 This YouTuber claims that this trading strategy for scalping on the 5 minute chart made him 260% profit in just 800 trades using the Bitcoin chart. Today we're going to review and test this strategy to see if it actually holds up. What's up guys? I am Jay and welcome to Bitcoin Daily. Recently I decided to begin testing the most popular YouTube trading strategies. During my research, I came across a bunch of channels that post up different strategies that claim that they have crazy high win percentages making insane profits. But what I found is that most of these strategies didn't actually work. So I am picking the most popular strategies on YouTube and then coding together a script so that I can back test these strategies using TradingView's back testing feature. I then show you guys the real results and win rate of these strategies with over 2000 back test trades across seven different time frames. As we find profitable strategies, I will take the best performing ones and put them to the test with real money. If you're interested to getting access to these TradingView scripts, stay till the end. Remember that this content is for educational purposes only and is not financial advice. Always do your own research before risking any of your own money. So if you're new here, don't forget to subscribe to the channel and smash that like button. Before I show you guys this strategy, I want to give a shout out to Candy Cane who is the person who recommended me to test out this strategy. So thank you Candy Cane and for anyone else watching, if you have any strategies that you want me to test out, drop it in the comments so that I can check it out. Alright, so let's talk about the indicators. This strategy is actually very simple to do. You're using regular candlesticks and you're just going to add two indicators to your chart. So we're going to start off with super trend. We're going to add the one that's actually created by TradingView, not the one that we usually have used in these videos. So just go ahead and click on that. We're going to open up the super trend. And the only thing we're going to change here, we're going to go to Inputs. We're going to change ATR length from 10 to 55. And the factor we're going to change from three to two. And then we're going to hit OK. The second indicator that we're adding here is the EMA. So you can just type EMA. I have it as a favorite. But if not, you should have it right here under Technicals, Moving Average Exponential. Just click that one time. We're going to open that up, change the length from nine to 200. And now this is preference, but you can change the style. I like to usually put it white and make it just a little bit thicker, you know, just so it gets easier to see and then hit OK. So let's go over the entry and exit rules. Again, very, very simple. If the super trend indicator is green and above the 200-day moving average, that is a entry. If the super trend indicator is red and below the 200-day moving average, that is a short entry. As far as stop losses, we're going to be setting up these stop losses at a 0.5% from your entry. And take profit is going to be at 3% from your entry. All right, guys. So now let's put it all together and look for some long and short entries here so you guys understand exactly how to use this strategy. So the first entry that we come across here, if we kind of look at the five-minute chart, we're looking at the five-minute chart because the video that we watched for the strategy said that it was a scalping trading strategy for the five-minute chart for Bitcoin. So that's the chart we're currently looking at. And we'll see that the first trade that we run into here is this one right here. So this is a short trade here. We would open this trade on the close of this candle. Boom. So now we know that our profit has to be 3% as per the video's guidelines. So we're setting up our take profit at 3%. And our stop loss is going to be set at half a percent as per the video's guidelines. But that's the basic setup right there. And then you wait to see if either your stop gets hit or if your take profit gets hit. If we stretch this all the way out, we can see that it has not stopped out. But this trade is currently in profit. As you guys can see, we're almost at our take profit spot, which is at that 3% mark. You can see we're almost there so far. All right. So now let's look for a long entry. So we need the super trend indicator to be green and we need the price to close above the 200-day moving average. We see that both of those happen right here on this handle. And we're going to do the same thing. We're looking for a 3% target and a half percent stop loss here. So set it up at half percent. So if we extend it out all the way, you will see that it might have stopped out right here. So for the purposes of this video and these back test results, our trades do stop out and close out once the price goes below that 0.5% stop loss. So that would have been a stop out. That would have been a loss on that trade. So now ladies and gentlemen, it is time to pull up our bot. Let's compare the entries and exits with what we just showed you guys and make sure that it is following the entry and exit criteria. So you guys can see here it says short exactly where we told you guys that we would have entered a short trade. And if we take off our thing, then you can see the lines here on exactly where it's setting up its entry, its stop loss, and its take profit. So the red line is a stop loss, yellow line is the entry, and the green line is the take profit. So if we look at it, we'll see that again, it hasn't hit the take profit yet, but it's almost there, right here where we took our long trade example, you can see that it opened up the long trade in the same exact spot. So it says along with an arrow showing which candle it used to open that trade. And if we take off our drawing here, you can see that it set up its stop loss at 0.5% exactly where we had it and take profit way up here at 3%. If we go all the way down, we will see that it did hit the stop loss here, but because the candle again closed above and met the criteria here for our trading strategy, it also opened up another long trade here. So it closed the trade, opened up another one, and the good thing it did because