Speaker A
What's up, everyone? Today, we're going to be backtesting my continuation and reversion strategy just for the month of May. Side note, the strategy does change month to month a little bit based on the market conditions. If it's drifting to
JJ Simon backtests his $1.5M continuation and reversion trading strategy for May, adapting to market conditions and optimizing risk management.
Key Takeaways
- Backtesting helps refine strategies but differs from live trading conditions.
- Adapting entry models monthly based on market environment improves trade effectiveness.
- Risk and reward ratios are kept consistent to optimize prop firm pass rates.
- Fair price is dynamic and adjusted throughout the trading day based on consolidation and volume.
- Waiting for clear breaks of structure without wicks increases the probability of successful trades.
What the video covers
- JJ Simon demonstrates backtesting his continuation and reversion trading strategy specifically for May.
- The strategy adapts monthly based on market conditions such as all-time highs, corrections, or stagnation.
- He uses market open candles and fair price concepts to determine entries and exits.
- Risk management involves fixed stop loss and take profit levels, typically risking $500 to gain $750 per trade.
- Contract size varies based on opening candle size and distance from fair price to optimize win rate.
- He emphasizes waiting for breaks of structure without wicks for stronger trade signals, especially at all-time highs.
- The video includes live commentary on trade decisions, wins, losses, and adjustments to fair price throughout the day.
- JJ discusses the impact of news events and volume on trade outcomes and strategy adjustments.
- He highlights the difference between backtesting and live trading, focusing on prop firm pass rate optimization.
- The video provides practical insights into managing trades, adjusting contract sizes, and interpreting market structure.
Chapters
- 00:00Introduction and Strategy Overview
- 02:20Break of Structure and Short Trades
- 04:45Long Bias and Candle Analysis
- 06:49Considerations at Market Bottom and News Impact
- 09:03Optimizing Contract Size and Risk Management
- 13:22Fair Price Adjustments and Trade Entries
- 17:00Trade Outcomes and Strategy Refinements
- 23:20Summary and Final Thoughts
Full Transcript — Download SRT & Markdown
Speaker A
all-time highs, if it's dumping, correcting, or stagnating in the middle, I take a little bit of a different entry model, but I'm just going to do May right now. All right, we are on May 1st.
Speaker A
I'm not going to be doing any 8:30 a.m. news trades because I am not able to look at the actual values of them from here, but I'm just going to be doing market opens for New York AM continuation, reversion, all that sort
Speaker A
of stuff. So, first one, opening candle 33 points. I'm automatically going to do half my normal contracts and it's going to buy just because the opening candle is green and just that's sort of how you do continuation trades.
Speaker A
Let me see if I can just free take profit stop loss and buy. I'm just going to risk 500, go for 750 every single trade. Um, backtesting is a little bit different than live, but I'm going to give it my best shot. I
Speaker A
don't really do it anymore. So, here's the first one. Let's speed it up. All right, there we go. Take profit.
Speaker A
[clears throat] Now, I am going to mark out what I think is the fair price, which is just the pre-open price. And let's see what it does in terms of a reversion.
Speaker A
I'm going to wait for a break of structure. Uh, because we're at all-time highs, I want to wait for a break of structure to have it like really be ready to short. I don't want to short off displacement. So, I'll just wait
Speaker A
till structure breaks, which it does right here. And in this case, I'm just going to use I'm going to see how many points there are. So, just looking at the right side, there is over 100 points. So, um actually, I'll just use
Speaker A
I'll just use a one contract for every single one no matter what. It [clears throat] is going to be a little bit less profitable, but just keep everything standard, same risk. And then I'll switch contracts. I'll only do the half
Speaker A
contract on opening opening one. And that one loses, but that's fine. Now, I'm going to stop at 11 a.m. But let's see if there's any other shorts presented. Now, I'm going to bring my fair price back up to here
Speaker A
because we had a volume spike and it continued up instead of coming back to the fair price. So, I can change fair price a little bit throughout the day if you did not know that.
Speaker A
I change fair price throughout the day based on most recent consolidation. Now, let's wait for a break of structure with no wick because we're at all-time highs here. I really want a a very strong short. Um, and it looks like we
Speaker A
get the break of structure, no wick at the bottom. and looks like a pretty standard shorts.
Speaker A
Actually, I'm going to change it. I'm just going to do half. So, you can change the amount of contracts you use based on how many points to the fair price. It is something I do. I wasn't sure if I was going to tell people that
Speaker A
on YouTube. I was just going to say everyone just do the same thing as always. But this is a little optimization you can do to help increase your win rate. Might as well. There you go. So, that's the continuation. That is
Speaker A
the reversion. Very good day today. Let's see if it does go back to AM. It doesn't. I don't [clears throat] think it will just because there's a bunch of consolidation here and then it moved up farther. So I would think this is the
Speaker A
new fair price and then yes, let's go. I was correct. All right, so now we are on to Monday New York AM. Some sort of news that I obviously don't know what that was. I don't have news up, but this
Speaker A
definitely looks like a very fair price. Lots of consolidation and the market is about to open. Let's see if we take any continuation. So this would be a great time to do continuation short. I'm just going to do one contract because no need
Speaker A
to cut in half. The opening candle was not very large. So just the standard - 500 plus 750 [clears throat] gets really close and unfortunate loss, but it got very close uh as expected. So now we'll just look for a reversion since the
Speaker A
continuation was not a win. Going to need it to move quite a bit away. It doesn't look like it's going to because it's Monday, but let's see if we can get a decent amount of points in our favor.
Speaker A
Uh, it's going to be a while. [clears throat] Okay, there we go. I am down at 11. So, let's see if I do get an entry before 11. Just wait for the structure to break. Wick, but no break.
