Hey, hey, what's up my friend! So in today's video I Want to share with you how I made $259,800 for the year 2020? Unrealized profits or rather, the realized Profits is here. Un Unrealized Profits is here, so you can see it for yourself. Yeah, then for 2021, Realized Profits is here. Unrealized Profits is here.

and 2022 Realized Profits is here. Unrealized Profits is here, so you can know. Do the math. Okay, so what is this trading strategy that I use to generate six figures of profit? Trend Following Okay, so now when it comes to trend following, many Traders thinks that it's all about trading in the direction of the trend or trade with the trend.

But here's the thing. that's only a tiny part of it. There's more to Trend following than just trading with the trend. So it's no surprise why most Traders fa right? even though they're trading with the trend.

So this is why in today's training, I'll share with you the secrets of trend following, what is it, how it works, and more importantly, why it works. Then I'll walk you through a complete Trend following system. So this way you know the exact trading rules, the entries, the exits right which will allow you to profit in Bull and bare markets even during a recession. And by the way, the system that I'm going to share with you, right? It's not just based on Theory I'll back test it.

so I'll share with you the result so you are more confident right of this trading system. So whatever I'm sharing with you I try to back it up with as much evidence, improve as possible. sounds good, then let's get started. So what is Trend following So Trend Following is a trading strategy, a system methodology if you want to call it that allows you to profit in Bull markets bare markets and even during a recession.

But how you might be wondering how the reason is simple, right? Because we Traders we are humans. We have emotions. Same like the markets because the markets is made up of humans participants. you don't see cow, chicken, and dog.

You know trading the market. I mean even if they do, they still have emotions as well. So we are driven by emotions. The market is driven by emotions and the two biggest emotions out there are fear and greet right? fear and G So when the market is, there's a lot of fear in the market.

What happens? the market will be in a downtrend and as a trend follower, you can profit from a downtrend. Likewise, when the market is feeling, you know optimistic there's a lot of greed in the market. A trend follower can profit and write the trend up higher. But let's be honest, this trading approach is not the holy Grill You have winners and losers along the way and when the market is choppy, it's in a Range This is where a trend followers Trend follower go into a draw down and they lose money.

But the key here is this right is that as a trend follower, you don't need to have a high winning rate. You can have a winning rate of 40% right? And you can still be profitable in the long run. That's because the average size of your winners is much bigger than your losers. Let me give you an example.

Imagine you have a trend following system that wins 40% of the time and let's say your average loss is 100 bucks and your average gain is $200 in the long run, right? Will you make or lose money? So a hypothetical scenario, let's say 1 2, three, four, five, six losers in a row and then winner winner chicken dinner, right? So six losers followed by four winners. So your total amount of losses over here is $600 Agree. because each loss average is 600 bucks. Multiply by six losing trades, you get a total of $600 dollar, right? Total loss.

What about your winners? So average gain is 200 bucks. Total winners will be $800 So $800 you minus $600 You still come up aead of $200 And that's the secret, right? That's the reason why Trend Followers can still be profitable despite having a low winning rate. Does that make sense? Smash the Thumbs Up Button If it does, now look at this table over here. This table here is actually the Uh results right of a trend following system that I use to trade the market.

So this is a system that uh I've back tested I traded live in the markets as well and you can see this is the result of it. So you can notice a few things. Number One in the year 2000, this system is up 29.4% In 2008, it's up about 82.4% and 2022 right up 42.7% %c Now what is the common recurring pattern that you realize over here? Think about this: 5 Seconds one, 2, 3, 4, five Okay, the answer is this that during this period it's actually period of fear crisis Recession right? 2000 you have the Doom bubble, 2008 you have the mortgage back crisis and 2022 you have the Russia Ukraine war crisis. So you can see that during such fearful Market environment Trend followers they Thrive right during this type of Market environment and now you might be wondering why why does a trend follow do so well during such crisis period And the reason is simple right is because again namely of fear and greed in the market, we human Traders We have this hurt mentality.

What do I mean by hurt mentality? So we like to follow the crowd. So imagine you're in a cinema watching a movie right? Maybe it's Avengers end game and then there's a fire in the cinema. The fire is getting bigger right starting to you know uh heat up your skin right? There's fear in you and as well as all the other parts an in the cinema. What are you going to do? Well, chances are 99.9% of you are going to rush for the exit to run out of the cinema.

And this is what we mean by a hurt mentality. Everybody's going to behave in a very similar Manner And it's the same for financial markets when there's a lot of fear and panic in the markets. What happens? Many Traders institutions, right, funds or whatsoever. They're going to sell off their risky assets because it's risky, right? There's a lot of fear.

sell away risky assets. Let's move into something that is safer. So you sell away your risky assets like equities or whatsoever. What's going to happen when there's a massive sell off, it creates a downtrend.

