 So recently I decided to start working on creating my own algorithm for a trading bot to trade for me 24 hours a day with a set of rules to take long or short positions. During my research, I came across a bunch of channels that post up different strategies with specific rules that then claim that those strategies have a 60, 70 or even higher win percentage making pretty insane profits. That's impossible, even for a computer. So I started looking into some of these myself and basically reviewing their work. The first problem I found was that these channels were only taking 100 trades worth of data on a very specific stock or crypto. 100 trades really is not enough data to know how a strategy performs long-term. Especially if you're testing this out on one minute or five minute charts where 100 trades is basically a few dates. Secondly, a lot of these strategies, like the one that we are reviewing today for example, don't use real live market prices. So this makes the results of these strategies seem way better for the video to mislead you. And third, how do we know that there's no human error if they're manually collecting the data themselves or that they're not leaving out any bad trades to fluff up their numbers and make them look a lot better because if they're willing to use fake market prices then they're probably willing to manipulate those numbers even more to click bait you guys and get more views. Can't trust anybody these days. So my solution is to test the best claimed performing strategies on Bitcoin and Ethereum. I will also be testing these strategies on the last 100, 200 and 300 trade as well as multiple timeframes to get a better perspective on how they perform longer term. We will also compare it to just holding the actual Bitcoin or Ethereum during that same time period. And finally, this will all be done through the trading view back test feature. I am literally taking these strategies, paying someone to code them into an indicator with the exact rules for entry and then back test it using real live market prices. This will eliminate human error and any misleading manipulation. Since I will have these strategies coded into an indicator, I will take the best performing ones and connect them to a trading bot to trade for me using real money. And we will see how it does. This is definitely going to be a fun experiment and who knows, we might actually find some good strategies. Best of all, we're gonna do this together. So without further delay, let's dive right in to today's video. What's up guys? I am Jay and welcome to Bitcoin Daily. 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. As a disclaimer, I am invested in Bitcoin since 2016. If you guys are new here, don't forget to smash that like button and subscribe to the channel and turn on your notifications so that you know exactly when we go live with these new videos. All right, so the first thing that we're doing here is going to our trading view charts and we're actually changing our chart from where it currently is on candles. You can do that by going up here where it says candles and we're going down here to Heiken Ashi and you're gonna see that's gonna switch your chart up a bit and it's gonna look a little bit different. So when you watch any strategy video and they tell you that in order for the strategy or the indicator to work, you have to change the chart to Heiken Ashi. That should be the first red flag. Let me explain. These here on the left are your normal candles as you guys can see and these here on the right side are your Heiken Ashi candles. Now, if you see this first move up here and then you look at it in the Heiken Ashi side, you can see, look at all this red on this side and look at all this green on this side. So what the Heiken Ashi does, it kind of smoothens out the price action, right? We can see it again here, again another move up. Look at this big red candle here. But if we look at the Heiken Ashi candles, there is no red candle there. This is basically straight green to the top. Here you can see that it was not straight green. Although there was a lot of green, it was not straight green. We even had one huge red candle there, which is non-existent on the Heiken Ashi chart. So why does this matter? Because if you're doing back testing and showing results based on signals on a Heiken Ashi chart, those signals are not going to be accurate. The entries and exits numbers on Heiken Ashi charts compared to normal candle sticks are completely different. The reason why is because the way that they're made, they have a different formula. It's not just the high, the low, the open and the close price. The Heiken Ashi candles have a formula that is applied to it to kind of take out the noise from in between, right? So the formula goes as follows. The close on the Heiken Ashi candle is the open plus high plus low plus close divided by four. The high and the low will remain the same. It's going to be the highest price and the lowest price throughout that candle. And then the open is going to be the open of the previous bar plus the close of the previous bar divided by two. So this is Bitcoin right now showing the exact same chart, but the left one is Heiken Ashi. The right one is normal candle sticks. You can see the difference here on how they look. Right now there's two red candles and in the Heiken Ashi chart, there's two green candles. The last two ones. You can see this final candle here that closed, opened at 2647 and closed at 2858. The final candle here that closed, opened at 2858 and closed at 2841. So really big differences between the opening and closing of Heiken Ashi candles and normal Japanese candle sticks. Anyone that tells you that the difference between them is not huge and doesn't really affect back testing is lying to you. And this video that we are reviewing today called the