Speaker A
I want to close below. And there we go. So, this one seems good. Fair price is probably this. This one's from the previous day. I don't need that. So, just take this one and then you can see how many points we're
Speaker A
getting. We're getting about 50, maybe 60. So, just standard one contract and then go for 760, 750, whatever, 500 stop loss. And then we'll see if this one wins.
Speaker A
Oh my gosh. One tick away. There we go. One tick away and then it wins. Uh, definitely done for the day at 11. And this is a crazy no volume day. Probably no volume day is why the continuation
Speaker A
loss, but who really knows? All right, we are now on Tuesday. Let's see what the opening candle does. Okay, it is green, but there's a huge wick on top.
Speaker A
So, my bias is going to be longs, but I'm not going to buy right now just because of the huge wick.
Speaker A
And if it closes above the Oh, it's going to say if it closes above, I will buy. It closed literally at the same exact one. So, I'm just going to wait one more candle. Okay, this one's green. I'm I'm going to buy here just
Speaker A
with one contract. It's probably fine. Don't need a bigger stop here. [clears throat] and then we'll see what this one does.
Speaker A
Okay, this one wins. Now I'm going to wait for a reversion back to this price.
Speaker A
Just this consolidation here. Let's see what we get. Okay, there we go. Break structure.
Speaker A
Everything seems good to go except for the fact that news is coming out at 10.
Speaker A
I'm going to do 0.5 contracts because I'm getting exactly 750 to the fair price. So, [clears throat] perfect.
Speaker A
And then news comes out. I would move stop to break even, but I'm in drawdown, so I don't need to let it play out. Okay, some movements and it goes the wrong way. Well, it was worth a try. Entry seemed fine. Uh, it
Speaker A
was at all-time highs, so never the best short all-time highs, but entry very good. Just standard break of structure and then unfortunately not enough movement in our favor. I will look for one more if it breaks this consolidation
Speaker A
here. Yep, there it goes. I'm [clears throat] gonna do one because fair price is most likely not this consolidation or this one right here.
Speaker A
And then we are getting enough points to go for 750 500. And we'll see what this one does.
Speaker A
Going down almost. Well, unfortunate loss. It did revert to this pair price. So I guess now we know this is the pair price going forward.
Speaker A
But that doesn't help us unfortunately. Did not revert all the way. So on to the next day. All right. Now we are on Wednesday. Let's see what the opening candle does. Okay. Opening candle is red. Continuation shorts might be an
Speaker A
option here. Um they're not the best option though. I think fair price is quite higher. It is likely about here. Reason for that is there was two green pieces of news overnight and you're at the very very bottom of a move. I would be very
Speaker A
careful to short the absolute bottom. I would like it if it opens here 100% to short back to this. I'm just treating this as a fair price because it's the consolidation after this news. So, I would not short if it breaks if it goes
Speaker A
up. Okay, I'm going to [clears throat] buy with 0.5. Opening candle was 43. So, buy with 0.5 getting 7050. Okay, exactly to where I thought fair price was. So, we'll just let that play out then. Okay, there's a
Speaker A
win. Um, and now I'm actually going to think about a No, I'm not going to think about a short. I was going to think about a short, but instead of the opening being the fair price, I honestly think the pair price is now up here or
Speaker A
here. Like, it's one of these two, not t
Speaker A
frame biases to fail this move here. So, I am long biased. I might not even revert this. I'm gonna wait for Okay, lots of consolidation in there. So, 100% fair price there.
Speaker A
Uh we'll see if it moves up to where I can take Oh, I could even maybe I can buy if it goes down farther.
Speaker A
Uh it doesn't look like it. Okay, it's about to hit 11 and it's just consolidating in the bare price and now it's drifting.
Speaker A
Yeah. So, I'd be done for today. Just one continuation. More of a macro play.
Speaker A
All right. Now, for Thursday, it looks like it's opening in the middle of the overnight range. So, it is probably opening at a fair price. I'll just mark out the open. And all right, shorts seem like they would
Speaker A
be good to take with 17 point candle. So, I'll just do one one contract here.
Speaker A
I have to drag to 500 750 and we'll see what this one does. This one loses. Very large wicks this day.
Speaker A
Let's see. Um, if we get a good displacement, I'll buy. Okay. Well, there's the displacement, but it got back to fair price instantly.
Speaker A
Origin did not see an entry there. Uh, are we at all time high? Yeah. Okay. So, now to short, I want to break the structure just because it's at all time highs.
Speaker A
So, we'll see. Alltime highs consolidation. Is it going to break structure? Give it a minute.
Speaker A
Okay, give it another minute. Uh, is that structure? Nope. If you don't know what structure is, there should be like a good free YouTube video on it, but it's basically whenever there's a wick just like that, and it's
Speaker A
lower than these two. So, it's structure. Just wait for a close below it. Here we go. There's a close below, but there's a huge wick. Um, I would not short that one probably. Let me see.
Speaker A
Okay, I might go for a really long trade. The back testing P&L is going to be way different than proper P&L and live P&L.
Speaker A
Um, but I'm just trying to get you guys the strategy. Uh, so the results are not going to be totally accurate. Okay, there we go.
Speaker A
Breakup structure. No wick. I'm ready to short. Like even days like this, if I was on a specific account, I would even go for this. But it's hard to do that in back testing. Like I feel like it it can
Speaker A
easily revert all the way because it's just drifting at all time highs unfairly. It's hard to do that on a prop firm funded account, Eval account. Like depending on your account, this is an optional play that you could do. Okay,
Speaker A
there we go. So, if I wanted to maximize my account balance, I would do longer trades like that. I could also just literally just do 38 points. I don't know. I don't know what's best for back testing, but I'm just going to show
Speaker A
everyone the pass rate and that sort of stuff. And I guess I'll take long trades like that if I see them.