Sounds familiar. and then when you take your money and put it into safe heaven, Assets or currencies. what's going to happen to those assets? Well, those assets are going to start to Trend right as more people put put more money in this safe safe havens, assets or currencies. So this is where you get strong downtrends and strong uptrends during such a crisis period.

And this is how a trend follow. As you know, they profit during a trend where regardless of whether it's uptrend or downtrend. And that's the secret to why a trend follower do so well during such crisis period. Because this is where the H start to behave in a very similar Manner and creates Trends right across all these different markets.

Now at this point, right? you've understood right what is Trend following and how it works. Now you're probably wondering. so how can I be a trend follower? Raina All this sounds good, but you know what do I need to do to be a trend follower? That's a good question because there are four secrets you must follow, right? If you skip any of them, you will fail, right? So this is important and let me explain to you what these four secrets are so you don't fail as a trend follower. Okay, secret number one is this: You want to trade many markets.

Here's a simple analogy for you. So let me ask you if you want to get your wife pregnant. Maybe you know you're ready for Parenthood Are you going to shoot once a month or 30 40 times a month? Well, clearly you're going to say rain I'm going for 50 times a month. Well, good you, right? I I can do that, But you know, congratulations if you can.

So as you can see right, if you want to get your wife pregnant, you're going to shoot as many times as possible to increase your odds of getting getting her pregnant. And it's the same thing for Trend following if you want to write: Trends If you want to capture Trends you're got to trade as many markets as possible to increase your odds of capturing a trend. So this is why as a trend follower, it is perfectly normal right to be trading. You know, anywhere from you know, 40, 50, 60 I Think some funds even trade more than 100 markets because this really increase their odds of capturing Trends And this is where they know they trade trade across things like indices Commodities Uh, Metals Agriculture Etc So the more markets that you're trading, the better chance that you will capture a trend.

So don't make the mistake right That of what I see many Trend followers do. They only trade three, four, or five markets at most and this is too little right to to be a successful Trend follower for the long run. Next secret Number two: Follow the price. So what do I mean by this? So let me ask you.

Have you ever bought a stock right? Because the price is very low and it seems like it can't go any lower. So you buy the stock right? Your top process is man. Raina Look at how cheap this stock is Raina the price just can't go any lower. Man buy.

So you buy the stock and the next thing you know, the price collapsed even lower. What's cheap just became cheaper. Does that sound familiar? Or how about this? The market is in an uptrend and it broke out of the all-time highs. The chart is really bullish, right? Big green candles in a row.

but at that point, right, it looks really expensive. And you think to yourself, man is probably going to make a reversal, maybe even a pullback. Let me just wait a while and by waiting a while the market continue to Rally Another 100 200% within the next few months and you realize you're on the sidelines not able to capture the piece of the move. Yeah, so the lesson here is this is that what's high can go higher and likewise what's low can go lower.

As a trend follower, we don't predict how high or low the markets will go. We just simply trade what we see not what we think this means. If the market is heading up higher, we look for buying opportunities. If the market is heading down lower, we look for selling opportunities as simple as it is and later on I'll share with you a powerful Trend following system where it allows you to do just that so you know when exactly to enter and exit your trades.

But for now, let's move on to Secret number three. Boom Shaka Boom shakalaka Boom Boom Secret Number Three, Cut your losses. So here's the thing, right. just because you're trading in the direction of the trend, doesn't mean that you know every trade will be a winner.

No far from it. In fact, as a trend follower, most Trend followers Our Winning rate is between 30% to maybe as high as 50% from from what I see. So anywhere between 30 to 50% right is the winning rate of a trend Follower. So this means that you will encounter many many many losses in a row.

And the reason why you can survive in this business despite having many losses in a row is because you cut your losses because if you don't then this is what's going to happen. So if you look at this you can see over here. If you go into a draw down let's say a 10% draw down. You need 11.11% to get back to break even.

but if you don't cut your losses you hold on to your losses. You get let it snowball to get bigger and bigger and your account let say goes down into a 50% draw down. You need 100% to get back to break. even.

Okay still doable. Still possible to get back to break even after a 50% drw down. but once your draw down gets too deep let's say at 80% 90% you need like what 400% to get back to break even. and if you're draw down at 90% you need a 900% return to get back to break even which is I would say near impossible.

