3x Trading WORLD CHAMPION Reveals the “Low-Effort” Strategy That Won the Robbins Cup (Live On Chart)

This is John Luca, one of the youngest World Cup day trading champions ever. At just 23 years old, he traded in the most prestigious trading competition on the planet up against veterans, full-time professionals, people who've done nothing but trade for decades. And he didn't just beat them, he made 104% in a single quarter. And in this episode, he's breaking down his complete championship winning strategy and risk model live in person for the first time ever. And I was always trying to predict it and I always lost money doing it. So when once I understand this thing, I started becoming profitable and once I understand one more thing, I started to win the trading championship. I became a statistical trader. So I start using math to beat the benchmark and to beat the championship. So that's what totally shift my trading. Don't try to understand a pattern. Try to find something that you know that works and not by feeling. John Luca has built one of the most sophisticated trading processes I've ever seen. He uses market regimes to define the environment, structure and value areas to frame the setup, then price efficiency and volume to time the exact entry. You see this? So one condition is met. The break of structure, the break of the value area happen and we have the volume low effort big result. Okay. So we just take the trade here. >> But what really caught me off guard was his risk model. I'd never seen anyone approach risk like this before. So in this case a win tell you something about the next trade because we perfectly know that the market is in trend and our strategy has a positive autocorrelation and perform better in a trending market. Okay, that's so important to understand because once you have this you can squeeze your risk to the maximum level. >> And that's when I realized John Luca didn't become a world champion because he got better at predicting the market. He became one when he stopped trying to predict it at all. He spent years losing, rebuilt the way he thought about trading from the ground up, and turn that process into a championship winning system. Nothing in this video is financial advice. Everything discussed is simply the insights of a 23-year-old world champion. Now, let's see what John Luca is made of. Gian Luca, you just finished first place in the quarter 2 2026 Robins World Cup trading championship with a 104% return. You also finished first place quarter 4 2025 with a 58% return and you're currently in first place quarter 3 2026 with a 254% return at just 23 years old. It's extremely impressive. Now, before you show me the exact strategy you used to do all of this, what's the number one thing that clicked for you that allowed you to go from a guy just trying to figure all of this out to trading at an elite level like that? >> Okay. So, thank you for the greetings. And um I started my career as a trader, as a discretionary trader. I was always trying to understand why certain move in the market happened and I was always trying to predict it and I always lost money doing it. So when once I understand this thing I started becoming profitable and once I understand one more thing I started to win the trading championship. The first thing that switched me that switched my trading was that you don't need to understand the market to be a to be a profitable trader. Most traders spend their time studying every move of the market trying to understand why a certain thing happened. But the reality is the the movement already happened. You're already late. and understanding why will only drain your time and not and it will not gain your P&L. So what I did instead was was not trying to understand the market but finding some properties in the market test it and exploit it. So I wasn't searching for a profitable strategy. I was searching for certain problem for c for certain properties that I can use in a strategy and maximize the return and the first thing and this all combined made me a made me a mechanical trader. Later on I will show you all the strategy in the next few minutes. I became a statistical trader. So I start using math to beat the benchmark and to to beat the benchmark and to beat the championship. So that's what totally shift my trading. Don't try to understand the market. Try to monetize every time you saw a pattern. Don't try to understand a pattern. Try to find something that you know that works and not by feeling. Because I want to be honest with you, the moment you click buy and sell based on a feeling, you're not a trader. you are just a gambler with a Trading View subscription. That's the reality. Most people don't realize it, but it's the truth. So, try to find something that you know that works based on statistical analysis data and exploit it to the maximum return possible. That's what I did. >> And Gian Luca, just to be clear, Robins World Cup, most prestigious trading championship, you've beaten guys that have been trading for 30, 40 years on there. And you're saying that once you let go of the why and stop trying to understand every piece of the market, you were actually able to go from struggling to highly successful. >> Absolutely. Yes. Because if you start asking how if you always ask why instead of how I can monetize it, you're not making a strategy. You are taking response of what the market already did. So you just you need to switch you need to switch your thought about that and start thinking about okay I don't care why the market did this my job is not to predict the market my job my job is not to understand the market my job is to be on the right side of it okay I don't care why the market did something I don't know this is not my job I need to monetize when I can my setup. That's what you actually need to know. Okay. >> And Gian Luca, just to be clear, do you think if we took almost any struggling retail trader and taught them your process and what clicked for you from start to finish that they could start trading at a at least successful level? >> Absolutely. Yes. I taught my approach to a few friends. They always became immediately profitable because they switched the method. They switched all you think about all they switch all they think about the market. And when you know that in certain condition you have a positive expectancy. Not taking the trade will leave money on the table. I'll make easier for you. If I give you a coin and I'll tell I'll tell you try to bet on a coin but you know h it's a cross header or head or tail. Okay. And you know that will land tail 65% of the time. Okay. Because that's the edge. If the coin you you will bet on it first. >> What do you think? If 65% of the time it lands tails, assuming a onetoone payoff structure, >> of course, I'd go with tails. >> And you will be scared if it lands ends five times in a row. >> Mhm. >> Of course. No, because you know that you have an advantage. >> Mhm. >> Okay. That's what we need to know. When you trade with my appro with my approach, you will know that in certain condition you have an advantage. That's it. And it's not based because you think so. It's made because the data say so. >> And it's a way easier. It's a total way easy. It's a total easy way to trade instead of discretionary instead to trying to understand anything in the market. That's what shifted for me and that's what for me is the holy grain in trading. >> And you would attribute this again to the success you've had at this level. >> Totally. because I was an unprofitable trader for more than two year after I switched my approach and I became and I became profitable but I knew that I was just looking for the top of the iceberg. I knew it can go deeper this kind of knowledge and later on I studied statistical analysis and I became a trading world champion two times actually maybe hopeful three. Gian Luca, I want to get out of the abstract here and get on the whiteboard, see exactly what you do, and then we'll get to the chart later. So, when you're ready, I am. >> Okay. >> Okay. Excellent. >> Jan Luca, walk me through exactly what you did to come in first place for two trading championships and how you're currently in first place. >> Yes, of course. So because so before I show you all the framework of the strategy that I use actually in the championship, we need to understand some concept of validation of your edge and how you can actually optimize your edge for a for a championship for a prof because the reality is most people try only to get a better strategy. So they add one concept, they try to fix the weak point, but the result is always the same. They overfeit the edge. When they go live, it's totally different. So we will work through first how to avoid overfitting and how to do a proper back test in order to understand and trust your data. >> Now, real quick, how important is this validation step from one to 10? >> It's 10. It's totally 10 because if you don't do that the all thing that you will do later will be only ruled by luck >> and you can have luck for 50 trades for 100 trades but for 10,000 trades luck cannot be an answer. Okay. So we will work through the back test part and the most powerful part is not trying to add some concept in the strategy but choose the best risk model to monetize to squeeze every return of your strategy. I have to tell the truth on you uh about some of my championship because half of the profit that I made on the championship was made by the strategy. The other half was made by the risk model that I actually use. If I use instead a fixed risk a fixed risk sizing model, I will always gain half than what I did now. >> Okay, >> so we will start from the first that is actually overfitting. >> And to be clear, what is overfitting for anyone who doesn't know? >> Overfitting is when you made real on the past that fits so perfect that actually work on the past. When you strict your rule, when you add so many rules, so many filters on your strategy, the result is when you add so many rules and you never optimize. No, when you add so many rule, you just have a perfect back test. >> You just have a perfect back test. But a back test doesn't make money. >> You know, a strategy