This Award Winning Trading Strategy Is INSANELY PROFITABLE – Hoffman System Proven @Trade Pro

Traders employ a variety of strategies in order to be able to consistently beat the markets and profit – however, there are few methods of trading as effective as scalping. Scalping refers to a form of trading that relies on making a series of small profitable trades, focussing on quantity rather than quality in order to boost profits. The primary focus of such strategies is to utilise trading volumes rather than performing a lot of complex technical analysis. There are several such trading strategies, and one of them has been discussed in this article. Read on to find out more. 

Indicators Explained 

There are 2 main indicators used in this trading setup, and each of these indicators has been explained below in detail. 

Rob Hoffman Inventory Retracement Bar

The Inventory Retracement Bar is used to track and understand institutional activity on a particular security. It can be used to identify when the counter-trend in a particular larger trend has ended, and the original trend is expected to continue. Therefore, it is a useful indicator to understand the strength of a trend as well as see a trend is ending and beginning. 

EMA 

The EMA is simply the exponential moving average of the stock’s closing price over a given number of trading sessions. It works in a very similar way to the SMA (Simple Moving Average), except it gives more priority to more recent data as this is considered to be more relevant than old data. The parameter that you have to enter for the EMA is the time period. Usually, traders only go long when the current price is above the EMA, and short when prices go below the EMA. 

Settings

For this particular trading setup, the following settings were used on the indicators: 

  1. EMA: Two EMAs were used with differing periods: 
    1. EMA1: Period = 20, on the 15-minute candles  
    2. EMA2: Period = 20, on the 1-hour candles 
  2. Rob Hoffman Inventory Retracement Bar: The default settings were used for this indicator. 

A long was initiated whenever the EMA1 was above the EMA2, and the ITB indicator showed a red triangle under the bar. 

A short was initiated whenever the EMA1 was below the EMA2, and the ITB indicator showed a green triangle under the bar. 

The risk-reward ratio was fixed at 1:2. 

Results and Adjustments 

Initial Results 

The backtesting results over past data were:  

Profitability: 97.21% net profit 

Number of Trades: 21

% of trades profitable: 66.67% 

Profit factor: 4.763 

Drawdown: 6.53%

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. 

Conclusion

Scalping has been proven to be one of the most profitable trading strategies out there, however, even when you’re scalping, you need to ensure that you have a high win rate so that the strategy is fruitful and profitable. Using the strategy discussed above, you will be able to profit in both bull and bear markets consistently. You can even tweak the settings to suit your level of risk and trading style, finding the right balance between the win rate and the net profit. 

Resources: 

  1. This Award Winning Trading Strategy Is INSANELY PROFITABLE – Hoffman System Proven @Trade Pro – YouTube 
  2. TradingView Indicator 
  3. Settings Used in the Video 
  4. Exponential Moving Average – Investopedia
  5. Rob Hoffman Inventory Retracement Bar – Best Trading Platforms 

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