Backtesting the Hype: Can YouTube Indicators Deliver? (Part 1)
Today we will analyze a video that caught my attention on my YouTube main page.
Forget Everything You Think You Know About Scalping Trading Strategy
Video Summary
The strategy is presented on intraday trading on 5 and 15-minute charts to be used on BTC/U.S.Dollar.
It uses the following indicators:
STD-Filtered, N-Pole Gaussian Filter [Loxx]
— Adjustments: Period 50, Order 10, Filter Deviation 1, Filter period 49
DecisionPoint Price Momentum Oscillator [LazyBear]
— Adjustments: No adjustments needed
SmartSAR [OlgaObara]
— Adjustments: He modifies many other values but only SMA for Visual Control 145 makes any difference in his strategy.
With these indicators added to the graph and the parameters adjusted, we get our entries.
— Strategy
This strategy will provide labels of entry signals for long and short based on the Gaussian filter.
LONG — Initiated when a long signal is generated, the price is above the 149-SMA, and the PMO oscillator is above the central line. The stop-loss is set at the last swing low, and the take-profit is calculated based on the risk/reward ratio.
SHORT — Initiated when a short signal is generated, the price is below the 149-SMA, and the PMO oscillator is below the central line. The stop-loss is set at the last swing high, and the take-profit is calculated based on the risk/reward ratio.
Code
On my code, I have hardcoded the modifications as presented in the video.
The backtest code can be found at:
— Considerations
The strategy uses, by default, an initial capital of 2000 USD. The size of the contract is also based on that. Please adjust to your reality.
Also, it is important to note that I did not add any commission to the test results, so I ask you to add them based on your broker and your reality since it affects the strategy results.
— Inputs
The strategy includes customizable risk management parameters:
- Risk Reward Ratio: This defines the risk/reward ratio for each trade.
- Plot TP and SL: Plot the TP and SL on the graph for each operation.
- Lookback Period for Swing High/Low: Defines how many candles to look back on for identifying swing points used for stop-loss.
- Day % Goal: When you hit x% of profit on the day, no more operations will be opened.
- % max Day DD: Once a % of the balance is lost, no more positions will be opened.
- Start and Stop Trading Times: Set the hours during which the strategy can open new trades.
- Plot All Std Signals: Plot all signals generated by the STD-Filtered, N-Pole Gaussian Filter indicator, regardless if it generated an entry or not.
- Plot Oscillator: For each day, the oscillator will be scaled and plotted on the graph to be able to double-check the entries. (I had to do it like this to check this strategy without needing to add the Oscillator separately in the graph).
Results
Besides the default TradingView results, I have included a performance table that breaks down results monthly, providing a clear view of equity development over time.
It also shows how much commission you have paid overall to understand better the impact it has on the performance.
My trading view is only able to go 20k historical bars back for the backtest so, I will leave it to you if you want to go further back.
The backtest on BTC/USD using 5-minute and 15-minute charts shows profitability with a win rate around 40% and a 1.4 risk-reward ratio (excluding commissions).
The strategy’s performance on other markets (currencies, stocks, futures) was not promising.
We Value Your Feedback
I’d love to hear your thoughts on this scalping strategy! Share any improvements or ideas in the comments below. I’ll review all contributions carefully.
In this first part, we analyzed a YouTube scalping strategy. Be sure to follow us to stay updated on what’s coming next.
Persist and prevail! See you on the next one.