So always manage your risk, cut your losses so you can leave to fight another day. So now the next question is how does a trend follower then you know, make sure that their winners is larger than their losers. Here's how write your winners. This is the secret right to making sure that your winners.

your gains are larger than your losses. You Must write your winners. Okay, as you've seen earlier, you can have a 40% winning rate, But if the average gain is larger than your average loss, you will be profitable in the long run. So now the question is, how do you write your winners? Well, we're going to use a tool a concept called a trailing stop Loss.

Okay, let me explain how this works. So let's say for example, you go long on soybeans, right? right? Okay, so let's say you go long on soybeans and let's say you have a trailing stop- loss of 30% So let's say soybean has a breakout. At 100 bucks, you buy $100 And what does a trailing stop loss mean? So a trailing stop loss has two function. First function is to protect your Capital if the market moves against you.

Second function is to allow you to write the move if the market moves in your favor. So let's say right, you buy soy bit at $100 and let's say you have a 30% trailing stop loss. Let's say from $100 it went back down to let's say $70 At this point, what's going to happen is that you will cut this trade. You'll exit this position for a loss because it has hit your 30% trailing stop loss when the price drops 30% from the highs from 100 down to 70.

That's uh, $30 loss. So it hits your trailing stop loss. Now on the other hand, what if the market moves in your favor? So let me give you another example. So let's say you buy soybean again.

This time around, it breaks out, you buy and the price writes the new trend unfold itself. And you write it. Let's say up to the price of $200 over here. So again, you bought at $100 but this time around, the market moves up to $200 At what price point do you exit2 200? No.

As a trend follower, we never predict how high the market can go. So again, we adopt this 30% trailing stop loss for this example. So if the price drops 30% from the high, so 30% of 200 bucks is $60 So $200 you minus $60 let's say, drops down to $140 This is where you would exit this trade right? In this case, it won't be a loss, it would be a profit. Because you buy at 100, you sell at 140, that's a gain of like 40% A gain of $40 per contract, right by trading this.

uh, Soybean market. So this is what we mean. We mean by a trailing stop loss. It protects your downside, but at the same time it doesn't cap your upside.

So this way, if the trend unfold itself, you still have the ability to write this trend up higher. And that's how you make sure that the size of your gains, the average size of your winners is larger than your loser. So this how you can actually pay for many, many frequent losses in a row and still be a Prof profitable Trader in the long run. Does that make sense? Subscribe to the channel If it does.

Okay, now at this point, right? you have learned right the secrets of trend following how it works, Why it works. So next, I'm going to share with you something important, right? A full complete Trend following trading system that works so you can profit in Bull and bare markets and especially during crisis period. Let's go all righty. Now let me share with you the exact trend following system, right? So this way you can go out there and uh, I suggest you know, researching it first, validating it first before trading it on a life account that's only responsible right to yourself.

Okay, so whether you make or lose money right again, I won't be held accountable I'm just simply sharing with you what I believe works I'm going to provide the data, the back tested results, and much more. But it's up to you to know. Take it, refine it, and make it on your own. So the trend following system, right for the rules, right for long is this number one? If the market closes right at the highest price price over the last 200 days, then you go long.

So this in essence right is just simply saying when the market closes at the highest price point over the last 200 days you buy, you go long. So let's say price goes up, comes down, goes up, comes down, goes up. and let's say this is the highest over the last 200 days. Okay, this is the highest price point and let's say for whatever reason today the price breaks out and close right at this high.

This closing price is the highest price point looking back over the last 200 days. When this happens, you go long. So if you really think about this right, this is just simply a breakout entry trigger and there's no secret source to it. The secret source is actually the four secrets that I shared with you earlier.

If you appli with discipline in the long run, that's how you become a successful Trend follow mod because it's a magical 200 uh, day breakout or whatsoever. Okay, so the secret again is the four Secrets which I shared with you earlier. If you jump straight to this section of this video, please look back earlier so you know what are the four Secrets I've just shared. So this is the entry rule for long market closes at the highest price point over the last 200 days, then go long.

What about exit? Very simple if you in a long position and the price drops 68 basically six times the average true range from the high, then you exit the trade. So earlier recall I shared with you what is a trailing stop loss Market Let's say goes up in your favor at this highs. Okay, let's say it drops that down lower right? That is. From this highs down to this point we can Define at 6.

ATR So basically ATR stands for average to range. It measures the historical volatility of the market. So once it exceeds six times the historical volatility of the market, we exit the trade. Okay, so don't worry.

later on I'll share with you indicators to help you define what is 68r indicators to help you show you where is the 200 day, uh, highest close on the chart and stuff like that so your life will be much easier. But for now, just understand that this is the trading rules we're looking to buy, uh, the breakout the highest price point over the last 200 days. and then we Trail our stop loss right using using 68 uh from the highs. Okay, so moving on right? Uh, short position.