in a live account makes money. So to be clear, it's like you take a rules, add them to your strategy until you finally get a good back test. >> Yeah. >> But it won't repeat in the future. >> No. Because for doing a back for doing an amazing an amazing back test, you have to live what the data tells you that work and eliminate what you love. Because people are so attached to maybe a setup, maybe a certain condition, but you have to be cold about this. You have to leave only what does the data tell you that work. >> That's the first part. And I and the second part will be the win rate. Okay, we will tell you what I will tell you why the W rate alone is basically a scam. telling that my strategy has an 80% win rate means nothing on if the strategy is profitable or not. So what we will use instead I will show you later and later on we will talk about the initial risk models that I anticipate to you >> is based on calibration and autocorrelation. >> It's a big word. >> I'll ask you about that later. >> No worries. But first let's start with the first one. I know that you're watching this right now and you have a probably and you probably have a back test that look like this. >> I'm totally sure that one of you that are watching this right now have a back test that sound like this. But the reality is is this back test real or is it a fantasy? We have to question that. How we question this. First we should understand where we do our back test. Let's assume that we make the rule and make the strategy on the 20 4 and 2025 market. Okay. What you have to do? You have to do a test auto sample is called this is where you build the strategy. >> So this is your in sample period. >> Yeah. >> Okay. And why is this important? because because you have to run your strategy in sample that the market has not seen yet. >> Okay, this is called in sample test. The out of sample means that you have to test the same strategy in the data that the market has not seen yet. So for example in 2026 market >> if the condition stays and what I mean with the condition I don't mean the way rate I mean the share ratio the expectancy all the important metrics that matters that I will explain you later if of course they will move okay because our edge is never stable it changes but for example if our expectancy and sharp ratio move around 20% 25% is totally normal okay if moves for more than 50%. It's probably that your edge isn't solid. >> Okay. >> And why do you look at the sharp ratio? >> Because I want to see my return in the report of the draw down. Okay. This is so important because two traders can make the same amount of money but one maybe two traders can make 50%. Okay. Same. How do you judge which is the best one? You judge it by the with the share ratio because maybe this trader has a solid process. So it went 10% 5% draw down etc etc. Maybe these guys went one day 10% profit one day minus 20 the other day plus 30. He has not a solid return. >> So this can be luck. >> This cannot. So share preo responds to one question. Does is your age solid or you are just a gambler that had luck because also the variance and the luck is really important. The more sample you have on your strategy, the more variance you will have. Okay. And variance what does it mean? That the edge will show itself over the variance in the for example if we are a scalper. Okay. We take for example 10,000 trades in a year. Okay. Our viance can be also 100 trade. What does it mean? That our edge isn't solid in the first 10,000 trade. In the first 100 trades, sorry, but it will prove itself after. >> Mhm. >> Of course, it's not totally always like this, but you can have luck in the first 100 trades. >> So, just to be clear, when you have low sample size, variance and other factors can affect the performance that you see in your back test or even live trading, right? It's you can't tell it do I really have an edge or is it just >> chance variance etc. Right now what what specifically then is a good sharp ratio >> above 1.5 is still good. >> Mhm. >> Okay. >> I would say also 1.4 is still good but below one is not very good. >> Okay. >> Okay. So we will say just this >> please continue. Yeah. One of another thing that is so important for the PBO that is the probability back test overfitting is how many variants of the strategy do you actually test because if we have a strategy and for example we have a trigger okay we can take an operation here and we test so many variants of this. Maybe we test 10 different model of trigger, 10 different model of market structure. For sure we will find something that will have a share ratio above this. >> But this does not mean that this is real. Okay? Because if you test lots of variants of that sample of that strategy can be overfitting itself. Okay? So it's so important to see if your data are stable. So for example expectancy and share ratio are solid in the auto sample test. Okay. Because these are just an strategy can be overfitting. This is the response. >> Okay. >> Okay. We have also other model like chunk optimization. So you can divide your back test in 10 different row for example and see if the model are stable. if the if the metrics are stable. But this is actually my favorite one. >> Okay. And you're just saying what to do is you build your strategy on a specific data set. >> Yeah. >> Right. And you're going to add rules or do whatever and you'll get a good back test. >> Yeah. >> Because you would never move forward without a good back test. >> Then you test what you did here out of sample completely new data. >> Yeah. >> To see if the strategy is overfit. >> Yeah. And obviously if it's overfit then >> then we have to see what is the problem itself because if it's overfitit and our data are totally different from the back test we don't we didn't have a strategy we just have a dream okay that's the reality of that. So we need to change everything about that. >> But if you actually can get the same result or similar result in the out of sample test we can have a solid edge. It's so important to not to change the rule here. This is the validation period. This is the testing period. Most people say okay but in 2026 we can have different conditions so I will make new rule. No that's the out of sample test. You cannot okay once you have data you should understand what is really important to check and what is not. >> Okay. I will tell you for the second step about the win rate. So before we move on to win rate though you had mentioned expectancy and sharp ratio. Yeah. >> Now as we all know there will always be performance degradation going from the in sample to the out of sample right. So you might get a 1.8 sharp ratio which is phenomenal in the in sample >> that is almost guaranteed going to drop out of sample. >> It's not guaranteed but it it will probably so >> in in practice it very much likely will. So, how does somebody know then if they go from what is too bad if it degraded too much out of sample and what isn't too bad? What is still workable? >> Too bad is if the matrix that we have here drop below 50%. >> Okay. >> Okay. This is a rule because our trading is based on rule. We don't guess anything. I won't tell you I think this so you should try to think like me. No, it's not like this. It's real. So for example if I have an expectancy of 0.2 and this are made in the in sample test and in the out of sample it drops of 50% and we will have a degradation of this >> like or a degradation of 50% the strategy is not solid enough. That's the reality. We will also have a failure test because this is the back test. But a back test isn't forever. You need to optimize your strategy and you have to look at the deg of the you have to look at the degradation of each metrics. Okay, we have a warning. For example, if the if this drop by 30% is a warning that maybe something is changing, so we should lower the risk or maybe this the matrix is going up. We don't know. We have to check with a failure test that is the end of the protocol. >> One more thing, Jay, why specifically is 50% the cut off? >> Because I tested. >> Okay, >> it's it's always like this the response. It's not a rule, a a defined rule. Okay, I tested with that when the matrix drop below 50% the strategy is not the same as the same uh is not the same it changed. So we should understand how to optimize it. So what we can change or changing the model for example. >> Okay, understood. And last thing for expectancy point two for anyone who doesn't know exactly what this number correlates to. I will explain in the wheel rate. So no worries about that. Okay. >> Mhm. >> So let's talk now about wheel rate. >> So let's move on. Do you have any question? Any more question about that? >> Nope. >> Let's move on about the wheel rate. Okay. I know that you that you are watching this see some videos of guys telling my strategy is amazing because has an 80% win rate. But what does it mean we rate itself? As I told you before anything the rate is basically as count because the important thing is if my strategy produce money in a large enough sample and it's not based on rate it's based on expectancy. So we will cancel this. We will never analyze our data with this. We will analyze with this. How does expectancy works? It means the returns of money per dollar risked. So for example, if I have an expectancy of 0.2, okay, what does it mean? That per dollar that I put in the market on average, if I look at the target and the stop, I will get $120. Uh, okay. So what does it mean? If I risk for example $1,000 per trade, my average return will be $1,200. >> So we should we have to start to analyze this instead of the ree because this tells you if the strategy makes money >> this not. Okay. Once we are going now that we are going for the actual data of the strategy we have to look of the we have to check the risk model. Okay most people say that this strategy has a 0.2 expectancy that's it. It's not totally true because it depend in which state of the marketing the of the market the strategy produce this result. Okay. >> Okay. And we have to introduce the concept of regimes that is so important and it's one of the base model of my strategies that I use in world championship. So