Perfect Profit, Average True Range (ATR)

Understand Robert Pardo's Perfect Profit metric with ATR. Learn how to benchmark trading strategy performance by comparing actual results to theoretical maximum

Published · Updated · Methodology: Technical Indicators

Part of: ATR & Volatility

  • Methodology: Technical Indicators
  • Content type: educational
  • Timeframes: Daily, 60-minute, 240-minute
  • Markets: Crude Oil, NASDAQ, S&P 500 (ES.D - E-mini S&P 500 futures), AMD (midcap)

Indicators used

  • Perfect Profit
  • ATR

Source video

Decoded from: The Best Way to Compare Trading Strategies 🚀 by Ali Casey | StatOasis — watch the original

Key timestamps:

  • 0:00 - Compare Trading Strategies Across Markets
  • 1:49 - Measure Perfect Profit in Trading
  • 7:27 - Find Best Strategy for Any Market
  • 1:49 - 'The concept actually extremely simple. You basically measure the perfect profit for any market. Meaning you are buying every low and selling every high.'
  • 3:00 - 'The indicator that I built is called the perfect profit and this is the indicator in yellow.'
  • 3:20 - 'the indicator using the price and the retracement percent. So in this case we are using the close to determine the price and five denotes to 5% distance between the pivot in order to take it.'
  • 5:00 - 'Instead of trial and error on every market and every time frame, we can use the average true range multiple and that will hug the swings much better than any trial and error we do.'
  • 10:40 - 'So, the perfect profit for the past 18.5 years is $1 million on the S&P 500 and it's about $1.3 million on the crude oil. And now we can take our strategy, get the net profit during that period, divide it by this number and we get the metric.'

Strategy overview

Average True Range measures how far an instrument typically travels over a bar, which turns raw price movement into a volatility unit that adapts to each market. What makes this entry unusual is where that unit gets applied: not as an entry trigger or a stop-loss distance, but inside a measurement tool. Here ATR defines what counts as a meaningful swing in the first place — the threshold a pullback must exceed before a high or low is registered as a genuine pivot rather than noise.

The source is Ali Casey's video for StatOasis, "The Best Way to Compare Trading Strategies 🚀", which introduces an indicator the creator calls Perfect Profit: the theoretical ceiling of a market, obtained by buying every low and selling every high over a period. As he puts it, the concept is "extremely simple" — the difficulty is mechanical, because a computer needs a rule for what qualifies as a low or a high. A fixed retracement percentage answers that question the same way in a quiet index and a violently moving one; substituting an ATR multiple lets the pivot definition breathe with each instrument's own volatility, which is precisely why the video reaches for it.

That distinction is the whole point of the video's framing. If the yardstick itself is market-dependent, comparing a strategy's results across symbols or across the daily, 60-minute and 240-minute charts is comparing incompatible numbers; an ATR-normalized benchmark is an attempt to put them on one scale. This page catalogs Perfect Profit and its ATR-based variant as the source video presents them — a way to measure and compare performance, not a set of entry and exit signals.

Topics

perfect profit · average true range · atr indicator · trading strategy · pine script strategy · technical indicators · strategy comparison · tradingview strategy · crude oil trading · nasdaq trading · s&p 500 futures strategy · daily timeframe strategy · 60-minute trading · 240-minute trading · pardo perfect profit

Frequently asked questions

What is "perfect profit" in trading?

It is the theoretical maximum a market could have returned over a period — the result of buying every low and selling every high. It is not tradeable; it is used as a ceiling to measure how much of a market's available movement a strategy actually captured.

Why use ATR instead of a fixed percentage to detect pivots?

A fixed percentage applies the same threshold everywhere, so it flags too many pivots in a calm market and too few in a volatile one. An ATR multiple scales the threshold to each instrument's recent range, keeping the definition of a swing consistent in relative terms across symbols and timeframes.

Is this a trading strategy or a measurement tool?

The source video presents it as a measurement and comparison tool. It is a benchmark for evaluating strategies across markets rather than a system with defined entries and exits, which is why this entry describes the concept rather than a rule set.

How can I study concepts like this one?

Start from the source video itself, then reproduce the measurement on your own charts before drawing conclusions. Strategy Decoder catalogs strategies and indicator concepts extracted from video sources so you can identify what an approach is built on and test it 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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