Smart Money Strategy

Trading is easy, however, consistently profitable trading is where the difficulty lies. Traders since the beginning of time have tried to come up with a strategy that they could use in order to increase their win rates while minimizing their risk. In this article, we go over one of the ways in which you could do so. We discuss the different indicators, the settings used, and also go over the results. Read on to find out more. 

Indicators Explained 

Before we look at the indicators, it is important to understand how the market structure works. In a bullish market, there are a series of higher highs and higher lows, whereas a bearish market is characterised by a series of lower highs and lower lows. In a bullish market, the task of a swing low is to set the stage for the next higher high, and the same is the case with the bearish market too, where a swing high sets the stage for a lower low. 

A Break of Structure happens in a bullish market whenever a swing high after a low crosses the previous high, and the same applies to the bearish market but the other way round. 

A Strong High creates a Lower Low, and a Strong Low creates a Higher High. 

Long positions can be taken in a bullish market at a low since it is protected, and shorts can be taken in a bearish market at a high for the same reason. 

A Change of Character can be used to identify when the trend is getting weaker, and this happens when there is a BoS in the wrong direction over a smaller time frame than the one we are trading on. This is an indicator of the trend getting weaker. 

Results and Adjustments 

Initial Results 

After a 15-minute scalping session over the course of 6 months worth of past data using this indicator, the overall results were: 

Profitability: 20,602.19% net profit 

Number of Trades: 154

% of trades profitable: 56.49% 

Profit factor: 1.699

Drawdown: 75.79%

Adjustments 

Some additional indicators and settings that could be added in order to increase the win rate and reduce the risk employed are: 

  1. Different levels of leverage could be employed to boost the profitability and/or the win-rate associated with the strategy. 
  2. The take-profit and stop-loss levels could be tweaked to further affect the percentages of trades that were profitable. 
  3. Multiple take-profits or stop-losses could be added to change the profitability or the win rate. 
  4. Additional indicators could be added for more confluence. 

Conclusion

There are several highly profitable trading strategies that you can use in order to trade the markets and profit, but there are few that are as highly effective as the one discussed above. By implementing it even in its current form, you can make significant profits. You can also tweak the settings and alter the parameters on your own, resulting in a higher win rate and/or profitability.

Resources

  • https://www.tradingview.com/script/0dqwR76u-OB-Strat/
  • https://youtu.be/pALM7QJVI7M
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2 thoughts on “Smart Money Strategy”

  1. You may want to include thoughts around buy and sell stops at break of structure. Its good to figure out your pivot points and figure out where liquidity would be looked for. LL tends to be a buy zone, and HH tends to be a sell zone. Leveraging structure with concepts about liquidity is very strong, as well as taking into account volume impact on price action. I like the following indicators, it does require some understanding of price action on the candles.
    Boom Hunter Pro (or some other Center of Gravity variant) by veryfid — momentum + trend
    – I do like MTF Center of Gravity Grid by checkm8, i was going to modify boom hunter pro to contain a MTF view
    Volume Pressure Analysis by veryfid — volume spread analysis, which way volume is pushing
    Tesla Coil ML buy jdehorty — trend
    Higher High Lower Low – Live by LonesomeTheBlue — key points of inflection, I generally add Previous day high low close (24hr period) even when im on 2 min timeframes.. center

    Information on how to use is found at https://wiki.boomhunter.net/ Although the best is to watch price action to understand how they correlate as tesla coil requires a level of correlation between CoG and Tesla..

    1. Additionally, WRT In Boom Hunter the red S/R band is basically the Moving Average from CoG but better.
      When I want the easy button to find entries, and using the indicators for confluence I use

      Auto Harmonic Patterns, V2 by HeWhoMustNotBeNamed, and am Currently on the Trial for Auto Harmonic Projection…which I really like, but with all the indicators I have to have an ultraWide screen in Portrait mode.

      I tried combining into one indicator but still working through it as I have too many plotted objects. Ill probably group some that I can easily turn on and off.

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