Level 6: Advanced StrategiesInteractive
The 50-50 Strategy (Dr. Charles Schaap)
28 min readUpdated Mar 2026
Disclaimer
This educational content is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Trading involves risk of loss. You should consult a qualified financial advisor before making investment decisions. Swingfolio is a trade journaling tool, not a financial advisory service.
The 50-50 strategy is a multi-timeframe trend trading approach developed by Dr. Charles Schaap in ADXcellence: Power Trend Strategies (2007). The name refers to its reliance on the 50-day moving average and the 50-level on the RSI(20) as core decision points.
Two observations drive this strategy:
If any condition is not met, the stock is not a candidate.
Why RSI(20) Above 50?
The 20-period RSI staying above 50 during a pullback tells you that selling pressure is not overwhelming the trend. If RSI drops below 50, the correction may be deeper than a normal pullback. It could signal a trend change. This filter improves win rate.
Stop: $0.25 below the reversal low (the swing low where price turned at/near the 50-MA). This tight stop means you know quickly whether the trade works.
Exit when any occurs:
Trailing alternative: Once the trade reaches +2R, switch to a trailing stop at the 10-day EMA or 2x ATR below the highest close.
You could trade both strategies simultaneously since they target different types of trends and different pullback depths.
Strategy developed by Dr. Charles Schaap. Published in ADXcellence: Power Trend Strategies (2007). All strategy details presented for educational purposes.
Key Takeaways
Try This
Find a stock that is above both a rising 50-day and 200-day SMA. Add a 20-period RSI to the chart. Identify the last time price pulled back to the 50-MA while RSI(20) stayed above 50. Where would your buy stop and stop-loss have been? What was the R-multiple of the subsequent move?
Track 50/50 strategy trades in Swingfolio with automatic partial exit tracking and P&L calculation.
Start Tracking FreeDisclaimer
This educational content is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Trading involves risk of loss. You should consult a qualified financial advisor before making investment decisions. Swingfolio is a trade journaling tool, not a financial advisory service.