Trading Without Technical Indicators: Euro Dollar Reversal Strategy

Overview

• Strategy to identify reversal points in Euro Dollar (EUR/USD).
• Claims an accuracy of almost 90%.
• Strategy has been back-tested from January 2010 to June 2024.
• Simplified rules for entry and exit.
• Emphasis on not over-complicating trading strategies to find an edge.
• Personal use by the presenter with variations.

Strategy Details

Entry Rules

Long Trade Entries

1. Must Be Flat: No open trades.
2. Wait for a Red Candle: Close of red bar is less than yesterday's low.
3. Buy Stop Order: Enter at the high of the red candle, valid for one day only.

Short Trade Entries

1. Must Be Flat: No open trades.
2. Wait for a Green Candle: Close is higher than yesterday's high.
3. Sell Short Stop Order: Enter at the low of the green candle, valid for one day only.

Trade Exits

1. Profit Exit: Exit at the end of the session (between 16:45 - 16:55 EST) if in profit.
2. Stop Loss: 250 pips.

Performance Reports

January 2010 - January 2022

• Net Profit: $24,600
• Total Trades: 212
• Win Rate: 88%
• Average Trade: $116 (after costs)
• Costs: $40 (equivalent to 4 pips)
• Largest Losing Trade: $2,540
• Equity Curve: Mixed periods - good/flattish/better trends, overall moving up.

January 2022 - June 2024

• Net Profit: $10,700
• Total Trades: 49
• Win Rate: ~93%
• Average Trade: 21 pips
• Largest Losing Trade: $2,540
• Equity Curve: Strong performance, new highs indicated by green dots.

Combined Data (2010 - 2024)

• Overall Win Rate: 89%
• Average Trade: $135
• Equity Curve: Good early periods, subsequent flat periods, strong recent performance.
• Annual Analysis: Only 2 losing years, strong years in 2010, 2022, 2023, and 2024 (YTD).

Additional Learning Resources

• 22-page Beat the Markets Strategy Guide Book: Includes three more rule-based strategies.
• Trading Course: Contains six additional strategies. Offers a strategy with a trade filter for improved performance.

Strategy Volume Insights

• Strategy trades about 20 times a year.
• Many traders might find this frequency low.
• Suggested Solution: Trade multiple strategies simultaneously (portfolio approach).
  • Example: 5 strategies * 20 trades/year = 100 trades/year
  • Benefits: Diversification and increased trading opportunities.

Final Thoughts

• Encouragement to explore older videos for more strategies.
• Note on fewer video uploads due to focus on strategy development.
• Appreciation for viewer support.

Presenter: Jared Goodwin