40/20 Trend-Following Strategy

Discover a robust trend-following strategy using 40 and 20-bar lookback periods for futures markets. Ideal for daily, 720m, and 360m timeframes.

Published · Updated · Methodology: Technical Indicators

Part of: Trend Following

  • Methodology: Technical Indicators
  • Content type: strategy
  • Timeframes: Daily, 720 minutes (12 hours), 360 minutes (6 hours)
  • Markets: S&P 500 futures, British Pound futures, Gold futures, Natural Gas futures, Coffee futures, Multiple futures markets

Source video

Decoded from: 40 In 20 Out: The CTA Strategy You’re Not Using 🚫📊 by Ali Casey | StatOasis — watch the original

Strategy overview

Trend-following is the oldest systematic idea in futures: stay with a market while it keeps moving one way, and step aside when it stops. What distinguishes this entry from the rest of the category is that its name is also its specification — a 40 paired with a 20, an entry window and an exit window of deliberately unequal length. In the channel-breakout lineage that convention denotes a longer lookback governing when to commit and a shorter one governing when to leave, an asymmetry that encodes a whole attitude toward risk: slow to enter, quick to exit. The source video is the authority on exactly how it applies the pair.

The video, "40 In 20 Out: The CTA Strategy You're Not Using", comes from Ali Casey's StatOasis channel and frames the rule as a CTA method — the label for the managed-futures industry whose published return streams have long been dominated by trend-following across a diversified basket. That framing changes what the strategy is for. A CTA-style rule is not designed to be right often on one instrument; it is designed to survive across many, which is why serious discussion of it lands on holding period, market breadth and position sizing rather than entry precision. The title's "You're Not Using" is a claim about neglect among retail traders, not a claim about results.

The recorded timeframes — Daily, 12-hour and 6-hour — form a doubling ladder rather than an intraday set, which fits a rule counted in bars instead of clock minutes: the same 40/20 pair spans a very different calendar horizon on each rung, making the timeframe choice a speed dial on one underlying idea. No rule set has been extracted for this entry, so this page covers the concept and points to its source rather than offering a decoded breakdown. The questions worth taking to the video are which price series the two windows are measured against, whether the shorter window acts as a trailing exit or a reversal, and how size is set once a position is on.

Topics

trend following strategy · technical indicators · futures trading strategy · swing trading · daily trading strategy · s&p 500 futures · gold futures strategy · pine script · tradingview strategy · 40 20 strategy

Frequently asked questions

What is a CTA trend-following strategy?

CTA stands for Commodity Trading Advisor — the managed-futures managers whose returns have historically been driven by trend-following: systematic rules that enter in the direction of a sustained move and exit when it stalls, applied across a diversified basket of futures markets rather than a single instrument.

What does "40 in, 20 out" mean in a trend-following system?

In the channel-breakout family, a paired set of numbers like this conventionally refers to two different lookback lengths — a longer one for entries and a shorter one for exits — so the system commits slowly and gives back less when a trend ends. The source video is the reference for how this particular version defines and applies them.

Why is this strategy listed with Daily, 12-hour and 6-hour timeframes?

Those are the timeframes recorded for this entry, and they form a doubling ladder rather than an intraday set. Because the rule is expressed as bar counts, the same numbers cover a much shorter calendar window on 6-hour bars than on daily bars — so the timeframe is effectively how fast you want the same logic to run.

How should a trend-following strategy like this be evaluated?

Trend-followers are normally assessed over long histories and across several markets rather than on one instrument or a short sample, since their return profile typically depends on a small number of large winning trades separated by many small losses. Strategy Decoder catalogs strategies like this one alongside their video sources so you can study the concept before building and testing a version on TradingView.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

Strategy Decoder catalogs 2,229 decoded strategies. Each one is extracted with confidence scoring, cross-linked to the indicators it uses, and kept up to date as new videos are processed daily. Load this page with JavaScript enabled to use the interactive tools, or start from the strategy explorer to filter by methodology, market and timeframe.

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