you can see that it ran all the way up and eventually it did hit the take profit here on that move. So that was a winning trade after a small losing trade. And that's basically what you're going to see a lot of with this strategy that we're going to have a lot of small little losers. But then when we hit take profit, it's going to be a lot better because remember, we're getting a six to one risk reward ratio on this. So it's time for the test. Now remember, there is always a variables depending on how much risk you're taking per trade if you're using leverage or not, and some small differences in the entries and exits. So we're going to always be keeping all those different things in mind when we're back testing these things. And we're not expecting to get the exact same results, but we're trying to get somewhere close to it at least so that it shows us that this is a working strategy. So let's go ahead and jump right into the back testing and show you guys the results. Alright guys, so we did all our back tests and we finally have all the results for you guys. Let's go ahead, dive into it, break it down. So the first thing you'll see is that we were only able to get 100 trades from the one minute and five minute timeframes. Now the issue with trading view is that it only shows you a certain amount of candlesticks, right? So I believe it's around 20,000 candlesticks, I want to say because of the one minute and five minute timeframes since they're so small, there's so many more candles that if the strategy doesn't take trades often enough, we won't be able to see to back test all the trades because we can only look back for 20,000 candles within those 20,000 candles. If the strategy hasn't taken enough trades, then we can't go further back now, you know, we don't have a choice. There's nothing we can do there. So that's why for this video, for this back test, we only were able to get 100 trade samples in the one minute and five minute. Now what's gonna pop out to you is these win rates 21%, 18%. In the 15 minute, it's at 13%. In the 30 minutes at 13%, 23%, 22%, 21%. So let's say that we're averaging probably around 20%, right? If not even maybe a little bit lower. Now here's the issue with this. I went to winrate.io where you can simulate your profits from crypto trading. I put that we're trading on Bybit. So it automatically sets up the limit order fees and market order fees, right? We put our starting balance with 1000 with a win rate of 20%. Our take profit is 3%, stop loss 0.5%, 100 trades with 10x leverage. And when we ran the strategy, we're losing money because even though we're winning money, we've paid about $1,500 in fees. So now when you add up the fees with what we've lost, we're down $187. So 20% win rate is just not enough for what we do personally, right? On Bybit with leverage. Now if we were able to get higher than 20% on this strategy, I just put 21%. Guess what? Now we're in profit plus $127 in profit. And you can see here, we're winning, we're up $2,000 on our P&L, but paid basically $2,000, almost $2,000 in fees. And that's why our profits only $127 there. Now if you go up even higher, then that's when you start really seeing that difference. Let's say if we had 25% win rate, our profit would be over $3,000 with this strategy. So that's the big issue that I'm seeing right now with this strategy. One hour is what's looking like the sweet spot to me with this trading strategy. I know it's supposed to be a five minute scalping strategy. Maybe it is. I just, I wasn't able to back test it enough, but on the hourly, it did perform pretty well. 34% on the first 100 trades was a 23% win rate, 46% profit with a 20% win rate and then 48% with 18%. Now the issue is that as it goes, it went longer and further back, right? At 100 trades, we're at 23%. If we simulate this at a 23% win rate, we run this strategy, we're at a profit over $1,000, right? So that's fine. And if it's over $1,000 profit, that means that we did over 100% because we're using leverage. This is why I do always trade it with leverage. But again, as you fall down to the 20%, to the 18%, now the fees that you're paying are outweighing what you're winning, right? On a two hour, you can see not bad as well. We had a 29.5% with 22% win rate, 46.11% net profit after 200 trades with a 20% win rate and a 48% net profit with a 18% win rate. Again, same thing, right? We're starting off with a decent win rate, 22%, but then as we make more and more trades, our win rate is going down. So now we're at 20%, then we're at 18%. And then at the four hour, 25% net profit at 21% win rate, 20% profit at 18% win rate after 200 trades. And we weren't able to back test it for 300 trades because the chart just didn't go back far enough. So I'm giving this strategy a 2.5 out of five stars. As you guys can see, it is the best rated strategy so far. The average net profit was the highest one that we've tested so far, but the win rate was the lowest that we've tested so far. You can see the average coming in at 17% win rate. So this is not a strategy that I'm looking to put any funds in right now. I don't feel comfortable enough. I don't think it's good enough for me to test it out with real money. So again, we're going to pass on this strategy. If you can figure out a way to optimize it, get that win rate higher with the same net profit, then this could be a profitable strategy. But as it is right now, as the video shows it, it is not a profitable strategy in what we've seen here. Let me know what you guys think about this strategy and if there's any optimizations that you guys would make or have made to get this to perform better. Don't forget to subscribe to the channel guys if you're new here and smash that like button if you got any value at all from this video. As you guys know, FTX went bankrupt along with a bunch of other companies including BlockFi. So a lot of people have been losing their money. I know it's tough and that's why I created this video right here where I show you guys exactly how to keep your crypto safe and use a self custody wallet so you that you never have to depend on a third party with your crypto. Again, if you want to watch that, which I highly recommend, click it on the screen right now. I'll see you guys in the next one. As always, peace and love.