If you ask me, “Hey Dylan, what is your secret for success?” , BACKTESTING.
What is backtesting?
Backtesting is going over past market data and comparing your strategy to how the market reacted in the past, so you can find an edge in the uture. I can honestly say I have spent much more time backtesting my strategy than I have actually implementing it into live data. Practice makes perfect.
I would spend entire days, even weeks, backtesting my strategy over and over and over. Different pairs, different timeframes, to see all the different possible perspectives and how my strategy could be implemented into each scenario.
I first created my platform, my base of knowledge, from there I create my masterpiece.
If you feel as though you do not yet understand the market, the sole reason is because you have not done the proper amount of backtesting.
How can I backtest my strategy?
Simple. Pick a pair, find your strategy and the confirmations you use to trade. Then apply these confirmations to past data and compare how the market reacted during certain times.
We backtest because we want to understand the market. When it move, why it moves and what provokes the moves. This can all be understood via proper backtesting.
Here is a list of confirmations that I use in my backtesting:
*What day of the week is it? (S/M/T/W/T/F)
*Wed-Thur Reversal (Mid Week Reversal)
*Stophunt / Induction NY or London Session
*Stophunt / Induction to highs or low
*SignatureTrade reversal setup
*Macro & Micro confirmations
*Daily Structure confirmations (M&Ws)
& Many more, we will be making a video on how to properly backtest within the coming month.