before this we will use a 2.5 and we will talk about regimes. So our strategy can have a different performance in every regime of the market. Personally I codified four and is the low, medium, high and extreme. So our result should be filtered in each regime >> because maybe our expectancy can be negative here, positive here, extremely positive here and extremely negative here. in in Gianluca when you say regimes I've never seen regimes classified by low, medium, high, extreme. >> Yeah, I did it because I needed to objectify the regime. So this is my personal calibration. We we can say like this and this is what I actually do when I have to look at the market. I say okay in which regimes we are and the only things that matters is of course knowing that this is negative is important but how many sample do we have we will talk later about the sample size because it's it's an important really an important part and in this case we know that in with the with a high regime so when there is high volatility >> we have this and this is the best performers Or we can actually objectify regimes. Yes. >> Okay. Because knowing this for for sure we cannot just use the ATRA because the 8year means the volatility per session. >> Okay. And maybe it's a 30. But what does 30 means? We need to know the 8year percentile. >> ATR percentile percentile. Sorry. Okay. Okay. >> Okay. And let when I work through this you will understand how objective these are. Okay. >> Yeah. Okay. >> That and then put a >> Yeah. >> Yeah. Okay. Great. >> Okay. >> Looks amazing. >> Yeah. >> So when I walk through this you will understand all these how objective this thing are. You cannot have doubt. >> Okay. >> Okay. That's so important. So we have range. For example, if the ATR percentiles plot from zero to 25, this is classified as low. >> Okay. And yeah, please continue. >> Yeah. When it's from 26 to 50, it's classified by medium. When is from 51 >> 75? >> Yeah. Yeah. I always forgot this. >> That's right. >> Is classified Ike. When is from 76 to 100? It's classified extreme. Okay. This is how easy we can objectify the regs. >> And Gian Gian look at how does someone get access to this? >> It's basically a free indicator. Okay. You can also search with the ATR percentile. The settings are ATR length 14. >> Mhm. >> And the and the and the percent percentile length 200. It's easy really. You can classify the regime like this. There are also the model, but this is the easiest one. >> This is free on Trading View. >> Yeah, totally free. You can just search on it. I will write for you the calibration. So length 14 and 200. This is the calibration that I actually use. >> Why do you use that those numbers specifically? >> Because I tested it and I saw that this gives me the best result ever. >> Okay. >> Okay. And it's not because I think so. Okay. It's always because I tested it. It will be always the same response. >> Oh yeah. I've interviewed a lot of guys that just say I think so. Go ahead. >> So h the regimes actually tell you the volatility. Your strategy and your data should be filtered by volatility. And for the next model that I will explain to you that is the meta label, we need to know which is the best regime of our strategy. In this case, we will have high for example. Okay, we have to keep in mind the high regimes. Okay, now we can talk about the risk model because this is the most important part of the strategy and it's it gets it gets really interesting here >> so I can consider >> so you're ready to move to number three just to be clear then this these are volatility regimes >> volatility regime >> and when we see expectancy we're measuring expectancy for a strategy by each regime so it could do bad and low volatility but great and High volatility. >> Totally sure. >> You're saying it's important to make this distinction, right? >> Yeah. Because every day when you open your chart, you should know in which regions you are. Okay. >> It's mandatory. >> Mandatory. Okay. >> Mand mandatory. Okay. Now, let's talk about the risk model. Okay. As I told you before, you don't need to search for a profitable strategy. You need to search for properties of the market that you can exploit. >> My strategy run a high positive autocorrelation. What does autocorrelation means? >> Mhm. >> If we we flip a coin, we have a 50% chance that it will land head or tail. >> That's easy. So when you when you throw a coin, for example, there will be 50% chance that it will land head or tail. And there are they have no influence on the next row itself. It before it lands tail does not mean that ads that ads is more probably. >> This is the point. But we are not we are trading in the market and in the market is totally different. We can have three types of autocorrelation. Zero autocorrelation positive and negative. So zero autocorrelation is really helpful to know because means that your win and your loss are basically random. This does not mean that your strategy is unprofitable but you don't have a memory on your strategy. Okay? So you win and the same chance. So when you win there are no advantage on the next trades. >> When you have a positive autocorrelation of course I mean I strongly positive. >> What is strongly positive? >> Strongly it's a range. Okay. Because usually from zero to two is zero autocorrelation. >> From three to five is basic autocorrelation. for six to eight is strongly strong autocorrelation >> from 9 to 10, it's probably overfit. It's really rare to find a strategy that have a positive autocorrelation of 10. And if you have it, you probably found the holy grail. >> And so, of course, this is a formula. >> It's a little bit complicated. I won't go deeper now but you can just put all the your data and the autocorrelation you can also search for a online calculator. Okay. So >> so you'll show us how to do this later on. >> Yeah. Yeah. I will show you how to do on the platform and what and this range of course is the same for the negative. This is basic negative strong negative extreme. >> Okay. >> What does it mean that when I have a positive autocorrelation my wins and loss cluster. Mhm. >> So for example, when I win a trade, the next one will tend to win. >> Mhm. >> Okay. The next one the same. If the next one is a loss and I have a strong positive autocorrelation, what I can expect from the next trade that the next trade will be a loss too, >> etc. and etc. So I need to understand in which trade I have the best edge and the best expectancy. I will show you also later on on the chart where we will draw a chart why this happens. >> And we need to understand for the meta label that I will show you later which are the trade with the higher expectancy on the strategy. And in this case when we have a loss we have a loss we have a loss. When we have a win, the next trade is the highest expectancy trades of the strategy because the out the loss the cluster of loss just flipped and we got a win. So we know that in the next trade we have an higher advantage than for example this. >> Mhm. Okay. This is so important to understand and I know that this is my best setup based on autocorrelation. We will also rate every setup from one to 10 and we will and we will understand how much should we risk in each trade based on the rating. >> So sorry. So you know just to be clear what I think you just said autocorrelation this is clear right let's say this is 67 down here >> in our return structure for the system >> you're saying once autocorrel once the loss cluster exhausts and flips to a win this second this second trade that comes after the first win when autocorrelation is strongly positive this is your big trade. >> Yeah. Okay, >> that's that's my big trade. Also, if the autocorrelation is the range, I can still take this as a big trade, but I have to risk a little bit less. >> Okay. >> Okay. And in the negative autocorrelation, that is not the case of my strategy, the situation is opposite is opposite. >> Mhm. >> So the strategy mirror revert. So usually when I take a win, the next trade will be a loser. It's not totally like this, but it will be probably We are talking about probabilities. >> The next trade will probably be a winner. So our loss and win does not cluster but invert. >> Okay, this is this is not really common. Is common maybe in the mean reversion strategies not in the trending strategy. I in my career I only had one strategy that was at four of negative autocorrelation but most of my strategy have a positive autocorrelation >> and autocorrelation it is what I search when I actually need to bet a strategy but why this happen because we need to understand everything okay so maybe we can assume that we have a strategy that works in the trending market okay and we are actually in a trending market right now Okay, maybe we take a trade here and we take a win. We close here. >> Mhm. >> We take another trade here, we take a win. What does it mean that our strategy likes the condition of the market itself in this exact moment? So in this case I will win tell you something about the next trade because we perfectly know that the market is in trend and our strategy as a as a positive autocorrelation and perform better in a trending market. Okay, that's so important to understand because once you have this you can squeeze your risk to the maximum level. Okay. So for example in the next trade we take a win another win maybe the price revers okay and it start to doing this okay here even if we have a positive autocorrelation what does it mean that the market is in a range and we are trading a tra a trending strategy here we will probably have loss loss >> loss because the market does not like the condition of the market in that exact moment >> once Once we understand, once we understand risk, we understand what every win and loss mean on our strategy >> and how much we can squeeze on it. Because I told you that this is actually my best trade, the win after the reversion. But I also need to tell you that when I have this kind of condition and I switch to a loss, I won't take this trade. >> And you won't take this one either. >> This one, yes, I take. But this is the worst setup of my strategy because the autocorrelation just shift. Okay. So when I