best trading view indicator for scalping one minute to daily with an accuracy up to 80% is showed all its back testing through the Heiken Ashi chart. This video right here that also tested this same exact strategy 100 times on the five minute chart parentheses crazy results and even showed that they got a 51% win rate with 212.52% profit. Again, did all of this using only the Heiken Ashi chart. So first I'm gonna show you guys how to set up the strategy and then I'm gonna show you guys real results using the signals on the Heiken Ashi chart but opening them at the actual market prices in candlesticks. So I know it's gone kind of long but I have to preface this so that you guys understand what these other people are showing you and why their results look so crazy versus what I'm going to show you which is the real live market prices that you would actually get if you were using the strategy and these signals to open up trades in real life. So let's dive into it. All right, so the first indicator that we're going to be using for this strategy once we have our chart set up with Heiken Ashi is going to be called Chandelier. If you guys write Chandelier, you should see it right. It should be the second one that's called Chandelier Exit by Everget. Click on that and this is what this indicator looks like. It gives you buy and sell signals and basically tries to ride and catch the trend. However, you'll notice that there's a lot of fakeouts so what we need to do is open up the indicator and the first thing we're gonna do is change this ATR period from 22 to one and change the ATR multiplier from three to two. That's gonna help us get rid of some of the fakeouts and get into some of the entries at a earlier time. Next, we're gonna go to style and we're gonna take off everything except buy label and sell label. So let's take this off, this off, this off, this off and then we're gonna go to the buy label and change it from absolute to below bar and the sell label from absolute to above bar. Hit okay and our indicator is now set. You can see that the buy and sell signals are now a little bit more accurate. It gives it to you a little bit earlier and there's going to be less fakeouts now with these updated settings. However, there's still some fakeouts here you can see on this one. You can see the indicator going in both directions here when there's really no direction. So in order to try to make the strategy more accurate we basically need something to help us confirm the trend. This is what I call a confirmation indicator, right? So we're gonna go back to indicators and type in ZLSMA and you'll see it right here the zero lag LSMA by verified or verified. Click on that one and it's gonna put this moving average on our chart. Now we wanna open that up and change the length from 32 to 50. You'll see that that'll smoothen out the moving average a little bit and then just hit okay. And that's basically it for the strategy. Now we're all set. So now let's talk about our entry and exit roles. So it's pretty simple. When we are entering a trade we need two things happening. The first thing is we want this buy signal here and secondly we want the price to close above the MA. So this signal here is telling us buy and the price is above the moving average. So on the very next candle or on the close of this candle we would open a long trade here. Now on the sell side we're basically looking for the opposite, right? If we're looking to open a short position what we're looking for is a sell signal and for the price to close below the moving average. So right here we got a sell signal. We see the price below the moving average. We can open that short trade there. So let's set up a few trades so you guys can see where to place your stop loss and where to take profits. So if we opened our trade on the close of this one it would look like that. The first thing we're doing is setting up our stop loss. Now our stop loss is going to be at the swing low. So the swing low on this trade would have been right around here. Let me see this trade was on the 25th. So it might have even been a little bit tighter probably right around here, right under this wick right here. That's where we're setting our stop loss. And then to take profits we're not setting a take profit. We're waiting on the indicator to let us know when to take profits. So the rule for taking profits is once the price drops and closes below the moving average that is a signal to take profits. So that's when we are closing our trade. In this case we would have closed our trade right about there. And this is exactly what our trade would have looked like. We would have entered at the close of this buy signal. We would have put our stop loss below the swing low, which was this candle here. And we would have taken profits when the candle closed below the moving average which would have been right here. That's a move of 4.17% from our entry and a risk to reward ratio of 4.21. So a great trade, right? Now for a short entry position we're doing the exact same thing but flipped. So we got the sell signal. We're opening at the close, setting our stop loss at the swing high. And then we're closing as soon as this closes above the moving average that's this candle right here. So now that we can see that we got another profitable trade. Now this one wasn't as big but it was a move of 0.33% with a risk to reward ratio of 0.33. So now you guys know the rules for entry and the rules for exit. The next thing that we're going to do is take a look at the bot that I created and see if the entries and exits match. So let's compare the two trade examples that I just showed you guys. So you're gonna notice once I turn the bot on it doesn't show buy and sell. What it's going to show is short, long, close short, close long. And if a stop losses hit it'll say SL long or SL short. So