Full transcript (3498 words)
Hi guys, welcome to my YouTube channel and in this video I'll be showing you the trading strategy that I use for my main trading bots, the Derry volatility bot. I use this trading strategy for jump 10 index, volatility 101s and volatility 10 index. I've done something similar to this before but intentionally left out some important details so as to protect the integrity of the trading strategy. But ever since then I've done a lot of upgrade. So I felt like okay let me share the previous upgrade that I was using with you guys. If at the end of this video you find it helpful, make sure you subscribe to this YouTube channel and drop a comment. The first thing you have to do is to make sure your time frame is set to 30 minutes and you also need to on your period separator. In case you don't know how to on your period separator, just right click on your mouse, go to properties and navigate to show under show, you will see this box here uh show period separators. Make sure it is clicked. So this is the period separators. can see all this um vertical dash dash line here. You can see it here. The basic basically the meaning of the period separator is like a beginning of a new day. And if you are using phone, just go to your chart settings. You can also switch on and off the period separator. The reason we switched on the period separator is because we are going to work with this only these three candlesticks which means the first candlestick on the on the vertical lines, the second one and the third one. You see, we are only going to take trades with this zero with this one two three candles. 1 2 3 candles starting from the period separator. 1 2 three candles. Then one two three candles. Those are the only three candles that is going to determine if you are going to buy or sell. So that is why it's very important to own the period separator. Now let me explain how to use the trading strategy for volatility 101s. Right? Remember I said the time frame must be set to 30 minutes and the period separator must be on and we are only going to take trades within the first three 30 minutes candlestick. Start the counting from this vertical line which means 1 2 3. So now let me explain this how to place a sell trade with this trading strategy. Right? You can see that the first candle on the vertical line um was bullish. So we are not going to place a trade because it was bullish candle and we are looking for a sell trade. Right? The second candle was also bullish. So we are not going to place a sell trade. The third candle was bearish which means this is a good bearish candle. We can place a sell trade but we need one more confirmation. Now you know we are looking for a sell trade right and we've gotten a bearish candle within this last three candles right? So now immediately after getting the bearish candle now look for the candle before that bearish candle if it was bullish. So now if you have a bullish candle and a bearish candle which means you must first have a bullish candle followed by a bearish candle. Once you get that that is going to be your entry point. Now immediately you place a sell trade here. Let me use an horizontal line to mark that entry point. Now your entry point is 9501. Right now you are going to add five to that entry point. That is going to be your stop loss. You know for a sell trade the entry point must definitely be above the stop loss must be above the entry point right so you're going to do that so it's going to be somewhere around 955 that is where your stop loss is going to be your entry point add five to your entry point that is where your stop loss is going to be for a sell trade and for a takerit your stop loss is going to be entry point subtract um 35 from your entry point wherever it is that is where your take profit is going to be for a sell trade. Remember the candle that determines the entry point must be within these three candlestick. Start counting from the vertical um vertical line which is the period separator 1 2 3. So the bearish candle must be within this three candle. If you get another bearish candle here after that three candle, it does not validate the strategy. So now let's look for a U buy example. You can see this period separator here, right? So, we are looking for a buy in this scenario. This was a bearish candle. So, we are not using a bearish candle. Another bearish candle, which is the second candle after the previous separator. Now, the third candle, right, is a bullish candle. Right now, we've confirmed the bullish candle. Now, check the previous candle if it was bearish. After we confirmed that, okay, the previous candle was bearish and the and the last candle was bullish. Now, this is going to be our entry point. Now, let me mark the entry point, right? Now your entry point to set your stop loss your entry point right subtract five from your entry point let's say your entry point is somewhere around here right let's say somewhere around here now now add 35 to your entry point you know this is a buy trade right once you let's say your take profit is somewhere around here which means one I think one ratio seven I guess remember once you get a for a buy trade once you get a bullish candle right now check the previous candle if it was bearish. Now, if you have a bearish followed by a bullish candle, that's a good buy. Once you place a buy trade, rem uh subtract five from your entry point, that your stop loss, then add 35 to your entry point. That is your take profit. So, let me explain both buy and sell together now. So, with this trading strategy strategy, you can hold both buy and sell together. For example, you know I said you can only trade u three candles after this per separator which is 1 2 3. So in the case here we got a bearish candle, right? We are not going to place a sell trade. Why? Because the previous candle was also bearish. So it is not valid. Now this next candle too was also