need to take when I have a loss, I knew that the probability of the next trade that being a loss is really high. >> Okay. >> Basically you take a loss and that has predictive utility on what the outcome of the next trade will be >> 100%. So I don't take this trade never. Of course, this I take and because I need to wait for the reversion for the actual reversion of the streak. But as I told you before, this was the other was the best setup. This is the worst setup. >> I'm personally curious. Why don't you take this one? Why don't you just wait for it to come back to a win? >> Because this has the as the worst data on my strategy. This is still profitable. Okay. It's the probability of this being a loser is still lower than the expectance itself. >> Okay. >> Okay. So, I still have some kind of advantage here. Here, I don't have any advantage at all. >> Mhm. >> Okay. >> Got it. >> So, that's what I trade. But if I want to be sure to take all the best setup, I need to I don't need to take this because of course the advantage that I have here is not the one that I have here. Okay? because this comes after a win. This comes after a loser. Okay. So if I want to take reduce my sample size and take all the best trade, I should not take I shouldn't take for example this trade. >> Got it. >> Okay. >> There's there's a couple nice things that we could unpack here. So >> Okay. Yeah. Yeah. So trending market trend following strategy >> positive autocorrelation in the returns of that strategy >> while you're in a trending market with a trend following strategy. Are you using this though specifically in the returns to basically help you figure out with your trend following strategy are we in a trending market or not? >> Yeah. Sure. because it's totally common that when I tend to win, we are in a trending market. >> Okay. >> When I tend to lose, the price start to range. Okay. So, it's totally true what what you said before and it's also easier to understand in which in which not regimes but in which trends we are. >> Okay. And knowing this can actually get a better risk model. Okay. So that's is the autocorrelation and that's one part of my risk model. Okay? Because we need to know and I will see this I will write this if we have a loss a loss if you have a loss then we have to win. This is my trade. Okay this is important for the meta label in the in the other part. So now let's move on with four six with four five six. You have some other question. >> I got one more. >> Sorry guys, don't kill me in the comments. All right. >> Okay. >> Look, how frequent or common is it that you actually have a strong positive autocorrelation in the returns of a system. >> It depends if you know what you are searching for in your back test. when I do back test and when I test a strategy I as I said you before I search this okay I also I can also I I can also sacrifice some of my setup some of my entry model but I need to search properties I need to search property of the strategy not the profitability itself because the profitability is stable this you can exploit it >> okay and one more thing yeah will you show me later because what's going to happen generally with auto correlation, right? It's going to go, oh, it's going to be all over the place here, here, here, all over, you know, over time. Do you have a method that you can show later to know that even while autocorrelation is fluctuating, you're you should stay locked in with the strategy? >> Yeah. You mean know how to calculate it? >> Well, yeah, because autocorrelation is always changing, right, based on So, how do you know, >> let's say you're in a seven and later on you're in a one. Yeah. >> Right. How do you know? Okay, stick with this. >> Okay, >> you know what I mean? >> Yeah. So the calculation I can explain also to you. It it's basically a compare of two model conditional and unconditional rate. >> Okay. So your question is all to actually know this number. >> Uh yeah. Yeah. The question is you know autocorrelation depending on how far you're looking back or again where you are um in the price moves itself you autocorrelation will be fluctuating up and down right so how do you how do you know that >> let's say autocorrelation was a six seven or eight and then it moves down near zero how do you know okay this will come back I should stick with this strategy >> you know what I mean >> yeah yeah totally Understand? So we basically use the same concept of of the degradation of itself. >> Okay. >> So if we have for example a autocorrelation of eight okay basically I didn't told you but the the autocorrelation is the compare of the unconditional rate unconditional win rate that is basically your normal win rate and the conditional win rate. The conditional win rate is actually if we have a sequence of win and loss, we don't need riskreward. Let's assume that we have a 40% win rate, normal win rate. >> The CO rate will take in the calculation all the trades that came after a loss. So we will see this one. We will say this because it came after a loss. As you can see here, we have a loss. The next trade came before came after a loss. So it it should be taken on our data. This win came after a loss. It should be taken on our data. So in this case we have one two three four five six two out of six. Okay. We just compare the percentage of this and the percentage of this and we will land in one number. >> Okay. >> Okay. This is how we basically calculate this. >> Okay. >> And uh what we have to understand is the autocorrelation is a little bit different. We don't we use the same concept of degradation. So if our autocorrelation go from eight and it degradates itself from 50% it should come to eight to four. >> Mhm. >> It's still auto correlation. Okay. >> But is a less stronger one. So we know how much we should risk. We need to understand that >> oh this ties into how much you should risk. >> Yeah, got it. >> We need to understand that autocorrelation itself it's not the advantage of the strategy. It's a properties of the strategy. So even if this comes back to zero does does not mean that we don't have an edge. Does this mean that we cannot exploit this property anymore till we have enough sample to validate again? Because maybe in the other 100 traits it goes back to five. Okay, we basically needs 100 trades for validate autoorrelation h for revalidate autocorrelation and if it comes back to five we know that we have auto correlation again. >> Got it. Okay. >> Okay. >> Yeah. Okay. That's it. That's all I got. We need to understand two more things be before we move on with the strategy and one is actually correlated to the regimes and the other one is correlated to our trigger. >> Okay. >> So the first so in this case is the four is the regime freshness. The last is the price. >> Okay. So let's start with the regime freshness. Okay. We already understood regimes what they are what we are how we use them. But we need to ask one more question. Does this regime is this regime actually changed? Is it old? Is it mature? Is it new? Is it what? Okay. So we can actually get this data. Okay. And why we need this data? because our edge perform better when the edges when the regime is fresh. >> Okay. >> Okay. >> So, it's another condition that we need to understand for the rating of our setup. >> Okay. And lastly, the price efficiency that is related to the trigger. But let's understand how we can actually doing this. we need to use a concept that I don't know is if is well known in the trading space but is that the basian online change detection will just measure the freshness of our regimes okay and we need to understand which which are the best performance of our strategy in each range okay it's basically an indicator you can always find this on um on the trading view >> okay >> or you can also do the calculation alone because our strategy is not based on indicator. You can calculate the 8year percentile by yourself. You cannot calculate this by yourself. It's difficult. It's difficult but you can. Okay. So this will is will get our life easier and will tell us with a level the freshness of it regimes. >> Okay. So this is free on trading view. >> Of course it's all free. >> Okay. So this will plot on our chart some values. Okay. And it's called length. We will plot it will plot on our chart a value that is called regime age. This value can go up from zero to 100. >> Okay. >> I classify this into some range and is fresh. Okay. This I did it by myself. So it's not like this always. But for my calibration I need to objectify and give of on this number some kind of range. Okay. >> Mhm. >> So from zero to 30 it will be fresh reg from 31 to 60 it will be measure. For 61 till 100 it will be old. >> And this is going off ATR percentile. It will measure the regime based on ATR percentile. The indicator can do that. >> Yeah. Yeah. The indicator can do that. It's totally easier. You will find this on trading view. You can just search for this. And uh you have to check for this. >> Okay. Once we have this, we need to respond to the question in which range our strategy perform better. >> Mhm. >> This is the range. Okay. We need to know this also for the actual uh rating. Okay. Once we know this, we can go with the last part and then we can go with the model. Okay. >> And is there a possibility that the strategy could perform better in an old regime or mature? >> Yeah, of course it changes. >> Okay. >> Every time you go up 100 trades, you should recheck this. >> Okay. >> Okay. >> For your strategy personally, it works best in the fresh >> for my strategy. I the strategy that I will tell you later is the strategy that I use in the championship. And all of this will higher or lower my risk. For example, if the setup is unmature, it will not get the point of this. >> Okay. So, the setup will be with a with a lower hel for example. >> This is for your one to 10 rating. >> Yeah. >> This adds a point if it's true. >> Yeah. If points also the regimes add points also uh the the autocorrelation adds a point. We will see later. >> Excellent. Excellent. for the price efficiency. What I usually search for is this. Let's assume I'm actually seeing my trigger right now. So, I have a red candle here, another