The video discusses a trading strategy that uses the Echo Forecast indicator created by Lux Algo and trend confirmation and volume indicators. The strategy involves taking long or short trades based on certain conditions met by the indicators. Backtesting showed a 64% win rate and a 473% gain on the account over 150 trades.

The Echo Forecast Indicator: A Future Predicting Indicator for Trading

Introduction

Predicting the future of an asset’s price is the ultimate goal of a trader. However, this is easier said than done. What if there was an indicator that predicts the exact future price of an asset? This video is a review of a trading strategy that utilizes Lux Algo’s Echo Forecast indicator, which claims to plot out the exact path to be followed by the price of an asset.

What is the Echo Forecast Indicator?

The Echo Forecast indicator was created by Lux Algo in October of 2021. Its main purpose is to plot out the exact path of the price of an asset. The indicator works by taking a price segment in the orange zone, searching for a similar segment in the evaluation window, marking it with a green rectangle, and plotting out a price prediction that is similar to it. The idea is that price history tends to repeat itself, and the indicator aims to predict this repetition.

How to Trade Using the Echo Forecast Indicator?

Trading using the Echo Forecast indicator is simple. When the prediction is bullish, take a long trade. When the prediction is bearish, take a short trade. However, the Echo Forecast indicator is used in conjunction with two other indicators: the SSL hybrid indicator by Mihkel and the Volume Oscillator by Tradingview.

SSL Hybrid Indicator and Volume Oscillator

The SSL hybrid indicator is used as a trend confirmation indicator. When the candles are blue, the market is in a bullish trend, and traders should only take long trades. When the candles are red, the market is in a bearish trend, and traders should only take short trades.

The Volume Oscillator is used to determine if there is enough volume in the market to push the price in the direction of the trades. When it is above the zero line, the market has enough volume, and traders should take trades. When it is below the zero line, the market does not have enough volume, and traders should not take trades.

Trading Example

For a long trade, the price candles should be blue and touching the top of the reference window. The prediction line should extend beyond the take profit level without touching the stop-loss level. The Volume Oscillator should be above the zero line. For a short trade, the opposite conditions apply.

Backtesting Results

After 150 trades, the win rate of the strategy using the Echo Forecast indicator was 64%, and the gain on the account was 473%. The profit factor was 2.67, and the strategy had five consecutive wins against five consecutive losses.

Conclusion

The Echo Forecast indicator is a future predicting indicator that aims to plot out the exact path of the price of an asset. When used in conjunction with the SSL hybrid indicator and the Volume Oscillator, it has the potential to be a profitable trading strategy. However, traders should always test and backtest any strategy before using it in live trading.