Can Chaikin oscillator trading strategy make you more money in stock or forex trading?
We tested the money flow index 100 times on the Trading Rush channel, I found out that
the money flow index has an Ok win rate and can sometimes make money. Then we tested the
Chaikin money flow 100 times, and that worked as well. What will happen if we test the chaikin
oscillator 100 times, will it perform better? In this video, I'm going to test the Chaikin
oscillator 100 times to find its win rate, and to see how many winners and losers it
can have in a row. Furthermore, at the end, I'm going to give it a Trading Rush score.
What's the Trading Rush score? It's like the Doug score, but for trading indicators. Now I
have tested many other indicators 100 times on the Trading Rush channel, but I never gave
them a Trading Rush score, so I will rate other indicators hopefully in the coming week
as well, which you will be able to find on the Official Trading Rush Website. This way,
beginner traders who are looking for proven profitable strategies, can find it easily
on the Trading Rush Channel, not just sorting by highest win rate, but with other categories
as well.
Subscribe to the Trading Rush and ring that notification bell, because we test many different
trading strategies 100 times to find their win rates, and you don't want to miss that.
If you plot the Chaikin oscillator on your trading chart, you will notice that it comes
with 1 line that moves above and below zero. This line tries to show the momentum of a
trend. The Chaikin oscillator will try to show the buying and selling pressure. Indicators
like the Chaikin oscillator, which try to show the momentum of a trend, have worked
really well on this channel. So let's see if this indicator performs good as well after
100 trades.
The idea is pretty simple, when the Chaikin oscillator is above the zero line, the buying
pressure is high. Similarly, when the Chaikin oscillator is
below the zero line, the selling pressure is high.
The basic strategy based around the Chaikin oscillator goes like this. When the Chaikin
oscillator is crossing above the zero line, it's a buy signal.
And when the Chaikin oscillator crosses below the zero line, it's a sell signal.
In this example, the Chaikin oscillator crossed above the zero line. So entry is at the first
candle that closed above the zero line of the Chaikin oscillator. And in this example,
the Chaikin oscillator crossed below the zero line. So entry is when the first candle closes
below the zero line.
But what about long term? Will this indicator work in the long run? Before we test the Chaikin
oscillator 100 times, we will have to modify the Chaikin oscillator strategy to fit with
the trend. Taking every single trade will make you lose money. But we can use the 200
E MA to find the long term trend direction.
So the better chaikin oscillator trading strategy goes something like this.
Buy when the Chaikin oscillator crosses above the zero line, and if price is above the 200
E MA. As for the stop loss, you can set it below the pullback.
And Sell when the Chaikin oscillator crosses below the zero line, and if price is below
the 200 E MA. Stop Loss is above the pullback. Furthermore, in both of these setups, the
entire candle has to be above or below the 200 period moving average.
In this example, the price stayed above the 200 E MA, so we are only going to buy. The
Chaikin oscillator gave a long entry signal, so entry is at the closing price of the candle.
Stop Loss is below the swing low.
In this example, the price stayed below the 200 E MA, so we are only going to sell. The
Chaikin oscillator gave a short signal, so the short entry is at the closing price of
the candle that crosses below the zero line, and set the stop loss above the swing high.
The Chaikin oscillator trading strategy was tested on the 30 min timeframe and on the
Euro JPY pair. And after testing the Chaikin oscillator 100 times, here's what happened.
Number 1. At the start, when price was in an uptrend, Chaikin oscillator gave multiple
winning trades in a row. The indicator gives many entry signals in a short period of time,
but these entry signals are not bad like some other indicators we have seen on this channel.
When the trend was coming to an end or was changing direction, the Chaikin oscillator
did give a decent amount of false signals, but it makes up for that by giving many good
signals in a strong trend. You can see this in the Trading Rush App,
when the price was trending, the profit line was going up. Then it slowly went down when
the price was changing the trend direction or was moving slowly. It gave back some of
the profit it made, but when price started to move again in one direction, it made even more
profit. You can filter the range market by using other indicators like the alligator.
I have already discussed more about the alligator indicator on the Trading Rush channel, check
it out to learn more.
Number 2. Unlike some other indicators, there is nothing particularly bad about the Chaikin
Oscillator. The entry signals it gives are not late most of the time, and because of
this, your pullback stop loss stays smaller.
After testing the Chaikin oscillator 100 times, I got an approximate win rate of 47 percent,
which is a profitable win rate because we used a 1.5 to 1 reward risk ratio. The profit
graph in the Trading Rush App looks good and is going up, with few pullbacks when the price
starts moving sideways. In the end, it managed to make money, with 7 losses in a row, but
11 winning trades in a row.
And now, let's give the Chaikin oscillator a Trading Rush score.
In the win rate category, Chaikin oscillator gets a 5.5 out of 10. Win rate is good and
profitable, but not high as some other trading strategies we have seen on the Trading Rush
channel.
In the easy to use category, it gets a 7.5 out of 10. The Chaikin oscillator strategy is
fairly straightforward and all you have to do is look at a line when it crosses above
or below another line.
If we talk about the reliability category, it gets a 6 out of 10. The Chaikin oscillator
gives many winning trades in a row, but also gives many false signals in a row. Strategies
that give multiple signals in a short period of time, are usually not that good, because
when price stays in the sideways direction for a long time, you can lose a lot of money
if the signals are false.
If we talk about consistent profits, it gets a 5 out of 10. The profit graph in the Trading
Rush App went up in the long run, but there were sudden upward moves, and many losing
trades in a row. The profit graph you will get with the Chaikin oscillator strategy won't
be as consistent as some other strategies.
If we talk about the quality of the entry signals, the Chaikin oscillator strategy we
tested in this video, gives entry signals in the direction of the long term trend direction,
where price has higher probability of moving. And because it doesn't give late entry signals
most of the time, it gets a 7 out of 10.
So the overall Trading Rush score is 31 out of 50. Other trading strategies that had excellent
win rates after testing 100 times, will get a Trading Rush score soon.
So subscribe and ring the notification bell, and because on the Trading Rush channel, we
test and have tested trading strategies multiple times to find their win rates. And you don't
want to miss that. Maybe considered supporting the channel on Patreon to see in depth trade
analysis. Thanks for watching.