if you look here at the example trade that we set up you'll see that it's basically set up exactly the same. It entered right here on this candle on the close of it. It set up its stop loss. I set it up at the daily swing high. It set it up at the previous 24 hours swing high. So however you want, you can set it up. This is how the bot is doing it. And it closed at the exact point where I said that the rule for close is. Let's take a look at the long trade here. You'll see that we got the long buy signal here from the indicator and the bot also gave the long signal. You'll see that we set up basically the same stop loss here at the swing low. And then you'll see that it actually closed it one candle before where I had set up the close which is perfectly fine. That just means that this actually closed below the candle since I can't really tell there. It's so close. I had put it at the next candle but closing it there is completely fine. So our rules and the bots rules are exactly the same. We took the trades exactly the same, opened them and closed them exactly the same. So we can now say that the bot is working properly. Now we're gonna talk about some of the variables. The first variable is obviously, we're looking at this on the Heiken Ashi chart. I'm going to show you the same signals on the regular candlestick chart which is where you would actually open and close the trades. The next variable is going to be the amount of capital you're trading with. For the purposes of this back test, I put that we started out with an initial capital of $1,000. I think that's probably around what the average person is probably using to trade. And for order sizes, I just put 100%. Keep things simple. Every trade will be using 100% of our capital. Now one of the videos that we saw where they tested this exact strategy 100 times, as you guys can see here on the five minute chart, they got a win rate of 51% with a profit of plus 212.52% on a total of 100 trades. So that seems like a good place to start since this video has almost half a million views and 13,000 likes. Now in his video, he had to manually back test everything and input all the data. For me, all I have to do is go here to my settings, change the back test start time until I hit 100 closed trades over here, hit okay, and now we can look at our results. And this is what it looks like for 100 closed trades on the Heiken Ashi chart. So you'll see that not really much has changed here. We got a net profit of 4.87% or $48, a percent profitable of 41% and a profit factor of 1.596%. You'll also notice here, the green is our net profit, the blue is what would happen if you just buy and hold Bitcoin. You'll notice that just buying and holding Bitcoin would have outperformed this strategy. Now in order to get 100 trades, I only had to go back a few days. This is literally eight days out. So eight days is a very, very small sample size. Let's go ahead and look at 200 trades and see what that result looks like. All right guys, so now I've gone back a few more days. You can see now we're back to October 9th. So that's 17 days to get a total of 200 closed trades and let's see how this performs. Now we got a net profit of 9.49%, a percent profitable of 45.5%, and a profit factor of 1.551. On the chart, you can also see that now this strategy is outperforming if we were just holding Bitcoin. And then finally, let's go back to 300 trades because still 16 days is not a long period of time to know how a strategy is working. So let's go back a little bit further until we can get 300 total trades closed. All right, so we went back a few more days and now you can see that our net profit is 19.42% with a total of 300 trades, a percent profitable of 47% and a profit factor of 1.69. And now you see that our strategy is definitely outperforming Bitcoin if we were just holding it. In order to close the 300 trades, I had to go back basically 26, 27 days. And in 27 days, 19.42% not bad. Now the issue is this is lying to you. This is not real. Let alone how he got to 212 profits on a total of 100 trades. Because 100 trades, remember that's about a week. And in four weeks and 300 trades, we're only at 19.42%. Our percent profitable, our win rate is very similar. He had 51%, we're at 47%. But this 212% profit is definitely very questionable. And that's that we're both using the Heiken Ashi chart. Now let's take it one step further. So I am now splitting my charts in two. One is going to be set up with the Heiken Ashi chart. The right side is going to be set up with regular candlesticks. I then loaded my indicator here for the back testing. I'm going to set my timeframe to the same exact day, which was September 30th, so that we can get a total close trades of 300, change initial capital to 1,000, percent of capital to 100. Now all the settings are exactly the same as you guys can see here. The only thing different is going to be that I'm turning on use Heiken Ashi here. In the settings and we're doing this on candlesticks. So let me explain exactly how this works. The bot is using the strategy that's being signaled with the Heiken Ashi candles. But remember the Heiken Ashi candles don't show you real open and close prices, which makes your back testing inaccurate. But the candlesticks do show you real open and closing prices. So when the signal goes off on the Heiken Ashi chart, the bot is going to long or short using the real live open and closing prices of the candlesticks. So if you were using this strategy in real time, you have to use candlesticks to open and close because basically you're making a market order, right? You can't use the Heiken Ashi because that's giving you an average price, which of course doesn't work in a real live situation. So next let's pull up our back test strategy tester here and this is here on the left side. You guys can see this is the one that we already saw. A net profit of 19.42% after 300 total closed trades, 47% win rate, 1.69 profit factor. Now let's look at it. If we were using the strategy on the Heiken Ashi chart, but opening the trades in real time and you will see how different this looks. Our net profit is now only 0.67% after 300 total closed trades. Our percent profitable, our win rate is only 40.33% and a profit factor of basically one, right? 