Speaker A
Uh, this one I took exactly at 11, so I'm very grateful it broke structure then instead of later. All right, now I'm on Friday, but I actually saw that there's red boulder news and it is actually going to give the results. I'm
Speaker A
not sure if they have tweets here in FX Replay, but I'm going to actually just trade the news like I would usually so I can give you guys an extra session.
Speaker A
Okay, let's see if we take a continuation. Continuation long seems fine here just because it was green and then this candle sort of confirming good displacement. I'll just do one contract.
Speaker A
I'll change this to 750. The thing is here I'm optimizing for prop firms pass rate because I'm doing a 1 to 1.5. Like there's better strategies if you're trading this on live. Okay, perfect. Now green news prices there. Let's see if I
Speaker A
get a reversion. breaking structure almost. There we go. Sell one. Okay, exactly 750 to fair price. Perfect. 500 here and then just play that one out. Should win because it's free news price. Yep, there we go.
Speaker A
Nice and easy. Now, let's see what New York AM does at 930. Don't want to skip it by accident.
Speaker A
Okay, green candle. So, 100% long bias today. Like very very very very strong. Um we took alltime highs in the morning.
Speaker A
So, this is the alltime high. So, first of all, we're very close to that. Second of all, the opening candle is green.
Speaker A
Third of all, news is green. So, I am very ready. Okay, there we go. I was going to say I'm very ready to long. So, that does it for me.
Speaker A
Uh, same risk as usual. Play it. And there we go. Take profit. Uh, fair price here. Consolidation here after news as well. There was consolidation here, but when open came, it got all the way back up to here and then consolidated here.
Speaker A
So, it changed fair price up to here. Now, let's see if I can get a reversion off this just break of structure. Maybe.
Speaker A
Nope. Okay, new fair price would be up here because there's a volume spike and it went away from what I thought was the fair price.
Speaker A
A little bit more of an in-depth bare price explanation through these back test videos, but that is always good.
Speaker A
Um, no breakup structure. It's like at the same level. We'll see if it does.
Speaker A
Okay, so it climbs up again further. So, I moved our price up to here.
Speaker A
Okay. Well, it reverted. Great. Uh, I kind of missed the displacement entry by clicking too fast. But, uh, it's definitely better to wait for breaking structure at all time highs.
Speaker A
Let's see. Are we going to get structure break? Nope. And it hits 11. So, on to the next day. All right. Now, we are on Monday the 11th. It is at a very, very fair price. The gap is like slightly
Speaker A
above. So, it's in the middle of the overnight range. I guess it's more slightly to the bottom. And then we can fill this move up here. So before even seeing the opening candle, I'm just going to guess long bias, but obviously
Speaker A
we'll see. Hey, there we go. Opening candle size 37. So let's do 0.5. There we go. Just like usual.
Speaker A
And that was quick. Very nice. Easy. I think this is probably a fair price, but we'll see if Okay. Wow.
Speaker A
It's moving. Okay, I missed the entry again. Whoops. Uh I should have entered right there.
Speaker A
But uh and there's not 75 points in my favor. So just going to do one contract and then go for 760 750 500 and we'll see what that does. There we go.
Speaker A
Crazy volume this day. Uh we'll see what happens. Let's see. Almost to 11 also. Okay. What am I doing? I just missed another one by clicking too fast.
Speaker A
Okay. Well, that was a mistake. Um, okay. I should have taken this with 75 35 to 50, but I mean, I'll just get in here and take it uh with one. So, I'll do 30.
Speaker A
All these numbers are confusing me while I'm doing this over here. I'll just do the smaller one. It doesn't matter.
Speaker A
Okay, they both won. Back to the fair price. Pretty easy trade. And it is 10:30. Let's see if we get another opportunity before 11.
Speaker A
Uh almost. And okay, it's about to break structure. We'll see if it closes. Wick.
Speaker A
Green candle. Green. Green. Green. Okay. I'm done. All right. Now we are on Tuesday. High time frame bias is long.
Speaker A
So let's expect a long drift on this day. Um now let's see what open does.
Speaker A
Okay. Open very large red candle. Uh I would just take a continuation short with 0.5 contracts just because open candle bigger than 25 as we always do and unfortunately lose but that's normal. Um let's see what it does from
Speaker A
here. Mark out fair price there and we'll see if we can get a reversion.
Speaker A
Okay, there's the reversion but no breakup structure. So, okay, I'm getting ready to long.
Speaker A
That's displacement. U but we're only doing break of structure in this video. There's a break of this structure right here. It's not the best for sure, but it is still a structure being broken.
Speaker A
I probably should have sized down. Whoops. But let's play it. There we [clears throat] go. They both would have won. All right. So, there's the reversion.
Speaker A
Yeah, it's continuing down. Opening candle is red. So, good short bias indicated by that. Let's see. There might be one more attempt. Oh I missed it again.
Speaker A
Uh, this was supposed to be the attempt. I can still do 0.5. It's still far enough away.
Speaker A
But yeah, that was supposed to be the reversion there and unfortunately lose. Maybe one more time before 11. Let's see if it breaks up. Nope. Okay, no break up. So, I am done. It's just dumping. Okay, on to the
Speaker A
next day. All right, so it's opening about in the middle of the range. High time frame could be either way. And let's do opening candle says to short.
Speaker A
So, I'm going to short with 0.5 contracts. And all these are NQ, by the way. [clears throat and cough] All right, there's the win. Now I'm going to revert to pre-open price.
Speaker A
That's a good displacement, but I'm just going to wait for break structure. Give it a bit. Give it more time. More time.
Speaker A
Okay. Well, good reversions, but no entry for break of structure yet. Huge wicks. Okay. If it breaks from this consolidation, if it breaks down, I'm going to adjust fair price to here. If it breaks up, I'm going to buy back to
Speaker A
the opening price. Okay, time to buy. And let's see how many points are we getting. Oh, we're getting a lot of points. So, I'll do 0.5 buy. And then let it play out.
Speaker A
And there we go. Nice easy win. I guess I'll let it play a bit more. See if we get any opportunity at 11. No. Okay.
Speaker A
So, it just consolidates more at fair price. Perfect. Really great reversion there just off the first break of structure. On to the next day. Here we are on Thursday the 14th. High time frame bias probably just longs. It's a
Speaker A
little bit to the bottom side of the overnight range. Uh so going to expect a long drift today and then we have alltime highs up there to claim possibly. Let's see what it does. First candle red. Okay, that's weird.
Speaker A
Oh, that's better. It is 26 points. So I would still do the 0.5. Um the opening candle slash this one. I guess you could also consider for the the special sizing the half size. There we go. Easy continuation as always. Uh just the
Speaker A
reason for this one is a broken close above this previous structure. No wick on top, two wicks projecting shorts, high time frame long. So everything lines up except the opening candle which is more than enough for me to take it.
Speaker A
Definitely not the best. Obviously you want to do in the direction of the open, but some days it's very artificially created if you if you know what I mean.
Speaker A
Uh now let's just look for a reversion back to this price. Probably a fair price. Also consolidation here might be fair. We can consider that in a second.
Speaker A
But I'm definitely going to have one attempt for sure. Let's see. That's displacement, but no break structure yet.
Speaker A
There's the breakup structure. And let's do 0.5 contracts just so we get a larger stop and the same takeprofit and then play it out. There we go. Easy.
Speaker A
[clears throat] Maybe one more attempt. We'll see what it does. Okay, I'm moving fair price up to here.
Speaker A
I have a green with this area here. So, it's either here or here. So, I put it in the middle of them. Uh because my whole goal here is to have a bias. Okay.
Speaker A
It didn't break below. It broke to the even with it. So, not a strong breakup structure there. Is it going to hit 11 or we going to get one more short?
Speaker A
Almost. Any breaking structure? Yep. Structure breaks. Um, so you could consider one right here.
Speaker A
There's a pretty large wick at the bottom. Is it alltime highs? Yeah. I mean, it's 50/50. If there's a large wick, you can wait for the next candle to confirm.
Speaker A
Okay. That one's indecisive. Okay. I really don't want to trade after 11 because it always just drifts straight up. Yeah, nothing here. It's probably just going to drift. Yeah, whenever it hits alltime highs, it's just a drift.
Speaker A
So, it's hard to short that unless it actually breaks structure before 11. This one's it's decent, but the huge wick at the bottom kind of scares me.
Speaker A
Right now, we are on Friday the 15th. Let's see. Okay, red candle. We'll look for some continuation shorts if I get an entry. This one's an optional entry. It's a 34 point candle.
Speaker A
Uh opening candle is very small though. 19 only 19 points. I would prefer it to close below structure.
Speaker A
Yeah, that one that one should work. Just do one. It is a 50 point candle. Okay, this one's this one's really weird. Okay. Uh the reason why I'm a bit hesitant is it's at the all-time low of the last 24
Speaker A
hours. And it's never good to be shorting the absolute bottom. Opening candle is red. It did close below structure. I'll just sell with one. I'm more trading off like a quick continuation rather than a bias like the larger ones.
Speaker A
Okay. Oh, it didn't work anyway. So, that's all right. Whatever. On to the reversion, which is always a bit better.
Speaker A
There's the fair price. Now, let's see. Do we ever Okay. Break a structure, but like three points in our favor.
Speaker A
Let's [clears throat] wait. There's another break. And this one seems good. Just do one.
Speaker A
750 500. There we go. Let that run. And okay, I guess it lost. Yeah, it lost before it won, I think. I don't know. It went too fast. I was Yep.
Speaker A
Okay. Well, it lost right before winning. Unfortunate. Um, but great reversion trade in general. Maybe possibility for a short. Yep. The structure here just got broken. Sell one 750 and 500.
Speaker A
That was pretty easy. Uh maybe one more before 11 if it jumps up or down.
Speaker A
Okay, it's consolidating at fair price. So, we are done for this day. All right, now we're on Monday the 18th. Let's see what sort of action we're getting. There was no news. I mean, this was obviously some sort of news, but it wasn't
Speaker A
planned. So, we'll see how it reacts to this area right here. Opening candle red and high time frame um high time frame short just to fill this move up here.
Speaker A
So, pretty strong short bias going in today because we have to revert this move here. I don't know if this is caused by a tweet like an actual thing that could change fair price because it's a back test, but does make it a
Speaker A
little harder. But whatever, we'll just follow the strategy exactly like it says. Okay, I'm going to use one contract for short instead of path. And there we go. Break a structure. So 750 500.
Speaker A
Play it out. Oh man, I lost. Um I could consider one more maybe. Okay, I'm probably going to take one more.
Speaker A
We are at what I think might be a fair price, which is this. So, it's not the best, but I'm just going to take a very quick continuation.
Speaker A
The opening candle was quite small, so I'm just going to stick with a smaller size, even if this candle was large, and just hope that we can get there pretty quickly. Okay.
Speaker A
Yeah. Well, that was not the best trade for sure. What was I doing? Okay, looking back, that was dumb. This candle was 26 points. The opening candle was very small. I don't know. Maybe you could have done 50, 75, and then one
Speaker A
pretty easily. But I don't know. I always get a little bit 50/50 when the opening candle's really small, but then the candles themselves are printing large. It just throws me off because I feel like the opening candle is
Speaker A
obviously the one with the most volume. So, it does throw me off sometimes, but I just try and stick with the same thing every time. So, probably just fine to get destroyed.
Speaker A
I guess because it went down but as expected for sure but just got stopped out every time.
Speaker A
All right, I can send in a buy here with 0.5 just because there's a lot of points in our favor.
Speaker A
Hey, okay, perfect. Just easy break structure. At least reversion is paying us when uh continuation somehow losing two continuations when it's only going down. I don't know. Whatever. reversion pays. Oh, that's not a breakup structure.
Speaker A
Oh my gosh, it's working. The versions are great, but the continuation trolled today. We'll see if we get one more attempt here before 11. Oh yeah, definitely going to get another shot.
Speaker A
This one seems pretty good just by half the contract. Okay, it was not pretty good. It was It was bad. Whatever.
Speaker A
That's not the worst. I just didn't like that this wick did not close above.
Speaker A
But it hits 11. No more structure being broken. on to the next day. All right, Tuesday the 19th. High time frame bias definitely longs because it's at the very bottom. Hopefully opening candle is green. Then we'll have a very good
Speaker A
continuation long. Hey, there we go. We're in breakup structure. A little bit of a wick, but the high time frame bias makes up for that. There's take profit.
Speaker A
Pretty easy mark out price. More movement up. I'm going to short when it breaks structure. There we go. I can sell.5 just because I have so many points in my favor that going for 38 is kind of like it's it's good too but just
Speaker A
too few. Hey, there we go. That was pretty easy continuation reversion just break of structure as always. A+ setup for sure.
Speaker A
Uh let's see if we get anything else. More movement up. If it breaks structure down, I'll short again.
Speaker A
No structure in there. Uh it did break structure. Uh okay. I kind of want to short again. back to here. How many points is that? Uh, exactly 75. So, let's do it.
Speaker A
Hey, there we go. Anything else before 11? Because it's really early. Three wins so early on.
Speaker A
Uh, okay. Wow. I'm actually going to buy. This is a crazy volume day. Let's see. Right there. First break of structure. Buy with five seems fine.
Speaker A
Okay. Stopped out. One more buy. It breaks above. Okay, that was maybe irresponsible. I'll do one more though if it can break and close above structure.
Speaker A
Oh, trying to look at the time as well. I don't want it to hit 11.
Speaker A
Oh man, I really want to buy. Hey, there we go. Last attempt for today. I do take a lot of trades just because I feel like I know it's going to revert. Okay, there we go. Back to fair price. I just feel
Speaker A
like I know it's going to revert. So, if I get stopped out, I'm ready to go on another account. That's how I'm getting through so many trades per day.
Speaker A
Obviously, some setups are better than others when you have really good price action and no wicks, but I'm pretty much taking everything. So, very good day that day. All right, now Wednesday the 20th, high time frame bias probably
Speaker A
short. Let's see what opening is, though. Okay, opening's green. Um, I wouldn't buy right now just because it hasn't broke above any any structure. So, it is 9:30, but it didn't break and close above any structure. So, I'm not going to buy yet. I'm going to
Speaker A
wait for a confirmation meeting just to break in the close above. Hey, there we go.
Speaker A
Um, okay. [clears throat] I'm probably going to do one contract because that candle was only 15 points.
Speaker A
So, um, not the half contract size. Okay, that's a bit off, but I don't care.
Speaker A
Wow. Oh Well, that got back to fair price pretty fast. And then I just missed a long entry.
Speaker A
Whoops. Um, okay. You should have bought here. The candle's 26 point 50. Okay. 50 point candle. Do a 50 point stop for sure. And then 75 take profit.
Speaker A
Uh, I don't know if there's any way I can enter this. Okay. Okay. Basically, what I like is that the opening candle was green and this one was green as well. Lots of wicks rejecting shorts and a broken
Speaker A
close above structure. So, I do like Yeah. Okay, there we go. Whoops. I should have taken that. And then I reversed fair price and I missed that as well. But there was no break structure there, so it's fine. Let's see if I do
Speaker A
get a Okay, tons of consolidation around fair price. Very obvious fair price there. Okay, what are what is this volume? 84 points. Okay, that I don't want to make assumptions, but I'm pretty sure this is a Trump tweet.
Speaker A
And I think new fair price be here. Let me just double check. Okay, yep, that's a Trump tweet.
Speaker A
Basically, I can tell because the volume increased out of nowhere at a random time and then it just started consolidating after. So, this is a new fair price. I would possibly You know what? I'm going to take an
Speaker A
interesting trade here. I'm just gonna buy. Uh the reason for this, I would prefer to have a much larger stop-loss.
Speaker A
Like I probably should have bought with Okay, let me let me try something interesting for you guys. I'm going to try this.
Speaker A
I'm going to keep the same risk over here and I'm going to show you guys a news news dripped trade. This is what happens when Trump tweets and I'm buying at like just the price after the tweet.
Speaker A
Consolidation after the tweet and we have alltime highs is a really good target. Okay, I guess it's never mind.
Speaker A
Ignore that. Um I'm just going to news drift this Trump tweet. See what happens because I'm actually kind of interested.
Speaker A
Might take a really long time and speed it up, but I just want to see if it drifts long over the course of the day.
Speaker A
So it did drift long and then of course one point away from my take profit. Uh, if it hits 2 pm, then I'll just keep holding.
Speaker A
Yeah, news drift trades are are are quite interesting. Okay, good drift. It's going to hit four and then I'll just exit because that's when the propers make you exit. Oh my god, edged again. Okay, well, I'm just going to
Speaker A
have to exit here because it's four and the prop is going to make you exit.
Speaker A
Well, I guess four was like one point away from taking take profit, but whatever. Yeah, so that's how you do a news drift trade. Uh, basically like incredibly large takeprofit stop loss.
Speaker A
just let it run and see what happens. More often than not, it's going to win.
Speaker A
So that's how you can use a bias. So that kind of messed up the risk management, but just ignore that. On to the next day. All right, Thursday. We are opening out the bottom. So high time frame is long. Let's see if we get an
Speaker A
entry. Okay, first candle red. Second candle red. Okay, that's a break and a close above.
Speaker A
I'm still not going to do it, though. I'm not going to do it. Uh because there's a very large wick up here.
Speaker A
So, I don't want to go against the wick plus the opening candle being red. I guess we'll see if I was right or wrong for doing that. Um, okay. It's just chopping.
Speaker A
Okay, I was wrong. Whoops. Whatever. Now, let's just see if I get entry back to this consolidation off of breaking structure or reversion.
Speaker A
Okay, break structure and we're getting 50 points. So, I'll just do one contract. It's going to be a pretty quick trade. See if we can get a nice quick reversion there. 750,500.
Speaker A
Okay. Wow. Interesting. Nothing you can do about that. Yes. Uh yeah, that's just weird. Very, very weird wick when it clearly wanted to go down. Whatever. Uh possible longs here.
Speaker A
If it breaks and closes above. Okay, it breaks and closes above, but it's already back. So, I'm probably done for today.
Speaker A
Yeah, more consolidation of the fair price. That's a bad day. Is it? Oh, it's a Thursday. That's weird. Bad days are usually Mondays.
Speaker A
Whatever. Uh, just lots of consolidation. No real moves. And then it did a real move. We had a a great setup, but then weird wick. Whatever. On to the next one. All right. We are now on Friday high time frame. probably a
Speaker A
little bit short just because it's toward the upper side of that range overnight. Okay, open candle's green. So, I'm just going to buy then and the size is 37.5.
Speaker A
So, we'll choose 0.5 contract buy and then let it play out. That was easy.
Speaker A
Now, fair price just this consolidation here prior to open all this stuff here probably like there somewhere.
Speaker A
Uh let's see. Do we get any short positions? because I really want to go short. That's not bad. Good displacement. Um, probably could not. Oh, there we go. How many points is this? Okay. Well, there's like no points. If I was to go for 38,
Speaker A
let's see how far I need it to go. I needed to hit the low of the opening candle. Let me think. Is this possible?
Speaker A
This is obviously a tweet uh because it's a random price movement at 8:12 a.m. The consolidation after the tweet is this area here.
Speaker A
So this is like the middle of that area. You know what? I'm just going to do it.
Speaker A
It's 30 points. I'll just go for 38. We'll see what it does. If you're on a live account, you would put your fair price here. You put your target here. But we're on proper, so that is why I am putting it a little bit
Speaker A
below because I'm trying to just follow minus 500 plus 750 each time instead of optimization for a live account. It's obviously different. What is that? Okay, so it's obviously different and that's why my account balance is not going to
Speaker A
be as high as it could be because I'm optimizing for prop firms, but I'm testing back testing it for you guys here in a live account format. Hey, there we go.
Speaker A
Okay. Uh, let's see if we get anything else before 11. [clears throat] Maybe one final short.
Speaker A
We'll see if it breaks structure down. Oh, huge wick. I would be careful. And it's 11. We're done. On to the next. All right. Monday the 25th. This is Memorial Day, so it's going to be a bank call day, but I still
Speaker A
trade it the same. Um, as long as there's volume. So, yep, there's volume. Six point opening candle. Okay, you bet.
Speaker A
We are doing one contract instead of half a contract. Same risk as usual. 75500. Even though it is a bank holiday, I still think it's going to work. Same.
Speaker A
There we go. And then market fair prices there. Let's see what we get. Constructure. Is it going to break?
Speaker A
Hey, there we go. That one 750 500. Let it play out a little bit farther down, please. There we go. All right, that was easy for bank holiday.
Speaker A
Two and two and 0. Uh oh What am I doing? I still long by clicking too fast. Uh, okay, never mind. It's only 15 points. It's 100% going to win, but Oh, yep. But not enough points in our favor
Speaker A
to even take that. And that looks like a tweet. On to the next day. Right now, we are on Tuesday.
Speaker A
It's opening in the middle of the overnight range again. So, it's probably opening pretty fairly. Let's just see what it does. Okay, short bias. Let's see. Should I just take short right now?
Speaker A
Honestly, I think I'm going to uh let me check. So, very large wick to the top.
Speaker A
100% rejecting long. So, there's zero way I'm longing, which probably means I'm going to short. Um I just don't like that I wasn't able to enter here. I guess it's good that I didn't enter here though because this wick would have
Speaker A
stopped me out probably. Uh yeah, I can probably go short. Just fill this this recent move up. So the high time frame is kind of in the middle, but we're always balanced to revert the most previous move. So I'll just go short and
Speaker A
then the size of the opening candle 18 point. So one is probably fine. I'll do 550 and see what happens.
Speaker A
Okay, nice continuation short. Uh fair prices. Fair price is most likely this consolidation here.
Speaker A
And what am I doing? Oh my god, I just missed a buy. What am I doing?
Speaker A
Oh What? Whatever. Uh, how can I fix this? How can I fix this? Um, I'm just going to put this to 750.
Speaker A
What am I doing? I was just going to put infinite stop loss because I want this money. I know it's no win.
Speaker A
Okay. Well, yeah, I was supposed to enter there. So, we'll count that, right? Break a structure reversion.
Speaker A
Easy. Allow it. This is no breaker structure, by the way, since this is not a structure.
Speaker A
I like that the way came back here instead of the open, right? So, I'm agreeing that fair price is probably here, but let's see what it does for the rest of the day. No structure broken.
Speaker A
Still no structure being broken. I'm going to miss it if I go on that speed. Okay. Are we at all time highs?
Speaker A
Yes. Okay. So, it's it's at all time highs, which means it moves far unfairly. So, I am getting ready to short.
Speaker A
I feel like I've been shorting in all of these videos, on all these days.
Speaker A
Uh, give it a bit more. Let's see if it breaks structure before 11. I really hope it does.
Speaker A
Oh, there we go. Uh, I'm going to do 0.5 just because there's so many points in my favor. Like, I can even put this down here. This is what I do on a live account, by the way. I would probably do
Speaker A
something like this on a live account and then just print infinite profit. But it's unfunded, so I'll just do minus 500. And then on Eval, there's the consistency rule. So, uh, I'm just going to go for 1500 because you don't want to
Speaker A
win more than half of your thing in one day because consistency rule. Let's see what it does. Whenever it's at all time highs, you can take really long reversions, which is amazing. It prints profit. There you go. Print.
Speaker A
And it's past 11. Did I enter before 11? Yes, I did. Rules all followed. On to the next. All right. Here we are on Wednesday. High time frame could be short. I remember this was fake news.
Speaker A
Fake news is very weird when you're doing fair pricing theory. Um, basically just pretend it didn't happen. So, uh, you want to pretend that this stuff never happened. Just pretend that the chart kept going like this. Uh, because
Speaker A
that is fake news and that's not real price action. Uh, so we'll just leave it like that for today. Let's see what this does anyways. Okay, red, very large candle, 50 points. So, definitely half the contract there. I'll let that play
Speaker A
out. See what it does. Okay, there's a win. Very easy mark out fair price.
Speaker A
Probably this consolidation right there. Now let's see if we can go long anywhere off break of structure. All right, structure broken.
Speaker A
Uh 100 points favor by. Okay, lose unfortunately. Structure broken again. One more. Oh, okay. Scam.
Speaker A
Why is it not reverting? Okay. Uh, I missed an entry. What am I doing? I'm clicking too fast.
Speaker A
Uh, the entry should have been this. I guess we can just watch it together.
Speaker A
Oh Okay. Well, it hit 11 and it lost. [clears throat] So, we'll have to take away one win. We'll have to take off 500.
Speaker A
Whatever. Seems like a pretty good entry, though. If I entered here, I would have won. Wait, hold on. Let me just double check.
Speaker A
Did this break structure? Yes, this broke this structure. So, I should have bought here and then it would have Would it have to hit 75? Hold on.
Speaker A
This is important to know. Yes, it would have. Okay, so it would have won. Not Yeah, pretty close, but would have won.
Speaker A
There's the entry to the tick. Barely a win. So, I guess we have to add 750 to the profit at the end. All right, we are back to Thursday the 28th. Uh, slight problem. While I was fast forwarding, I
Speaker A
accidentally skipped news. There was news at 8:30. It showed me the little red thing, but it went away now that I skipped it. Uh, but yeah, you should have taken a news continuation and had the easiest win ever, but I skipped it
Speaker A
by accident. Whatever. Let's see what the open does. Okay, [clears throat] this is interesting. Let me check high time frame.
Speaker A
Uh, is that all time high? Oh, that's from yesterday. I can delete this though. So, it's it's honestly in the middle of all of that. I don't like opening longs because I'm my goal now is to revert it to pre-news. So, I only
Speaker A
want to take continuations to pre-news. I think the opening candle might have been affected by the fact that news was green and caused a fake long candle and also it failed to close above that. Let me just double check.
Speaker A
Okay, there we go. I'm just going to sell.5 [clears throat] to get back to the previous price.
Speaker A
Um, I guess it's fine that I'm not Yeah, it's fine that I'm overshooting because it's not on live. Remember, if I was on live, my profit target would be exactly the previous price, but it's on a prop. So, okay, there we
Speaker A
go. We hit pre-news. Now, I could consider long for a few reasons. The first reason is the bias is definitely long because the opening was green and news was green. My time frame is sort of 50/50. So, ignore that. But news was
Speaker A
green and opening was green. So, I really do want to buy. I honestly think I'm just going to do it here because it just broke structure and the stop loss is like good to be below. So, it's sort
Speaker A
of like a bias trade. That was close. Hey, there we go. Okay. No luck involved. Perfect. Just like a standard bias trade.
Speaker A
uh because this was green and this was green and if I think this is a fair price then from here over time fair price changes right and I feel like it's going to change in the positive direction because news was green and
Speaker A
open was green so that is why I did that um newest fair price I'm just going to say it's here consolidation here this okay this looks like a tweet though oh did I miss a reversion probably this is definitely a tweet actually just
Speaker A
because it's a 106 point candle at 10 10:12 a.m. which never happens. So clearly a tweet. Oh, news rift. Remember news rift trade. Uh let's see how many should I do. I can do 0.2 again.
Speaker A
Yeah, that's probably fine. And remember to follow the 75500 rule as always. This one might take a really long time as well. But just the news strip, same as last one. Trump tweeted, just ride the green. Also open the
Speaker A
screen. News hero is green and Trump was green. So, and there's all time highs.
Speaker A
So, this is 100% going to win. Did I jinx it? Okay, one point away. Why are all my news drip trades one point away? Oh my.
Speaker A
Okay, hold on. Maybe I should stop it. Oh, one point away again. Wait, am I past?
Speaker A
Shoot, I went past market close. Whoops. Okay, well, you get the idea. Did it add money? Okay, whatever. Hopefully that's money. Yeah.
Speaker A
So I get I mean you get you get the idea. Opening was green, news was green, Trump tweet was green. So I just want to buy and then drift. And then you need a big stop if you want to drift so that
Speaker A
you're not uh losing your expectation if you get stopped out. One more day for May, I think. 2930. Yeah. All right. We are now on the 29th. Um and then obviously the weekend will end May, but we are at alltime highs. So probably
Speaker A
just going to have a long bias. But anyways, let's see what the opening candle does on the one minute. It is Okay, it is 50/50, but it is green, which is good. Now, if it closes above, I'll just buy. Yeah. Okay, I assume so.
Speaker A
Um, and then the size of the candle is 29. So, I'll just do 0.5, I guess. And then just let it drift.
Speaker A
A little bit of a difference between like the drift and the scalp trades. Um, there we go. Pretty easy. Now, I'm uh I'm going to short back to the pre-open price, but I'm going to wait for break structure because we're all
Speaker A
time high. So, no displacement. [clears throat] And the entry is going to be right there. Break structure. Boom. 0.5.
Speaker A
Just because you have enough points in your favor. Uh, if I was on a live account or a funded account, which doesn't have consistency rule, you could target more. Same thing on Eval. Like, technically, I could just go for I don't
Speaker A
know why I'm not going for a thousand. What have I been doing? Okay. Uh, I'm not sure why why I was not doing that earlier.
Speaker A
Um, you can go for 500, you can go for 750, you can go for 1,000, you can go for 1,500, but don't go for more than 1500 on eBunded.
Speaker A
It's okay to go for more because they don't have consistency, but make sure you know the rules. Okay. Uh, pretty easy reversion there. Um, so I love these I love these reversions. Like just there are so many points in my favor
Speaker A
like this 100 points exactly and you can have such small stops like 25 points and you just have to win a little bit more than like 20% to be profitable. So, I mean, it's like so it's so profitable.
Speaker A
You just have to make sure you don't get caught up in the days where it goes like this because then if you short here, here, here, here, and you kind of cook. But it doesn't do that too often. Don't worry.
Speaker A
All right. I think that was all of May because next is the weekend. Um, let me see if we can pull up the stats. All right. So, let's take a look at the performance of the strategy over May.
Speaker A
This is just a standard equity curve. Um, but the the strategy is optimized for reduced draw down so you don't blow your profit account challenge as much.
Speaker A
Um, so to lose a 50k account, you have to lose $2,000, which is 4%. And as you can see, we never hit 4%. So you would have not lost an account um for that month. I think I can just do dollars.
Speaker A
Okay. Well, I guess if you have draw on streaks, so I'm not sure why it's calculating like this. Uh, so you would have lost it like backtoback days here.
Speaker A
I don't know why it's calculating like this. Whatever. Um, but yeah, no, no instant $2,000 draw down streak. Math draw down 120, whatever. So, you're never going to blow an account in one day, which is always great.
Speaker A
And in terms of the performance, 67% win rate. Uh, definitely not enough trades to consider it like a solid uh win rate, but obviously the strategy works. Just pretty good profit and loss on the month. Expectancy profit factors.
Speaker A
Great. Uh, I'm going to plug into my website at the end and I'll show you exactly what Prop Firm is optimal for me. I guess I kind of use them all because I'm trying to scale. Uh, performance calendar. Interesting. One,
Speaker A
two, three, four, five, six red days. Not bad considering tons of trades every day. That's obviously why it's going to average out to be green because the strategy wins. Okay. 2.67 trades per day. Uh, I'm definitely more aggressive
Speaker A
on my own accounts because I'm taking a bunch of displacements. So that lowers my win rates, but it increases the amount of trades I can take and then I make more money because I'm taking profitable trades on props. But my win
Speaker A
rate's personally lower because I take slightly worse trades. Um, but yeah, this is a good amount of trades for New York session [clears throat] for a beginner who only has one or two accounts and you just want to take it slow and only take the
Speaker A
best setups, which is what I was showing you in this video. Important to have low max draw down, especially on prop firms.
Speaker A
That is why I created the strategy specifically for prop firms in terms of the risk management uh that I just showed you which is why we never hit minus 2k uh in one day and pretty good positive expectancy. Uh it's looking
Speaker A
quite linear. So everything as expected. All right. So I took 56 trades and I won 37 of them.
Speaker A
Average win was just I'll just do 750 and then average loss 500 because that's what I pretty much what I follow for all of them and it wants me to use this one.
Speaker A
U so I'm getting pretty good EB on the 100k top step no fee with consistency rule based on these stats. Um obviously I'm profitable in all the prop firms but you should put in your own stats. So I
Speaker A
would never buy the MFX 25K to only make 1,300 when I could buy this and make like five times as much. So hopefully this can help you guys as well. I'll put it in the description. All right. So I
Speaker A
hope you guys enjoyed the back test. That should have given you a little bit of more information about my risk management protocol on prop firms seeing as how we are barely ever hitting max draw on up $2,000 except for consecutive
Speaker A
days and as well you are seeing very good equity curves. So just try and replicate exactly what I did to the best of your ability. Obviously this should be optimized different risk on different prop firms definitely different risk on
Speaker A
a live account. Tons of optimizations you can do, but this should get you incredibly profitable results if you're just able to replicate pretty much what I
Topics:JJ Simontrading strategybacktestingcontinuation tradesreversion tradesfair pricemarket structurerisk managementprop firmtrading psychology