It's just the inverse. I'm not going to go through it because you you are not a uh, you are, you are intelligent being right? Don't need me to explain. Okay, uh. next one markets Trad What Markets Are we going to trade? So as you right as a trend follower, we want to be trading many markets.

So I'm just going to know. list up all these markets that we will be trading Right? and is where we're going to run the the back test on lat turn on all this markets that's at Leist down like 30 plus over here. But that's not to say that you know you only can stop at 30 if you can go 40, 50, 60 I leave it to you. Usually that will yield you a more favorable uh return right relative to risk.

But for now, uh, for this purpose of this video, These are the 35 markets that I've listed down here and we'll back test them later on. And what about risk management? Very simple right? You Risk management. Again, we want to make sure that when we encounter a loss, which we definitely will, it's only a fraction of our account 1% of our account. So this means if we were to hit our 6 ATR trailing stop loss right we should lose not more than 1% of our account.

Now let me walk you through some trading examples so you can see how this uh rules right will look like on your chart. So first thing first, we need a few indicators to make our life easier. So how do we Define the uh highest close over the last 200 days? Very simple go to indicators tab search for something called Donon right by is called Donon Channel But since we are looking for the closing price, you just search for Donon Close and this particular indicator will pop up. Click on.

this might be think what Raina so much stuff on the chart. Don't worry. Don't Panic Don't freak out. Okay I'm going to help you adjust the settings so it looks a lot more cleaner.

So when you see all this, remove all this check box until the last one. Okay, so this last one again. just remove this. Remove this, remove this show channel.

Change this to 200 since we looking at the uh uh. highest closing price over the last 200 days and you click. Okay, now you didn't have a heart attack. Did you all right? Much better.

Yeah good. So what you can see over here is very simple right? What this lines these blue lines represent on your chart. It's that. It simply tells you this is the highest closing price over the last 200 days and this tells you that this is the lowest closing price over the last 200 days.

Okay, so if you want to get an entry trigger where it has to be the highest close over the last 200 days, then very simple. What you're looking for is for a candle to close Beyond This blue line. Simple as it is for a long trade. And if you're looking for a short trade, all you're looking for is for a candle to close below this blue line for a short trade.

Simple. Yes! So let me walk you through how it looks like. So in this case, Boom Right over here. This candle.

This is the highest close over the last 200 days, right? You can see the price has touched this blue line meaning it form the highest close over the last 200 days. And if that's the case, we are looking to go long now. The entry is setle. What about the exits? Remember we are using for 68r trailing stop loss.

So basically we using the volatility of the market to Trail our stop loss six times the every volatility of the market. Again, there are indicators to make your life easier. Look for this one called Chandelier Okay, uh oops, wrong spelling this guy. Chandelier: Stop by Pep Charlie Click on this.

Okay, Oh okay. I have too many indicators on my chart. Don't worry I'll just remove one temporarily. Okay and I look back for the one by Pip Charlie Want again There we have it.

Chandelier, Stop by Pip Charlie Okay, now how do we adjust this settings? Very simple. Go here to settings I Usually look back I put like 50 candles ATR Period I use 20. The multiplier here is six so this means it's 6 ATR Click Okay, Okay so now life is super easy now so you can see over here. this is your trailing stop loss.

This light blue line over here. So as you know, right as the market moves in your favor, your trailing stop- loss will naturally progressively move higher as well in your favor. So let me just walk you through this trade quickly. I'll just admit this is a winning trade.

Just a cherry pick chart to show you how it all works. So let's move. let's go right so you can see over here up over here. Did we exit this trade when you touch this light blue line? No.

because we are looking for a close, not uh, the lowest price point. So we we have to make sure that the price closes below this light blue line only. then our 68r exit is met. so if it doesn't close below it, we continue holding that position.

Okay, so let's go So over here you can see notice right how this light blue line progressively Right Moves higher in your favor whenever the market break out to new. High So that's kind of like the feature of a trailing stop loss. As the market continues to move, you favor the trailing stop loss will go up higher along with it. Sort of like protecting your open profits right as the market moves in your favor.

So let's see. so I'm just going to run this through quickly because as I've said, it's a cherry pick chart and you can see that you're riding this trend up higher. Massive. Trend And Aha over here.

Finally right we have exit over here on this candle. This R candle. Notice the price close. Just notice the price close below this light blue line close below the 68 here and this is where where we will exit the trade and in this case it's a winning trade.