red candle here, and a buying candle here. All the previous condition are codified and it's all good. Okay. Uh this is only the trigger. We need to understand a concept that is called price efficiency that compare price and volume. Okay. Let's assume that we have this kind of engulfing. I don't care about the engulfing itself. I care about how much effort it needs to produce this kind of result. For example, here we will have the volume like this strong cell volume. Okay, we will have a average. So a simply MA you can put the MA in 20. And what we see that with less effort, okay, for this volume, we got a higher result. Mhm. >> That's my actual condition of entry. Okay. And this is the concept of price efficiency. So when I search a trigger, I search for this. I have also under condition because maybe this is not actually always like this. Maybe in this case I have the volume that are still high. So over the AMA and what I use is looking at this. Maybe we have another candle here that is going up. He did the engulfing of the previous candle and the volume are going lower. What does it mean that with less volume we are obtaining lots of result? >> Yep. >> Okay, that's where I enter the candle with stop loss here. >> This is part of your this is your actual >> this is my actual strategy. >> Okay, so everybody calm down. So, so um so you're actually looking for there to be a disproport basically it's disproportional the result you're getting compared to the effort. You want low effort big result. >> Yeah. I want to have a low effort big result. >> Why? >> Because that's the condition I tested. >> Okay. Okay. >> I know. But when I have this kind of condition my expectancy raise. >> Okay. >> Okay. This is actually the best setup. Okay. And we will call it reducing volume versus low effort. We need to name this because one other point of the meta label is is this my best setup based of volume. If is in this case we add a point. >> Got it. Okay. So we will see all the behind part of this. So when we actually have to search for this but we we have to understand this kind of concept it's really easy this as I told you before the advantage is not always the strategy okay it's what we use and what we model and how much should we risk in each setup >> Ga just to be clear is this >> the effort and result is this objectified >> yeah this is totally objectified because if we have an engulfing we need to search for this engulfing okay and we need to have it's not important if we are over the EMA but we need to have higher price lower volume >> okay >> it's totally objectify also the low effort we need to have a candle that is actually that actually made an engulfing of the other one okay and it has to be with a low volume okay so lower than the EMA. >> Mhm. >> Okay, that's what we actually use. As you can see, there are no I think so there are no maybe is this and that's it. >> Okay, got it. So, you can even take the engulfing long. >> Yeah. >> As long as it >> engulfs the previous red >> and volume went lower. >> Yeah. And the entry will be on the closure of the candle with stop below that candle. >> Stop goes at the low of that engulfment. All of that engulfing not of this, of this. >> Right on it. Right on that low. And where's the target? >> One to two. >> Oh, you have an RR rewarder. So, so it's always one to two. >> Is the optimal target. I tried one to one. The expectation was a certain level. I tried one to two was a certain level and I tried 1 to three, one to four, one to five and the best result was 1 to2. >> You tested it. That's why I already that's that's the reason why. Okay. I was just making sure. I didn't know if there was some hidden agenda. But but the question I will show you when I go on the actual when I draw the chart that we have some re-entry model it's not finished. Okay. We can continue. This strategy is based on momentum trading. >> Okay. >> Okay. So we will continue the setup. >> It's not it's not ended. Okay. >> Okay. >> So once we understand this we should understand how we can rate a setup. Okay. And the process itself it's called it's okay with this you have so many questions. >> No no no no no it's yeah I've asked enough >> and it's called meta label. This will take five question and we have to point a yes or a no. Okay. So the first question is is this setup in my best regime? So as I told you before the best regime was I volatility. >> Maybe the setup is in I volatility. >> So one point. >> Excellent. >> Okay. The other question is is this the best trade based on autocorrelation? As I told you before the best trade was this loss loss win. >> Got it. >> This is this trade. Yes or no? Maybe it's yes. >> Okay. >> The other is the freshness. So is the best freshness of the regimes. So it's in a major regimes, old regimes or I in fresh regimes. >> Mhm. >> Maybe it's in the fresh one that is the best condition. Okay. So we'll add a point which price efficiency is in a reducing volume or in a low effort. Is in a reducing volume. Yes, we had a point. >> This is specifically for your strategy though. >> Yeah, but you can also use for your for your strategy itself. Yes, that is basically for my strategy. But I will show you how the strategy works. And the last the last one is in which session we took it. I didn't mention this because it's really easy in a new year session. I higher advantage than London session. >> Okay. >> So if the session is the New York, we will add a point >> based on testing, right? Yeah. Should everyone with any strategy ever be cons try try to distinguish where >> yeah the session is really important because also if we as I told you before we check of the expectancy in each regimes we should check in the expectancy in each session. >> So in this case we will have a five to five. So this is my best setup that I can actually trade on my strategy. So I will allocate more risk. >> Got it? And my risk depends on the Kelly number. And the Kelly number is basically the mathematical perfect risk that you can apply on your strategy. But the full Kelly is always too much >> for Kelly is absurd. >> Yeah. >> Yeah. >> Because it it it assume that the strategy never changes. >> So with this condition I won't suggest you a risk because it depends if you're trading prof if you're trading uh some kind of championship, if you're trading personal account. But what I you what what I use in the championship is that when I have five to five I use half Kelly >> half kell. >> Yeah. >> Really? >> Yeah. >> That can still be quite high. >> It can be. I mean >> Yeah, it can be. Yeah, but it's not totally it's not always like this. >> Okay. >> When I have four, I use one a quarter. When I have three, I use N and two. >> This is a fifth. >> Yeah. >> Okay. I use a one six cali. >> Okay. >> Okay. This is how we optimize your risk. >> Okay. I'm curious though because you said 55 4 5 3 525. Even if you have two out of five true, you'll still take the trade. >> Absolutely. No. I have the advantage. So why not? >> Okay. Got it. >> Why you shouldn't take the trade if you have the advantage? Y. Okay. Also, if I have one to five, I will take the trade, but I will risk so less on that specific trades. >> Okay. >> Okay. >> Ever thought about getting into prop trading? Perfect timing. Right now, we have the perfect offer for you. You can grab a futures challenge or crypto challenge for just 9 bucks. Links in the description below. Now, back to the video. >> So, now we can go deep on the strategy. We talk about everything that we need to know. So I can explain in a very good way everything and you can understand it. >> Okay. >> Okay. Do you have any more question or I can cancel? >> Cancel. >> Okay. So for the strategy you will be very surprised and how easy is this. Okay. So first we have to recognize a trending pattern a trending situation. Okay. How we objectify it through volume profile. Okay. Okay. >> So, for example, we have this session and we have a volume profile that is like this. It's not like it. Okay. This is the value area. Yep. Okay. And in this developing volume profile, the value area is higher. So, for example is this the value area is this. I know it's not the best volume profile that you ever seen, but it's okay. >> Are these session based or >> Yeah, it's session based is the volume profile. Session based HD in trading view. >> Okay. >> You can use in trading view, you can use in order for platform. It doesn't matter with this with the poke with I of Poke. We recognize the structure. You can objectify in a 100% way with this. >> Okay. >> Okay. We need to wait once the price reach the value area of the previous session. So when the price actually came here. >> Got it? >> Okay. This is where we look and we say okay maybe we can have a trade. Of course the price must be still long. So if this is our level that take the long this should not be broken. It must be valid. >> The lower value. >> The lower value. Yeah. the the lower point of the of the >> market structure >> market structure. Got it. >> Okay. So, we just need to understand the lowest and the highest point and we need to see when the price comes here. Okay. Let's zoom in. Let's zoom this part. When we have this, what we are searching is basically this. So, this is the range of the value area. The price comes here back into the value area >> value area of the previous session. >> Got it. >> So this and after break the level. Okay. when we have the break of the level. Okay, we will just see for the price efficiency. Okay. Okay. So in this case, what are the volume telling us? The volume maybe are like this. So we have a confirmation by volume. >> Okay. And it's basically so simple because every time that we have a trending market, we have to wait till the strategy till the h the market comes in the value area of the previous session and it's break it. >> Okay. >> Okay. When it breaks it, we just need to see if this is actually our trigger by based by volume. >> Okay. >> Let's assume that this is our trigger. what we have to do first we should know how much we can go okay how farther the price can go. So for example if the this is the high okay and we are analyzing this situation okay and the we are tra we are taking a trade