Video summary

I Stole a Trading Strategy Worth $60 Billion

Main summary

Key takeaways

Finance

Finance-focused summary (momentum/trend + volatility-based position sizing)

What the strategy is (from an “AHL” research paper)

  • A multi-horizon momentum strategy that uses trend lines.
  • It does not forecast direction; it measures the direction of movement that’s already occurring.
  • Reported backtest claims:
    • Tested on 140 years of data (back to 1880)
    • 58 markets
    • Positive returns every single decade since 1880
    • “Never lost money in any decade” (as stated in the video)
    • Robustness claimed across major regimes/crises: wars, depressions, 2008, dot-com bubble, and market crashes

Direction “rating” framework (step-by-step)

A rule-based scoring system assigns a score using multiple time horizons (example uses daily timeframe):

  1. Draw a trend line from 1 week ago → today
    • Uptrend = +1
    • Downtrend = -1
  2. Repeat for:
    • 2 weeks ago → today
    • 1 month ago → today
    • 2 months ago → today
  3. Add the four scores to get a total score in: {+4, +2, 0, -2, -4}

Map score to trading stance / exposure:

  • +4 = fully long
  • +2 = half long
  • 0 = no trade
  • -2 = half short
  • -4 = fully short

Position sizing framework (risk + volatility scaling)

The video gives an explicit sizing formula:

  • Position sizing = score × target_risk / volatility

Where:

  • score: trend score from the framework above
  • target_risk: a user-defined risk amount (e.g., % of portfolio) they’re comfortable losing
    • Example: $100,000 portfolio risk 10% = $10,000 target risk
  • volatility: computed from recent daily returns
    • Compute average daily move over 30 days (described as “yesterday close to today close”)
    • Example given for Bitcoin (BTC): 2.03% average daily
    • Convert daily to annual using × 19.1 (stated as √365)
      • 2.03% × 19.1 ≈ 39% annualized volatility

Risk logic emphasized:

  • Higher volatility → smaller position size
  • Lower volatility → larger position size
  • The video claims this is a key reason the strategy “survived” crashes, because sizing contracts during chaos.

Explicit trade executed in the video

The presenter performs a live test trade:

  • Long ticker: SCHW (Charles Schwab)
  • Scoring outcome for SCHW:
    • Trend lines on all four horizons (1 week, 2 weeks, 1 month, 2 months) are upward
    • Total score = +4
    • Therefore: fully long
  • Position sizing outcome:
    • Presenter states the computed sizing equals $60,000
  • Broker:
    • Mentioned as Charles Schwab (using their broker platform)
  • Reported performance:
    • Entry context: “Wednesday morning came,” and the analysis/editing date is referenced as July 1, 2026
    • Results reported later on August 7 (about a little over a month after entry)
    • Trade moved up 12%
    • Presenter’s P&L: + $7,200
    • Profit-taking: exited near/at “all-time highs,” rather than holding longer

Recommendations/cautions and disclosures

  • Framed as an experiment (“guinea pig” testing with own money).
  • No formal “not financial advice” disclaimer is shown in the provided subtitles.
  • Practical cautions implied by the rules:
    • No prediction—only trade when the trend score indicates exposure.
    • Sizing automatically reduces during high-volatility periods.
    • The presenter took profits rather than trying to maximize further gains.

Tickers / assets mentioned

  • SCHW — Charles Schwab (the live trade)
  • Bitcoin (BTC) — used only as an example for volatility calculation (2.03% daily → ~39% annualized)
  • AHL — referenced as the hedge fund/system source of the research model (not a traded ticker in the video context)

Key numbers and timelines

Backtest

  • 140 years (from 1880)
  • 58 markets
  • Claims: positive returns every decade / “never lost money in any decade” (as stated)

Scoring system

  • Score outcomes: +4, +2, 0, -2, -4
  • Horizons: 1 week, 2 weeks, 1 month, 2 months

Volatility conversion

  • Example daily volatility: 2.03%
  • Annualization factor: × 19.1 (= √365)
  • Example annualized volatility: ~39%

Live trade metrics

  • Entry: implied around late June 2026 (edit date referenced as July 1, 2026)
  • Results reported: Aug 7, 2026
  • Time held: a little over a month
  • Price move: +12%
  • P&L: +$7,200

Position sizing

  • Full exposure example for score +4: $60,000
  • Half exposure logic example (score +2 / -2): $30,000 mentioned as conditional logic

Presenters / sources mentioned

  • AHL (hedge fund): described as the source of the research paper/model (started 1987, run by computers)
  • Presenter of the video (unnamed in subtitles)
  • Telegram: where the presenter says a “cheat sheet” is provided (no author named in the subtitles)

Original video