Yeah now let's have a look at one more example shall we? So this is the chart of silver and as you can see right this over here Uh Dem markets the highest closing price over the last 200 days. this one here Dem Market The lowest closing price over the last 200 days. So whichever direction the market breaks out right, that would be an entry trigger to either go long or short. So in this case boom right.

We have an entry trigger to to go long as we had the highest close over the last 200 days. Where is our trailing stop loss again is on the chart over here. This light blue line is our trailing stop loss. So if let's say the market suddenly revers right and hit our trailing stop loss, guess what? It's going to be a loser and we take the loss and move on.

So let's find out what happens next. So in this case you can see the market shortly after went against us over here it did not close below this. uh light blue line. So we are still in the trade and then it boom over here.

This is where we took the loss Right over here. where the market uh closes below this light blue Blue Line This is where our trailing stop loss is hit and we will exit this straight on this candle here. So I'm sharing with you both winners and losers because it's a trend follower. Really right? You won't be experiencing winning trades after winning trades.

After winning trades, it's more like, you know, uh, 40% of the time you have winners, right? But the winners are usually pretty large in size and the losers they are frequent, but they usually relatively small compared to your winners. Okay, so what you've just learned is a systematic Trend Following system, the rules, the exits. Everything is objective. It's systematic.

There's no room for discretion. And the beauty of this is that when you're trading with an objective set of rules, you can quickly do a back test to find out how it has performed over time. So right now I'm going to share with you the back test results of this system that I've just shared with you and I've back tested over the last 22 years since 20 to 2022. so actually 23 years? Yeah, so this is the results of this Uh trading system.

So the total R return is 1, 198% over the last 23 years. So to break it down annual basis, it's about an average of about 13 close to 14% a year. And bear in mind the S&P 500. if you buy and hold the S&P during this period I think your average annual return is about maybe 8 9% a year.

Yeah, maximum draw down is 17% So what exactly is a maximum draw down? So for those of you who you know, investor you buy and hold. Let's say you know you buy and hold Apple stock at you bought it at $100 and Apple stock drops back to $50 and then before it rally up and breaks out of $100 to $200 So from $100 you hold all the way down $50 That's a decline of 50% So we call it a maximum draw down of 50% Okay, so for this particular system, the maximum draw down is 177% And by the way, the S&P 500 you buy and hold your Max draw down. Say you know, depending how far back you look, right anywhere between 50 or 60% So again, maximum draw down in this case, this particular system, right, It's less risky if you compare it in that manner, and your winning rate is about 45% So as mentioned right, Trend Followers, your winning rate is usually anywhere between 30 to 50% In this case, it's about 45% You actually lose right more than half the time. But the reason why you're still profitable in the long run is because of this, right? Your payoff ratio.

This in other words, right, measures the average size of your winners to your losers. So the payoff ratio of 2.11 means that the average size of your winners is about 2.11 times right, bigger than your loser. So that's why, In other words, right? your average size of your winners is bigger than your losers, right? d Okay, so moving on, you can see this is the equity curve of this system right since 2000, right? You can see that clearly it's been a long profitable trading system even till today. I I Don't have any reason to think right why it would break down suddenly just because I'm shooting this video Very unlikely, right? Uh, this of the is the results of this trading system right on a month- on Monon year on-ear basis.

So again, similar features and characteristics. During the Doom bubble, the system up about close to 16% the 2008 financial crisis up about 59% Uh, Russia Ukraine war in 2022 up about close to 30% Yeah, so you can see that in the long run. You know it's uh, profitable, right? and it allows you to profit in both Bull and bare markets. especially right during a crisis or a recession period.

As you can see, this particular trading system right is profitable in the long run. but still, it has a number of losing years in between. like for example, in 2009 down about 1.2% Here down 1.8 Here is down 0.1 Not like it's a lot and here is down 0.3% So a few losing years in between. So now what it be great if you can reduce the number of losing years.

If you want to learn more then I' like to invite you to my upcoming we Weinar called Stock Trading Secrets. I'll put the link somewhere below this video. You can sign up for it. It's free and during this webinar.

I'll share with you firstly how you can reduce right the number of losing years so you can make money almost every year from the markets. Number Two I will share with you a proven stock trading system that has generated 3,225 per over the last 22 years. plus I'll walk you through for people who have a small trading account maybe a few thousand dollars or so right? How you can actually grow your account to six figures or seven figures and Beyond even with a small starting Capital So all this and more during my next upcoming live webinar. If you're interested, I'll put the link below this video.

You can sign up for it, it's free and with that it I Wish you good luck and good trading. I Will talk to you soon.