bearish, right? We cannot place a sell trade. Why? Because the previous candle was also bearish. Now the third candle which is our last opportunity for the day to trade was now bullish. Right now we are going to place a buy trade here because the previous candle before the bullish candle was bearish. So now this is a good buy. Now let's go to the next day and you can see that the riskreward ratio is one ratio seven which means no matter how much you loss you lose though the trading strate is not perfect. No matter how much you lose one win is going to cover up for like seven losses. Right? So in this scenario here this is going to be a losing day. Right? You can see here we got like a bullish candle right and the previous one was bearish. So we are going to place a buy trade here. And the next one was also bearish, right? And the one before that bearish candle was bullish. So we are going to place a sell trade here. Which both are going to lead to losses, right? So now let's go to the next day. Now this next day we got a bearish candle here. So we are not going to place a sell trade because the previous one was also bearish. Then this one we got a bearish. We are not going to place a sell trade there because the previous one was bearish. Then the third candle here was also bearish. We are not going to place a sell trade because the previous one was bearish. So no trade for that particular day. So in a case like this, remember it is one ratio seven because you are risking five points for 35 points. Right? In a scenario like this, we got a bearish candle here. We got a bullish candle here. So if you check the previous one, it was bearish. So we can place a buy trade here. Uh but unfortunately there was a reversal. But if you check count one, two, three. So we got a bearish candle here. Now after we got a bearish candle here, if you check the previous candle, it was bullish. Which means we can place we can enter a sell trade here. Let's say we enter a sell trade here. Why? Because we got a bearish candle. Then the previous one was bullish. Then your stop loss will be 5 minus uh + 5. Your entry point plus 5 because this is a sell trade. Then subtract 35. 35 from your entry point. That's going to be our take profit. So this is going to be like a very good win for that particular day. Let's do a short back test of the trading strategy using the der volatility bot. Though there are some things included in the der volatility b to you know optimize the strategy but nevertheless the strategy is still like a lot similar just a little bit modification to you know optimize the trading strategy. So in a case like this um you can see here we have a bullish candle followed by a bearish candle and that the candle is on the period separator. So that's going to be a sell trade right? So it's a good sell trade for that day. So like I said, you can hold two trades at the same time. You can see in this scenario, we have a bullish candle. Uh then if you check the previous candle, it was bearish. So this was a good buy trade, right? So that was a loss, but the one for the cell was a win. Remember the riskreward ratio is one ratio 7. So that will be done for the day until we have another previous separator. So here again, we got a bearish candle. If you check the previous one, it was bullish, right? So, let's see how this one goes. That was also a win, right? So, let's continue the testing. We're going to Let me forward this a bit. So, now we got another bullish and bearish candle. That's it. Another win. So, hopefully we get like a buy trade. That was a That was a loss. You know, we got here we had like a bearish candle. Then the previous one was bullish. So, it was a valid sell. Then this place we got a bullish candle and the previous one was bearish. That was a valid buy. But both trades um ended up being a loss. So, let's see how the next day is going to be. Let me forward this a bit. So, let's see. This should be a sell trade, a bearish candle. The previous one was bullish. So, sell. Let's see how the outcome will be. That was a good win for that day. Remember, you can only trade within the last uh the first three candlesticks after the vertical lines. 1 2 3. So, um let's end the testing here. Now, let's go to the next section where I'll be explaining how to use this for volatility 10 index. The one I just explained is volatility 101s. So let me let's go to the next video where I will show you how to use it for volatility 10 index. For volatility 10 index the strategy is exactly the same thing. Um the stop loss is 5 point away and the take profit is 35 points away. But the only difference between the way I use the strategy for volatility 10 index and volatility 101s index is that for 10 index what I do is that I use break even for 10 index. At a point I will move my SL to my entry point. But for 101s, the break even is not the same. So I'm just going to use the D volatility B to test it. Then remember there are some things you might see that is not in the trading strategy. This is like some special optimization that I added to the trading to the D volatility board. So let's do a little back test. So remember exactly the same thing. Can you see here? There was a bullish candle. Then the previous one was bearish and it's on the previous separator, right? 