here we know that we can take each trade till this level >> the maximum of this level >> the market structure high >> yeah the market structure high >> I I do have a couple questions >> yeah don't worry about that >> so as long as the value area low of the previous session is not violated. Yeah, >> this is active. >> This is active >> an active setup that can be taken. If this is broken, >> yeah, >> the whole thing is done. >> Absolutely not. >> We need to understand which is the level of the market structure that takes actually the long. >> Oh yes yes yes. >> So as I told you before this is the value IO. Okay. This is the level that actually takes the long we can say from the market structure. Mhm. >> Yeah. >> So I will draw it better. >> No problem. >> So if this is the value area, we just need this. We don't need the poke. And maybe we can assume that the the low the low level lowest level is this. >> When the price comes here gives a specific pattern. Okay. Even if it breaks this level, it does not matter. >> Okay? Because we have still this level >> low. >> But we cannot see every engulfing here. We need to wait for the engulfing that breaks this level >> above the high above the value area high. So this is always taken at a break above the value area high. >> Absolutely. Yes. Okay. >> Okay. In this kind of situation, we have to look of the in the volume. Okay. We can see that maybe the situation is this from for these three candle we have the AMA of the volume here we have volume here volume up for from this candle and volume like this from this candle >> this yeah this isn't your falling volume though right >> so so what we have to do we have a double condition because the volume are falling >> okay >> and the price is going up and the volume itself it's lower than the EMA. So does it what does it mean that with low effort we are taking I result. >> Mhm. >> So this is the combination based based. Okay. >> Okay. So this can be a trigger but we need to understand how we can place the stop how we can place the trade and as I told you before it's basically the same. So we take the trade here with stop loss here and target one to two >> there's how do you define effort though are you doing open to close are you doing low to high >> the effort just the >> the result I apologize the result >> the result it needs to do the engulfing of this >> okay it okay >> so it's totally objective because if you have this kind of volume you have an engulfing of this candle this is the condition of the low effort high result. >> Okay, >> if this candle does not have the engulfing of this candle. Okay, let's assume that this candle is lower than the previous one. This will not be the setup. We have to wait one more candle. >> But when you say engulfing, you just mean it opens and takes out the high of the previous >> the highest week in this case. >> Not not like a bullish engulfing. >> No, no, no. We need to take the highest of week. >> Yeah. >> Okay. I can for example this maybe the longest week is here. >> Got it. >> Mhm. >> We have an engulfing because the body >> close above that. >> Okay. >> Okay. >> I understand. I just want to make clear one more time then the result the candle size does not matter. It's about taking out the previous high. >> Yeah. >> That isn't the result that we're looking for. That's totally right. >> And then effort is just falling volume that matters. The size of the volume matters, not the size of the candle. >> No, the size of the volume. Got it. That's right. >> Yep. >> So we need we know that in this condition we have an expected movement through this level. >> So we are targeting this level. Let's assume that with this operation we take target. Okay. Our price get in and it's match the target. We got to but it's not finished yet because we still have space work >> and maybe we can see that I will do it bigger. So we took the trade here with this stop loss and we took target. Okay. Okay. Maybe in one candle or two. Okay. What we can see that the we have still space and we will see for the sec exact same condition of this. So these two candles we have some kind of volume inefficiency. Maybe the volume of this the EMA is this but the volume are still decreasing. >> Mhm. Above the EMA. >> Yeah. Not not above the EMA because yeah it's still above the EMA but they are decreasing and the price is going up. As you can see we actually made an engulfing again. >> Yeah. >> So we can take another trade. >> Really? You scale you you Okay. Okay. >> Here target one to two. Same trade but it needs to start with the first trade. If we don't have the first trade that is with the break of the value area high of the previous one, we won't take continuation trade. >> Got it. So if you don't take this trade at the value area high, this whole thing, no matter how much it chains, it is done. >> Yeah, totally. >> This could be massive profits if the whole thing works. >> Yeah. >> And it works out like like that. >> Trade, we should do the meta level check. Is this the best condition of um my volume? Is this the regime freshness? Because when you take continuation, the regime is mostly the same. The freshness is mostly the same. So you usually take advantage of this. Okay. >> Okay. It's a momentum strategy. So, we have a low stop loss, low low target. And you all do this into the 50inut time frame. >> Got it. >> You don't switch time frame. That's so important. >> You figured this out from testing. >> Yeah. Okay. >> You analyze and you entry in the same time frame. That's so important because if you change time frame, this will be different. >> Okay. This will be different. >> Absolutely. Yeah. So, so this then you're going to take this all the way up until this market structure high and then it's done. >> Yeah, we need to wait for another session that will return in this kind of value because if the price from here it goes up >> the previous previous value area will be this. >> Okay. And we need to wait that the price will return here. >> Just to be clear though, you might still have a position open while this market structure high gets reclaimed. No, we usually take the last target here. >> If you do have a position open, it's all closed right here. >> Even if the target here >> is not one to two, we take less. >> Got it. >> Okay. So, we can open a trade also with a less riskreward, but we cannot go above this eye. >> Okay. >> Okay. >> Got it. And and then what if on this way down earlier in the move, you took out this market structure low? >> It's totally invalidated. >> Just forget the whole thing. Don't even you can choose another asset. >> Why specifically though? Why if it takes out this low? >> Because if it takes out this low, it returns and it gives you the trigger. That trigger has a negative expectancy. >> You tested it. >> Yeah. >> Okay. >> Okay. >> I got to ask. So final question though is a lot of people define market structure highs and lows very differently though. >> Yeah. >> Now is this part objectified? Because this is one of the hardest things to objectify. >> Totally sure >> it is objectified. >> It is objectified. >> So how do you do that? >> So I we we have to study a concept valid against not valid candle. We will search for a valid candle. Okay. Okay. We will have this kind of candle. Okay. Because your question is so smart because you actually intend to objectify anything and we objectify this but we didn't objectify this. >> So we will call a valid candle a candle that has an higher body sides of the highest of the longest week. Okay. So for example the size of this you can measure on trading view. Okay with a rule and with a magnet. The size of this is four. The size of this is three. Okay. So four is above three. So this is a valid candle. This maybe we have three here and six here >> based on ATR or >> no based on just the measurement with the magnet. >> Ah okay. >> Okay. With the numbers of tick they moved >> the number of ticks. >> Yeah. Okay. Okay. With trading views. Okay. >> Yeah that's easy really. When you have this let's analyze a trend. Okay. you will know that everything is always like this. Okay? >> Etc., etc. We need to take in this case the valid short candle before the breakout. So for example, here we have in the I will make it bigger because it will be cleaner. Okay. So we will search for this breakout structure. Okay, we need to search in the 15inut time frame each short candle before the movement. Okay, so in this case we have a little retracement here. >> We will search for one single valid candle short. Okay, >> the closest to the breakoff structure. So in this case maybe we have this candle that is I will transfer this that is this as you can see the longest week is higher than the body so it's not valid here instead we have a valid candle so if we zoom in we will have a candle like this okay the body is higher than the longest week. So this will be my level. >> That's your market structure low. >> Yeah. >> I've never seen anyone do it like this. >> You you never seen >> No. No. I mean, >> but you need to objectify the concept. >> Yeah. >> But the question is if here we don't have a candle valid and here we don't have a candle valid. What we should do? >> Yeah. >> We go here. >> Okay. >> Okay. So we search here. For example, we have this kind of the closest can be this and this will be the the break of structure low. So the break of this means nothing. >> Got it? >> Because we don't have a valid candle here. >> If this one is valid, assuming that one is valid. >> If this one is not valid, we go lower. >> There's no exceptions where this doesn't happen. This has to happen, then it's valid. >> Because you need to objectify the range. This is my lowest. This is my highest. Maybe we have the breakout structure and here we have the candle valid. Maybe also this candle is valid. Also this candle is valid. But we have to take the closest one to the breakout. >> Got it. >> So maybe the level can be this and once broken the price goes short and the and our validation is still not valid. >> You do the same thing for highs. >> Yeah, >> very short. I'll have to code this as an indicator. You >> I already did it. So, >> so, so then, okay, last thing, everything