Since starting Cypherscope there is one very popular request I’ve received again and again: to show what a real life profitable trading strategy actually looks like.

So recently I’ve been working on something in USDJPY. It’s simple strategy but a profitable one and I’m going to explain exactly how it works for educational purposes. Enjoy!

If this article is well received I’ll turn it into a regular series, maybe a monthly one, where I follow this same structure and dissect a profitable trading strategy on here or for the email list.

Part I - The Strategy

Remember my article on the TTM Squeeze? If not, maybe you should check it out because the that indicator is the centerpiece of this strategy.

Quick crash course: the TTM Squeeze tells you when the Bollinger bands are within the Keltner channels (indicating a big move is about to take place - the squeeze) and gives you a directional bias according to a price momentum value.

Note: our strategy uses the default settings on all these indicators so don’t worry about tweaking them.

Market: USDJPY

Timeframe: 1H candles

Long entry conditions: Bollinger bands within Keltner channels and TTM momentum value greater than 0.125

Long exit conditions: Bollinger bands within Keltner channels and TTM momentum value less than -0.250

Short entry conditions: Bollinger bands within Keltner channels and TTM momentum value less than -0.125

Short exit conditions: Bollinger bands within Keltner channels and TTM momentum value greater than 0.250

Entry: market order (0%)

Stop-loss: 1.9%

Take-profit: 0.5%

Risk: 0.26

Winrate required for positive edge: 79.4%

Part II - The Results

For the sake of speed I coded up this strategy quickly in TradingView’s Pinescript. Here are the results: