Strategy Sharing My Secret Trend Reversal Strategy with an 80% Win Rate

[shanmugapradeep]

Hello, I am sharing my strategy, which I am using for manual trading, and I am planning to build an EA based on this strategy soon. This strategy works for all currency pairs and timeframes, but the recommended timeframes are M1, M5, M15, and M30.

This strategy is currently giving me an 80% win rate, tested for almost three months. However, I am still experiencing minimal losses because a single losing trade wipes out the profits from 10 winning trades. I am in loss not because of my technical analysis settings but due to poor money management, risk management, and risk-to-reward ratio.

In this strategy, we use the RSI, Bollinger Bands, and Moving Average indicators:

• RSI is used to identify overbought/oversold conditions.
• Bollinger Bands help determine resistance/support levels.
• Moving Averages are used to identify trend direction.

Buy Trade Setup:​

1. RSI (Period 14) > 80 → Overbought condition.
2. Current market price touches the Bollinger Bands (Period 30, Deviation 2) Upper Band/Resistance Line.
3. Current market price is above the 200 EMA (High Price).

If all three conditions are met, take a buy trade.

Sell Trade Setup:​

1. RSI (Period 14) < 20 → Oversold condition.
2. Current market price touches the Bollinger Bands (Period 30, Deviation 2) Lower Band/Support Line.
3. Current market price is below the 200 EMA (Low Price).

If all three conditions are met, take a sell trade.
These settings provide very few signals per day—just 2-3 per currency pair.

Alternative Settings for More Signals​

If you need more signals, you can adjust:

• Bollinger Bands to Period 20, Deviation 2 (default settings).
• 200 EMA based on Close Price instead of High/Low Price.

With these settings, you can get 5+ signals per day, but the win rate decreases to 70%.

Why Am I in Loss?​

I set my Take Profit (TP) to 100 and Stop Loss (SL) to 500. With a lot size of 0.01, I make $1 per winning trade. However, even if I win 5 trades and lose 1, my losing trade wipes out all my profits.

Example:

• 8 winning trades (0.01 lot, 100 TP) = $8 profit
• 2 losing trades (0.01 lot, 500 SL) = $10 loss

Even with a high win rate, my poor risk management keeps me in loss. I tried lowering the SL, but that significantly reduced the win rate, leading to even more losses.

I am sharing this strategy so you can try it as well, provide feedback, and share any ideas, new settings, or money management strategies.

Thank you!