1.019. This is drastically different. 19% versus 0.67%, $6 versus $194. Now we can see what this strategy actually looks like in real time. And now you see that this here, this 51% win rate, 212% profit. This is all completely false. They did all of this under the Heiken Ashi, which is already false. Plus I don't know how he was calculating his profits, but this is a huge, huge difference here as you guys can see between the two different charts. So here's a chart with my results where I back tested the one minute, five minute, 15, 30, one hour, two hour and four hour with 100 trades, 200 trades and 300 trades. And these are my results when using the Heiken Ashi. As you guys can see, the green means that it was profitable. So yeah, everything was profitable here. And then if we look at the same strategy using the Heiken Ashi as the signal, but the Bitcoin candlesticks to execute the orders. So if we were using this in real time, this is what it would look like, right? You can see the results are vastly different with the majority of it being red, meaning not profitable. And I went as far back as the four hour chart many, many years ago, 1,512 days and it was negative. Especially when going that far back guys, you're better off just buying and holding Bitcoin at that point because that vastly outperforms this strategy here. And if you guys wanna see what this strategy looks like on Ethereum, here you guys can see the Heiken Ashi doing the strategy, doing the back test just on Heiken Ashi and then doing the back test using Heiken Ashi for signals, but executing the orders on real time prices. And you can see once again, minus 21% here for on the five minute chart versus 107% profit just on the Heiken Ashi chart. If we change it to the one hour chart, you can see with 843 total closed trades. This shows that we would have done 8,962% profit and of course outperformed Bitcoin. But if we look at what it actually looks like taking real orders, executing them in real time, you can't even see our chart because it is way down here. This is what our profit would have looked like. We would have been up 61%. We would have been way down here. And if we would have just bought and held Bitcoin with the $1,000, we would be way up here. So my closing thoughts, guys, this strategy is unfortunately not a viable one. It is not accurate, it is not consistent and it just doesn't work. So this video here, best trading view indicator for scalping one minute to daily trade, accuracy up to 80% is a lie. This is false. They're only looking at the Heiken Ashi chart but you can't trade using Heiken Ashi prices. In this channel here saying that he tested indicator 100 times on a five minute chart showing 212 profit and a 51% win rate. This is also a lie, guys. It might not be that he's lying, maybe he just doesn't understand that in real time you can't open and close prices with the Heiken Ashi prices and signals. It just doesn't work. So obviously he hasn't actually done this with real money because then he would know. So I definitely do not recommend you guys at using this strategy. Maybe if you can add other indicators to make it more accurate, it might help. But as of now, the way that this is set up, the way that these videos, it is not an accurate strategy and it's not profitable. So I tried to optimize the strategy a bit. I didn't really have too much success. Using the five minute candles here, I went back as far as it will let me go, which is till August 15th. And after 850 closed trades, using the same exact strategy here on the five minute candles, it was minus 4.45% with a 38% win rate. Now what I did on this side here, I added an indicator called ADX Average Directional Index and basically added a rule for the indicator not to take any trades unless it was above this 20 mark here. So right here, you can see below here is just, that usually means it's not much direction. Above 20 is when we start seeing an actual direction. As you can see when this indicator goes up, price moves in a trend. So the trades dropped from 850 to 608 closed trades, very 10.41% profit. However, our win rate also dropped to 33.39%. But as you guys can see, we did outperform just buying and holding Bitcoin during that period of time. If we do the same thing on the one hour candles, you can see here, using just a basic strategy, I put this back basically for year to date results. And you can see that it took 236 trades with a net profit of minus 5.16 and a win rate of 41.1%. Now when I added the ADX, we actually made a profit of 30.58%. We took a few less trades with only 193. And our win rate actually dropped to 36.27 versus 41.1%. But what's important is making the profit, not really the win rate. Let me know what you guys think about this strategy. And also in the comments, drop any other strategies that you want me to review and back test. I will be reviewing a lot of these strategies in the future and I'm excited to see if we actually find any profitable ones. But I can already tell that I will be debunking a lot of these false and misleading claims. Don't forget to smash that like button if you enjoyed this video and subscribe to the channel. I just did a video talking about this crazy double bottom pattern that might just send the crypto market into a frenzy. I think you will definitely be surprised. Just click on the video on the screen right now. I'll see you guys on the next one. Peace and love.