1 2 3. Those are the only places we can take trades. Now there was a buy here right? So um but the market reversed and cut us out. So we got a bearish this is volatility 10 index right we got a bearish candle. So we check the previous one it was bullish right now in a place like this we are going to place a sell trade. Right now the difference between this and volatility 101s is that we are using break even. Now you know the stop loss is five points away for 10 for the trade right? You are going to bring the stop loss to entry point when the market move from the five points away from the entry point in your favor. Right? So now we are risking five points. Now when the market move five points in your favor, you are going to bring the stop loss to your entry point. So let me resume. Can you see now the stop loss has been moved from where it was to the entry point which means which means now we are on break even. So that is how it works for velocity 10 index. Basically the difference on using the strategy for 10 1x and 10 index is just bring the um stop loss to the entry point when the market move 10 points your favor in 10 1x. So let me forward this a bit. Maybe we get another entry around this place. So we did not get any entry here because all the consecutive candles were bearish. Let's wait for another trade the next day because we already passed the last three candlestick after the period separator. So in a case like this should you get a buy trade. Okay. So once it moved five points to our favor. Can you see the stop loss was brought to the entry point which makes the trade now break even. So we got another sell here. So it caught us out as at break even here. Right. But in this case we got a sell trade bearish bullish. Now the it has moved more than five points in our favor and the stop loss has been brought to the entry point. Now we on break even. So uh there something happened there but you understand it's like part of u the extra modification for the daily volatility but which I'm not going to explain in this video. So uh you guys maybe if you get the B you be able to enjoy the optimization of the trading strategy. So in a case like this you can see buy it cut us out then we enter a trade a sell trade here right. So now the trade is already on break even. So there was a close there. The data w this was due to some little modification that I did. Uh let me forward this a bit so that we enjoy the back test faster. So let let's just stop here for now. So this is for 10 index. Remember the difference between 10 index the strategy for 10 index and 101 is that for 10 index once the markets move five points in your favor then bring your stop loss to your entry point which means like a break even. Now to the last part of this trading strategy which is for jump 10 index. The strategy is a little bit different from jump 10 index. You know for volatility 10 1s and 10 index. We need two candles to confirm. For example for a sell trade you need the current candle the last closed candle to be bearish and the candle before that to be bullish. You need two candles to confirm. But for jump 10 index right you are not doing that. You only need one candle. Right? So now after you get uh remember the from the previous separator you can only trade with three candles one two three after the previous separator uh one two three after the previous separator from the previous separator rather so now for example in a case like this if I get a bullish candle I'm placing trade immediately buy trade immediately and if I get a sell candle I'm placing sell immediately for example in this so that's it now if I get a bearish candle is going to place a sell trade immediately can you see now that's placed a sell trade, right? Your stop loss is going to be, for example, for a sell trade. Now, your stop loss is going to be 50 points away, which means you are going to add 50 to your current entry point. Then your take profit is going to be 400 points away from your entry point, which means you are going to subtract 400 from your entry point. Now your risk your break even in this this time around is going to be when the market move 100 points in your favor which means the price interval from your entry point uh to where you determine your uh break even is going to be 100 points. Remember the stop loss is 50 points, right? The takerit is 400 points, right? But when the market moves 100 points in your favor, bring the stop loss to your entry point. Let's see in this case. Can you see now after it moves 100 points in my favor, the B brought um the entry point to the stop loss to my entry point. So let's let's continue. So I'm going to drop the link to where you can, you know, get this trading B. If you're interested because I've already explained the strategy, you can decide to use it on your own. You already understand how the strategy work. And if you feel like, okay, you want to get the expert advisor, you can proceed and check the description of this video. I'm going to get the link to where you can, you know, get the expert advisor to use. So you can see here in this case, despite having consecutive bearish candle, still executed the sell trade. So it doesn't wait for two candles. But remember the trade must be must be determined from the first three candlesticks. Anything after that you can't take trades again. 1 2 three. This your trade can only be damaged by the last three um three candles from the period separator. So it's my favorite asset to use this trading strategy for is jump 10 index. So let me just let you guys enjoy the back test for a while. So make sure you watch this video till the end. You can watch the back test if you want. If you want to get the expert advisor, I will drop the link in the description of this video. Another thing you should note about this trading strategy is that within counting from the period separator, you can only buy once and sell once. Though you can hold both buy and sell trades at the same time. But 1 2 3 imagine you see a bullish candle here, you place a buy trade. Then if you see another bullish candle again for this jump 10, don't place another buy trade again. You can only buy once and you can only sell once within the three candlesticks. So if you find this video helpful, make sure you subscribe to this YouTube channel. If you have any question, ask me in the comment section. And if you want to get the expert advisor, the link will be added in the description of this video. Thanks for watching, guys. Heat. Heat. Heat. Mary, Mary. Heat. Heat. Heat. Heat. Hey, baby. Yeah. Heat.