge.Don't forget to set your slippage as well.Generally about 13 on BTC is what I set mine to.I try I try to overcompensate for this slippage, adding 13, maybe a little bit more as well.Okay, guys, certainly was not the best trading strategy I have ever tested on David Tech, but I will be putting it into incubate.trade.
Incubate.trade is that trading journal that we made here on David Tech, which allows us to record all of the trades of a trading strategy on live markets to see whether it really does work live.I hope you enjoyed that one.As I said, I will try to improve it as I am going to go away and try and improve some of the old strategies on Fridays here on David Tech.It allows us to go back and look at things that we've seen before, make them better, and hopefully create even better trading strategies.I would like to try and find some on lower time frames, some scalping trading strategies that doesn't keep me in the market too too long, increasing my risk, obviously.Don't forget you can add all of David Tech trading strategies, connect them to bots, automate your trading process but through David Tech.
The links to Patreon are down in the description below.And without further ado, guys, take care, keep safe, keep trading, and I will see you on Friday, maybe Wednesday as I do live streams on Wednesday as well.Take care.Have a great week, guys.Bye-bye.Come on, David, and once again he's gone to call a new strategy.He'll be back in just 5 minutes, RSI and MACD.