Yuri Garcia Narrow State Strategy (YGILS) by YGD_CONSULTING_LLC
By YGD_CONSULTING_LLC
Performance Metrics
- Author: YGD_CONSULTING_LLC
- Symbol: FPMARKETS:US100
- Timeframe: 1 hour
- Win Rate: 38.9%
- Profit Factor: 0.859
Description
OverviewThe Yuri Garcia Institutional Liquidity Strategy (YGILS) is a trend-following and volatility-expansion methodology designed to identify high-probability trading opportunities during periods of market compression and directional momentum.The strategy combines trend analysis, volatility measurements, momentum confirmation, and risk management into a structured framework that helps traders identify potential institutional participation while maintaining disciplined execution.The primary objective is not to predict every market move, but rather to participate when multiple conditions align in favor of a directional expansion.---Strategy PhilosophyMarkets alternate between periods of compression and expansion.During compression, price contracts, volatility decreases, and market participants become indecisive.During expansion, volatility increases, momentum accelerates, and directional opportunities emerge.The strategy is specifically designed to identify the transition from low-volatility environments to high-volatility environments.The Narrow State identifies compression.The Elephant Bar identifies expansion.The highest-quality opportunities typically occur when an Elephant Bar appears shortly after a period of compression and in the direction of the prevailing trend.---Core ComponentsTrend IdentificationThe strategy uses:• 20 EMA (Short-Term Momentum)• 200 SMA (Long-Term Trend)Bullish Environment✓ Price above 200 SMA✓ 20 EMA above 200 SMABearish Environment✓ Price below 200 SMA✓ 20 EMA below 200 SMAThis trend filter prevents traders from taking long positions against a bearish market and short positions against a bullish market.---Narrow StateA Narrow State occurs when the distance between the EMA 20 and SMA 200 contracts below a user-defined percentage threshold.Formula:Distance % = |EMA20 − SMA200| ÷ SMA200 × 100The Narrow State represents a market compression phase.Historically, significant market moves frequently begin after periods of compression.The strategy seeks to participate during the transition from compression into expansion.ImportantThe optimal Narrow State threshold depends on the instrument, timeframe, and market volatility.Lower values produce stricter setups and fewer signals.Higher values produce more signals but may increase market noise.Traders are encouraged to optimize this setting based on the specific market being traded.---Elephant BarsAn Elephant Bar represents a significant expansion in volatility and directional conviction.The candle body must exceed the Average True Range (ATR) multiplied by the Elephant Bar Multiplier selected by the user.Formula:Candle Body Size > ATR × Elephant MultiplierExampleATR = 20 pointsElephant Multiplier = 1.5Required Body Size = 30 pointsAny candle whose body exceeds 30 points is classified as an Elephant Bar.---Bullish Elephant BarRequirements:✓ Bullish Candle✓ Body exceeds ATR threshold✓ Bullish Trend ActiveBullish Elephant Bars suggest aggressive buying pressure and potential institutional participation.---Bearish Elephant BarRequirements:✓ Bearish Candle✓ Body exceeds ATR threshold✓ Bearish Trend ActiveBearish Elephant Bars suggest aggressive selling pressure and potential institutional participation.---Why Elephant Bars MatterInstitutional traders typically enter positions using significant volume and liquidity.This often creates unusually large candles relative to recent market activity.Elephant Bars help identify those moments where participation increases dramatically and may signal the beginning of a directional expansion phase.---RBI and GBI Confirmation PatternsThe strategy includes continuation confirmations.RBI (Red Bar Ignored)Bullish Continuation PatternRequirements:• Previous candle closes bearish• Current candle closes bullish• Current candle closes above previous high• Bullish trend remains activeThis pattern suggests buyers have regained control.---GBI (Green Bar Ignored)Bearish Continuation PatternRequirements:• Previous candle closes bullish• Current candle closes bearish• Current candle closes below previous low• Bearish trend remains activeThis pattern suggests sellers have regained control.---Entry ConditionsLong PositionsA BUY signal occurs when:✓ Bullish Trend Active✓ Narrow State Active✓ Bullish Elephant Bar OR RBI Pattern✓ No Existing Long Position---Short PositionsA SELL signal occurs when:✓ Bearish Trend Active✓ Narrow State Active✓ Bearish Elephant Bar OR GBI Pattern✓ No Existing Short Position---Risk ManagementThe strategy uses ATR-based stop loss calculations that automatically adapt to changing market volatility.Formula:Stop Loss = Entry ± ATR × MultiplierThis helps maintain consistent risk management across different instruments and market conditions.---Take Profit LogicThe strategy uses configurable Risk-to-Reward ratios.Formula:Target = ATR × Multiplier × Risk Reward RatioExample:Risk = 50 pointsTarget = 100 pointsReward Ratio = 2:1This allows traders to maintain a structured and repeatable approach to position management.---Inputs and CustomizationATR LengthControls volatility calculations.Higher values create smoother signals.Lower values create faster reactions.---ATR MultiplierControls stop-loss distance.Higher values provide more room for volatility.Lower values create tighter risk control.---Risk Reward Ratio (RRR)Controls profit target distance relative to stop-loss distance.Common values:• 2.0• 3.0• 4.0---Elephant Bar MultiplierControls how large a candle must be before being classified as an Elephant Bar.Higher values:• Fewer signals• Stronger momentum requirementsLower values:• More signals• Faster entries---Narrow State PercentageControls how close the EMA 20 and SMA 200 must be before a compression phase is recognized.Smaller values:• Stricter setups• Higher selectivityLarger values:• More opportunities• Increased signal frequency---Best PracticeThe strategy performs best when used as a confirmation tool rather than a prediction tool.Wait for trend alignment.Wait for compression.Wait for volatility expansion.Then execute according to the rules.Patience and discipline are often more important than prediction.The market rewards consistency more than excitement.---DisclaimerThis strategy is intended for educational and research purposes only.Past performance does not guarantee future results.Always perform your own testing, validation, and risk management before trading live capital.