​High win rate TPS trading strategy: Easily deal with market volatility

Originally based on US economic data, the market expected the Federal Reserve not to relax monetary policy so quickly. However, the latest statements of Fed officials have significantly increased the market’s expectations for accelerating interest rate cuts. It can only be said that the market is indeed not so easy to predict. As traders, we can only continuously improve our technology and thus respond cautiously to market changes. Today, I want to share with you an efficient and practical trading strategy – TPS trading strategy, hoping to help you improve your winning rate in trading.

TPS trading strategy, that is, the abbreviation of Time (time), Price (price), and Scale-in (batch position building), is a strategy specially designed for short-term traders and is widely used in various trading products. It cleverly utilizes the fear and greed of market participants, and by accurately capturing overbought and oversold signals, it seeks profit opportunities in the market’s emotional fluctuations.

TPS trading strategies often use two technical indicators. One is the 200-day exponential moving average (EMA), which is used to determine the direction of the trend; the other is the RSI with a period of 2, which is used to determine when the callback is overbought (oversold).

TPS trading strategy long trading rules:

1. The price must be above the 200EMA moving average.

2. RSI with period 2 must be oversold for 2 consecutive days. That is, below the 25 level.

3. After the closing of the second day of oversold, 10% of the position went long.

4. The three-day closing price is lower than the previous entry price, and the 20% position is increased and it goes long.

5. If the closing price on the fourth day is lower than the previous entry price, add 30% of the position and go long.

6. If the closing price on the fourth day is lower than the previous entry price, add 40% of the position and go long.

7. When the RSI indicator with period 2 is in an overbought state, all positions will be closed before the closing of the day. That is, it is above the 70 level.

Note: The K-lines at all positions must be higher than above the 200EMA moving average.

This is a step-by-step method of increasing positions. For example, our total entry position is 2% of the total funds. We divide this total 2% into 10%, 20%, 30%, and 40% into batches. It can effectively reduce risks.

TPS trading strategy short trading rules:

The shorting operation of the TPS trading strategy is the opposite of longing. When the price is below the 200EMA moving average and the RSI indicator with a period of 2 continuously shows overbought (above the 75 level), start shorting in batches. The specific rules for increasing positions are similar to those of long positions, but in the opposite direction. That is, the first short position is 10% of the total funds, and then gradually increase positions to 20%, 30%, etc. according to market conditions. When the RSI indicator enters the oversold area (below the 30 level), consider closing all positions.

This strategy is a trend callback trading, and the risk is lower than other trading styles; we adopt batch entry to the market, which can reduce the average entry cost. Of course, RSI with a period of 2 is an aggressive short-term callback, and often a slight callback amplitude enters the market. You can also use the RSI parameters of a larger cycle according to your personal trading habits and enter the market after a larger callback. Compared with other strategies, this strategy is simpler and easier to use, but traders still need to adjust the practicality of the strategy according to their own situation.