is objectified here. >> Um, volume profile, this is sessionbased. Last thing I want to ask, I know right here, this is a really clean example, but I know this can get really messy, right? I mean, you could stay right under the valley area high and, you know, little tiny candle comes above it, falling volume. There's got to be a something that invalidates the trade here, is there? So basically when the price comes down don't break the lowest and go up the trade is always valid. It's it it has a positive expectancy over the last three years of data. The only thing where I don't trade the trade is when there are some some some kind of news >> NFP, CPI, some kind of news during the trigger. In this case, I prefer not to trade because also one filter that I made is does my strategy perform goods perform good in a day with lots of news. >> The result is no. >> Got it? >> So, I usually don't trade. But when you have this you can objectify to the 15-inut time frame you it will be always always uh always tradable. One last thing that I have to tell you before is as I told you we have measurement. Okay. >> This is not never 63 is 0.6 0.3 0.3 0.4 usually. Okay. Yeah, >> when we have to break this level, okay, the price here and here, this distance should be 0.6. Okay, so the movement of ticks from the value area to the closest of the candle for B valid should be 0.6. If it's 0.4, it's not broken anymore. Okay. >> Okay. Interesting. So, how much it closes over the value area high >> 0.6. >> Yeah. >> Um in uh sorry, >> trading views measuring tool. You'll have an example of this. >> Yeah, for sure. >> Okay. Just Yeah. Yeah. No worries. >> Okay. Awesome. So, if it gets small little, you know, crappy candle, this is done. >> Yeah. Because maybe it's 0.4. So, we need to wait the other candle. >> So, if it comes back down and then 0.6 is up, >> it's okay. then you'll take it. >> It's okay. >> And but if it's 0.4 is just up up up up, you don't take it. No. >> Even if you miss out on everything. >> So that's the only invalidation criteria that >> Yeah, that's the only validation criteria. >> As long as you simultaneously take out the high of the previous candle, >> close above the value area high on a 0.6. >> Yeah. >> And have falling volume from the current candle to the previous. >> Yeah. >> That's the entry. >> That's the entry. I will show one setup now. >> Okay. >> And I will show you the data behind this. >> Excellent. Please. Yes. >> Okay. >> That'll clear up a lot. >> I'm just kidding. >> Okay. Let's go to the chart. >> Yeah. Okay. So, let's analyze some setups of this in the practical part. Okay. Let's analyze this setup of NQ. And in this case in this session what we can see that the previous session and the this actual session we have a shift of the value area. So we classify this as a as a trending long market. Okay. So what we have to do is wait. Okay. As you can see in the developing, okay, as you can see in the developing of this session, they are all above. Okay, we should to understand our point of control. And in this case, as I told you before, we need to check the closest sell candle valid. How we do this? We have all green candle here. Green, green, green. This is the first candle, red. Okay. But as you can see the body is lower than the longest week. >> Okay, >> you can see it. Yeah, right. >> Okay, so it's not valid. You we can also measure this. We can take this and this. And as you can see the distance between the body is 16. The distance of the week is 56. So 56 is higher than 16. So it's not valid. After this we search for the other candle. This candle is not valid too. We can see by I. This candle is not valid too. We can see by I. This candle not by not valid too. This is the first candle >> that is valid because the body is 54 and the longest week is this. Then this and this probably 30. No, 24. We have a candle. So, we don't need to go behind this level. Okay. And in this case, we will take the lowest point of this point in general. And in this case is this. We don't need to check if this candle is valid. We need to take this candle and take the lowest level. So, we don't do this. >> Okay? But we do this. >> Okay. So the lowest level. >> Yeah. >> Okay. >> Lowest level that we can actually have. But if you see this is the first candle. We don't need to look at other candles. >> Okay. >> Okay. Because we just need one. >> Okay. >> But in this retracement, of course, we will have one. It's probably like this. It's really uncommon that we'll go down to search for another candle. So, >> so then if if it was here and sorry, this is hard to see. If it was here though, >> yeah, the >> would this be ineligible because it's just already been traded through? >> No, this will be eligible because it's this retracement. This is other retracement. I have to search for a valid candle here. >> Okay. >> Okay. So once we have our point of control, we can simply wait for the market to to to come in the previous value area. Okay. So in this case the previous value area is this. We will just take this zone and we will take out this. We don't need it. Now we need to wait for the price to come this to come here. Of course we will do our check for the regimes. As you can see we can see the regime age in this case here is 60 bar. So it should be mature or old. Okay. And let's search. Let's wait for the market to come here. Not yet. Okay. This is the first. As you can see the price entered here also with a week is okay and get a reaction now we because it broke also the level it touched and broke this close above the eye we can see the volume is not confirmed by volume this because the volume are going up the volume are not lower than the EMA so we don't have the confirmation that we need to enter. >> Okay. >> Okay. So, we just wait. We wait. >> And that means it's okay for price to not have closed in the value area. >> We can just touch it and if it engulfves and you get the lower volume. >> Yeah. If we took this trade, it it will be a stop loss, >> but our condition was not met. Okay. So, we totally understand that this wasn't a trade of the strategy. What we can see here that the we don't we don't have any engulfing yet. We have the first engulfing. We have to search if this engulfing is valid or not because it's not like this look like an engulfing. Is this is an engulfing yes or no. So we measure this as you can see is 24. I told you 0.6 is for forex. Six is for in this case NASDAQ and 24 of course is above six. So we will take this trade >> and volume falling. >> Why? Because if we see the last two candle they're going up the last two green candle. Okay we have a closure above also this we can measure but if this is 24 this will be higher. So it's for sure above six. And what are the volume telling us? That they're going lower. But we still don't have the break of the level. So it's premature. Okay, it's an int. But we need to break this level. So we have to wait again. Not yet. Not yet. Not yet. Not yet. We just wait. And as you can see, if we took this trade, it would be a stop loss again. but was not met the condition. So, we just wait. And now maybe we can have this trade. As you can see, this is not a really beautiful candle. >> This is a great example. Yeah. >> Yeah. >> Okay. >> But we don't care how beautiful it is. We care it's reached the value. We can just see first we can just zoom in and we can see if the engulfing is six is three. three is not six. So, we can't take the trade yet. We need to wait. But we have the break of the level. We can just measure. It's five. So, not yet. >> Okay. Not yet. Now, we have the break of the level. We have the engulfing for sure. Of course it's more than six and we have one condition. The volume are going up but they are below the EMA. >> You see this? So one condition is met. The break of structure the break of the value area happen and we have the volume low effort big result. >> Okay. So we just take the trade here. One thing I want you to clear then obviously is >> we wanted volume falling but if it's not falling if it's below the EMA >> is is the other price efficiency. >> Okay. >> Okay. What is our target? We are aiming for this. Okay. That's obvious. So we will keep taking trades till this level if we can. So we have an market entry. So we are already in this trade. The risk reward is one to two. Okay, it's one one to one to two. Let's see what happens here. We just have to wait. What we saw, we took target, we gain true error, but there are no condition of entry because the volume are going up. >> Yeah, >> the candle are going up and the volume are going up. This candle that did engulfing is not below the EMA. So we need to wait. Got it? No engulfing. So even if we have some condition, we don't have the engulfing. So we need to wait. Engulfing first. Engulfing is this. Okay. You see the engulfing of the previous candle. We can check but is for sure above is 25. It's okay. So we can simply take another trade stop loss here because the volume are below the EMA one condition is met. So we aim for another one to two and we take target with one candle but we cannot take another trade because volume are going up. This level is about to be reached and of course this is high result high effort. >> So we just need to wait one more candle and in this case we cannot take trade anymore because even if our condition is met >> it already reached the eye. >> Got it? So as you can see the strategy is totally objective and what I'm about to tell you now is how we can measure the data the data in this platform and will probably leave you speechless because it's for me it's amazing. As you can see here, we have the strategy. We gain 147R in two years and we can see all the metrics below. Okay, for example, the expectancy, the sharp ratio, the payoff, the sortino, everything. As as you can see, this is the risk that we used and this is the cost that we actually use. This is an appro appro approximation. This is an approximation of slipage, cost, swap and etc and etc. And as you can see we have the rolling expectancy. What does it tell to us that the old track record has a rolling sharp rolling sharp ratio sorry not expectancy that the whole track record is 2.2 on the rolling 60 trades is 2.05. So we have a decreasing of 7%. Mhm. >> Okay. We can see the same thing of the in this case expectancy we have a 0.2 and the average of the 60 trade is 0.17. And the cool part is we never talk about prof. Okay. But is this profable in is this strategy applyable in prof? This is the question. Okay. So what we will do is just take the profform section. And uh we will try it on your prof. >> Hold on everybody. Okay. >> Yeah, I know. It's it's amazing. We will see because we didn't talk about that, but profing and trading are two different complete games, >> right? >> And uh for example, here we have a list of future prof. Tell me which one do you prefer, core or rapid? You just do core. Okay. Let's run a simulation of 200 challenges on your prof to see how many we can pass and how many we can bust based on this data. >> Who the heck put this in here? >> What? >> Who put this in here? >> Me. >> Come on. You're killing me. >> Let's see it. Okay. Oh, looks very You ever seen an uh EDM festival? >> Yeah, that's so cool. So, in this case, we will pass 40% of the EV of the E of the evaluation. And what does it mean that in our best scenario, we pass 92 evaluation out of 200 and we lost 108. So, we spend almost $10,000 to gain $184,000 of drill down acquired. >> Nice. Yeah. >> And in the average scenario, we just um spend the same, but we gain $162,000 of draw down acquired in profer challenges in funded, of course. And in the worst scenario, we pass 71 out of 20 out of 200 and we gain 142,000. And the interesting part is that this trading strategy is built for championship not for prof. Because in profform is so important the frequency of execution. >> The frequency of execution are more important than the expectance itself >> because the higher execution you have even with a lower expectancy the more money you can get on challenges and funded accounts. We're gonna have to cut this part out. >> Listen. Yeah. Listen. >> Do you have a simulation for when they're actually funded? >> Yeah. >> You want to see it? >> Yeah, please. Absolutely. >> Okay. So, this is just to get one payout. >> Yeah. >> Okay. So as you can see in the worst scenario we spend 36 $35,000 and we gain if all the payouts were of course good like we expected all the rule we can get 600k Okay. >> Okay. >> Okay. >> In the worst scenario considering if you buy if you get funded 200 times. >> Yeah. You this is based on 200 times. Most people use proform like okay I'll buy one. Let's see what I got. But in promir you have to use a model. If you use the same strategy that you use in championship in the promir you are leaving money on the table. That's 100% accurate. >> Just to be clear G Luca this is 200 times getting funded. Right. >> So this ignores the challenge >> of course because if you see we spend more. >> Yeah. Yeah. >> So this is in 200 funded accounts. >> Okay. >> Okay. But of course this does not count if for example we break some rule and we don't get paid. Yeah. >> We this assume that we are doing everything perfect that we always know that you have to trade manual so you will make some error. But this is what you've get you've got with the strategy that I actually told you in this episode. That's amazing. >> Yeah. >> And and and this is the strategy that you use to win all the world championships, beat all the veterans, everything. >> Yeah, it's so easy to understand. But the model itself also we can see as I told you before we can go into the autocorrelation session and we can see that our result are using cluster wins follow win losses follow losses. The memory strength is 7.9 and is 100% sure. So, as I told you before, after a win, we have a 52.5% that next trade is a win. >> This is beautiful, but I have a couple questions. >> Yeah, no worries. >> Someone who is new. >> Yeah, just forget that. They can't do this if they're brand new. So, Oh, yes, you can. But um for someone who's never looked at this stuff before, Yeah. >> take everything you you talked about on the whiteboard and look for that >> inside of this kind of software. Yeah. >> Right. All of that is inside of this kind of software. >> But did you upload your back test data to this manually? Yeah, you have to upload this manually or you can just simply uh take your Metatrader account, download all and put it here or uh take one broker statement, put it here and it will analyze it. >> It'll do it all. >> Yeah, >> completely free. >> Uh no. >> Oh, come on. We love free stuff around here. >> How do we do the free one? >> Okay. Um Okay. So, just Yeah. I just wanted to make sure it was clear for anyone who was potentially interested in this how they could actually do it, you know. >> Yeah, this is just the calculator. You can also build your own journal. We can call journal, but I prefer terminal because it's a lot of more complicated than a journal. You can build your own terminal. You can calculate your own data, your old metrics with your own data. And you can actually have something like this. At least you need the memories. You need to calculate the autocorrelation. The regime is not too complicated. This is just reorganized. >> That's the the accurate part. >> Does it actually require this deep of a look to be successful? >> No. >> Really? >> No. No. No. No. >> You can be profitable with less than that. But if you want to gain percentage in every high percentage in every quarter, you have to know how much you can squeeze it. >> Okay? You have to know for example the Monte Carlo analysis. We didn't talk here but it's amazing how we can actually see in 10,000 shuffle in how many of them we lose money. We lose money. What is the average scenario? What is the best scenario worst scenario? Okay, we need to understand that because even in that we have 41 on 10,000 shuffle order that lose money. Okay, so in the worst case here we can make 15 are in negative but it's 41 out of 10 10,000. >> Yeah, it's very yeah >> but you have to know that we didn't talk about that but it's fundamental. >> So the minimum reproducible version for someone who watches this and goes I this is what I need to do. Yeah, >> everything you talked about on the whiteboard you would say. >> Yeah, I agree. >> It's the minimum repetition >> is the minimum. But you can that you that you are watching this right now, you can copy this and you can apply it tomorrow. You just need to do the back test. You just need to analyze it, see the result and then you can trade. >> Okay. And what if I took your strategy and started trading in the world championship with it? >> Let me know. >> Let me know. I hope that you don't do it. >> Ah, nobody else do it either. I don't think so. >> But um yeah, you basically can. >> Okay. Excellent. >> You basically can. >> Awesome. Is there anything else? >> No, that's all. I think that we did lots of things and in this episode and um >> one more question. Yeah. >> For someone who wanted to get more oriented with what all of this even means. I don't know if the software actually describes what is actually going on with all of this and how to interpret it. But where can someone start to get and with no programming, no tech experience, where can they start to even begin understanding what this kind of information is telling them? >> You have two way. First, I do free education on YouTube explaining all of this. Okay? >> So, you can search my channel. I >> This is my model. I need to explain why does it work and do I education. Either way you can read books of statistical analysis. There are few there are really a lot. >> Mhm. >> Okay. >> Any recommended books? >> I forgot the name. Wait. >> Is it in Italian or is it in English? >> No. Is it in English? >> Okay. Great. >> H I think that is called the Eden Mark of model. >> Ah okay. >> You you know it this is I I don't remember the exact name but it talk about that. >> Okay. >> This is really important. >> Mhm. So you can either search for books of statistical analysis. You can either watch some of my videos. It's up to you. >> Okay. Well, Gian Luca, I mean, we went through the validation process, how to squeeze as much as possible with a risk model, the exact strategy you use in the championship, and then backed it up with real chart examples and software that can actually help someone know whether they potentially have an edge in the first place, right? And know >> if what variance will look like and what things of this nature, right? Okay. Nothing else. >> I won't say nothing else. I won't I won't say Yeah, I say nothing else. It's the complete framework that I use in the championship is the complete framework that not made me profitable but made me a champion. Okay. >> Okay. So, as you can see the strategy was mechanical. The statistical analysis behind it made me champion. Okay. So, I would say that mechanical trading made me profitable. But the statistical analysis gave me the shift that exploit my result. >> Got it. For struggling traders out there, what's the final piece of advice that you would leave them with? Wait. Okay. Don't trust anyone. >> Okay. It's really important that you never trust someone else word. If I'm telling you that this is the strategy that made me profitable and I'm telling you this is the data, you shouldn't trust me. You should test, you should exploit and see if this actual make a result. >> Okay? So it's really important that you don't put money at risk based on confidence, confidence and the trust. So you that you are watching right now probably you lost money before maybe you are not profitable yet. You just need to find one objective way to make money in trading and repeat it constantly. You don't need to study thousand of concept, thousand of way to analyze the market. You just need one model that is repeatable and you need to know how to optimize it over time. That's all. The more you add, the less results you have. >> Gian Luca, thank you so much. I really appreciate it. >> It was really a pleasure for me to be here. >> Absolutely. We will do something again. Most certainly. >> Okay. IQ Capital. You can start your first challenge for as little as $9. Terms and conditions apply. Check the link in the description below for more detail. Built by traders for traders.