Introduction to trading strategies
Larry Williams is a well-known trader who went down in trading history with a yield of 11,376%. His daughter has also won the World Cup Trading Championship and his students have won various trading tournaments.
This trading strategy consists of two indicators by Larry Williams:
Name: Donchain Channels
Input: Length: 96
Style: White.
Name: LWTI
Input: Phase 25 Smoothing Period 20
Style: Default.
Name: Volume indicator
Input: MA30
Style: White.
In addition, it is necessary to use the volume indicator for confirmation.
Trading Rules
Multi-single entry: **Touching the upper band of the Tangchian channel.
Both the LWTI and volume indicators are green.
The volume bar is above the white **.
Short Entry: **Touching the lower band of the Donchian channel.
Both the LWTI and Volume indicators are red.
The volume bar is above the white **.
Stop Loss and Take Profit
Stop Loss: The middle band of the channel.
Take Profit: Take profit in batches, when the risk-reward ratio is 1:1, the part is out, and the rest is held to win higher profits.
Backtest results
On the BTCUSD 5-minute chart, 100 consecutive trades were made using this strategy, and the test range was 54 consecutive trading days from July 8, 2023 to August 31, 2023.
Win rate: 1:1 Risk-reward ratio: 67%.
1:2 Risk-reward ratio: 33%.
1:3 Risk-Reward Ratio: 21%.
1:5 or more: 13%.
Yield: 100 consecutive trades: 16879%
Operate only at a risk-reward ratio of 1:2: 5272%
Optimization suggestions
Replace the volume indicator with the ADX indicator.
It is used in combination with the supply and demand relationship of large time periods, support and resistance levels, etc.
Only do the first two breakout trading opportunities after going from the lower band to the upper band.
Summary
This trading strategy performed well in backtesting, with a decent win rate and yield. However, any trading strategy needs to be verified by real trading before its effectiveness can be finalized.
Risk Warning
Investment is risky, and you need to be cautious when entering the market.