Professional Strategy Backtest


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Video Transcription:

Look at all the setups that this strategy has healed over the past five or six sessions. Where on this video we’re not going to back this to sort of because he will make a long of a video but when you’re back this is a strategy you have to go further than five sessions. I would said say that least a month of back testing is needed for a short term strategy and that would be cutting it very short. So we’re going to start with the latest trade or the latest signal and we are going to go two weeks or so.

Now you can see that right here we have a fractal that aligns perfectly with the daily resistance one and we have a better than the one to one risk to reward scenario. But we take a look at the ADR and from the bottom of…or from the day’s low, until the daily resistance one, we have a 96 piece and we have an A.D.R. over the last 10 days so we are not going to be taking that trade, and as you can see we break to the outside. But then, well we don’t get taken out because right here and then we would move it to this fractal and to this fractal.
And then again to these, okay?

Professional Strategy Backtest

We don’t get taken out on the last but we don’t take the trade either because of the ADR. Now the trade that we do take…Well, this is actually not…and I highlighted this, this is not a trade that I would take and the reason it is not a trade I would take because it’s more…Well the fractal formed more than ten pips [SP] from the daily pivot which means that this is not a strong confluence. A strong confluence with this one right here because the tips of the fractal is five pips away from the from the daily pivot. In this, we will we put the pending order right here. Then we put our stop losses. At the next down fractal we more stop loss a little bigger because then when we get feel on the position press reversed and we lost on that trader thirty bips [SP]. Okay so the first trade we have lost thirty pips. I’m keeping a notepad on the side and I’m going to count the pips that we have made versus the pips that we have lost and the number of trades that we win versus the number of trades that we have lost be to get an overall sense of profitability and win ratio on the strategy. I’m going to show you the results at the end of the practice. Now this was a loss.

Professional Strategy Backtest1

Right here we have a great win. As you can see price broke with a fractal that conflicts perfectly with the daily resistance one. Remember we hit our targets all the way up here for a 50 or a 51 pip and so that’s a fifty-one pip win. We go back in price action and right here, we don’t get a set of two to go short below the daily pivot because those fractals are…Well actually this fractal is too far away from the pivot, but this fractal right here is right on spot. It is less than ten pips away so these are trades that we should have taken and that gave us…this one gave us a loss of, let me check it out, thirty pips. But this is the fourth trade minus 30 pips on this. We do have this one but here. That structure aligns perfectly with the daily pivot. When we go short and we continue to trail our stops and this is important. This is why we trail our stops guys because sometimes our targets are not going to get hit and of by trailing our stops to the next up front from in this case because we are short, we are going to protect those profits and we are going to be taken out if the targets are not hit, we are going to be taken off it and in this case we do have a profit of twenty pips. So the third trade is a profit of twenty pips. We already went to this last and we go back to the previous session where we have a great trader right here on which we made.

Professional Strategy Backtest2

So basically a fifth trade is a positive trade pips, all right? That we are going to continue and of course right here we have the upside that we don’t take because this is too big. The price had already moved one hundred twenty-four pips to the upside which is almost the ADR of the last ten days. So this is not that we are going to be taking. The signal to buy this break or to the upside and we thought this signal this fractal right here, we made forty-eight pips. On the six trade. Before that, we had a signal for a breakout to the upside from a bear zone to a bull zone and sadly, disposition got taken out on a small loss for around eighteen pips. So you can see that when we win we would big, and when we lose we lose small. This is the core of the struggling big losing it small.

Professional Strategy Backtest3

We are going to go ahead and look at…Well in this session, we don’t have a breakout really. Some very pricey chop action. We need strong moves and a right here we don’t have a breakout. Now some of you might think that this is a setup because we broke with the fractal but remember that the fractal that is to be broken is the latest printer’s fractal. So when this fractal prints, this fractal is no longer usable, or for a strategy, of course. We do have a trade that was yield in a nice result. Was a better than one to one risk to reward ratio and you can see that we broke with the trade we move it stops from this fractal to this fractal and we have literally hit our targets for a win of about forty-four pips. So that’s eight trade plus forty-four pips.

Now if we go back to two the previous session, I’m sorry, you can see that right here the fractal that got broken is this one. The one in the middle and price was very choppy at this time. I mean we broke with a fractal. We got in on the trade and if we grab a horizontal line, I’m going to show you how this trade performed. Fragment to the outside so we moved or start the market. Right here is the next session and we move our fractal. Right here we moved our fractal and we got stopped out on a very large win of about, let me see, forty-eight pips. Okay? So that’s the ninth grade profit of forty-eight pips. So basically I could go back for more sessions but I want to show you the profitability and the win ratio of the strategy.

Professional Strategy Backtest4

So these are the results for the for the back side of the strategy. We made overall a hundred and ninety-seven pips in eight sessions. That gives us an average win of twenty-four point six two five pips per session and a win rate of two to one. This means that any trader using this strategy has twice as many winning trades then losing trades and basically you are going to be making money if you are well disciplined enough to trade a strategy.

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