Speaker A
Over the past six years, I've tried almost every single strategy. And while doing so, I lost a lot of money thinking that I could just watch a video online, apply the strategy, and start to make money. But one thing I found that
Live backtesting of top 5 trading strategies reveals the best one using price action and higher timeframe analysis.
Key Takeaways
- Backtesting and simulation are crucial to validate trading strategies before risking real money.
- Higher timeframe analysis sets the market bias and guides trade decisions on lower timeframes.
- Price action combined with liquidity concepts helps identify optimal entry points.
- Risk management and discipline in following the strategy are essential for long-term success.
- Fundamental catalysts complement technical setups to increase trade probability.
Summary
- The presenter shares experience from six years of testing various trading strategies and losing money by blindly applying them.
- Emphasizes the importance of simulating and backtesting strategies to verify their logic before live trading.
- Demonstrates a simple price action strategy by backtesting it live, explaining entry points and thought processes.
- Starts analysis from higher timeframes (daily, 4-hour, 1-hour) to identify market bias and key support/resistance levels.
- Uses horizontal lines to mark support and resistance based on candle closes for objectivity.
- Focuses on bullish bias in gold trading during London and New York sessions, looking for pullbacks or consolidation to enter buys.
- Highlights the role of liquidity, absorption of sellers, and market phases (expansion vs consolidation) in trade decisions.
- Stresses the importance of fundamentals as catalysts for price movement in addition to technical analysis.
- Demonstrates risk management and trade execution using stop orders and position sizing.
- Encourages trusting higher timeframe analysis and following the strategy rules even if trades are lost.
Chapters
- 00:00Introduction and Importance of Backtesting
- 00:58Starting the Strategy: Markup and Session Selection
- 02:05Higher Timeframe Analysis and Support/Resistance Marking
- 03:04Market Structure and Absorption Explanation
- 04:10Bullish Bias and Fundamental Considerations
- 05:08Focus on Buy Setups and Timeframe Breakdown
- 06:17Liquidity, Pullbacks, and Consolidation Concepts
- 07:34Trade Execution and Risk Management
- 11:19Trusting the Strategy and Managing Trades
- 14:40Trade Outcome and Final Thoughts
Full Transcript — Download SRT & Markdown
Speaker A
extremely helped save time and proved to me that this [music] actually works is simulating that strategy, back testing it, following the rules, and seeing, does this system have some logic to it?
Speaker A
Not only that, but this is an amazing tool to show you guys how my strategy exactly works. So, I'm going to show you my simple price action strategy [music] by back testing it live in front of you, taking you through every single step of
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why I entered, what my thought process is, and just showing you how it works.
Speaker A
We're going to go through basically me simulating because simulating is you practicing just like a professional athlete would spend most of their time practicing. That's a proven formula that we can apply in trading to make sure that we're prepared when we tackle the
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live market. So, with that being said, let's get straight into this video. Let's just see what scenarios we have here. I'm just deciding. So, we're going to do gold here. Yeah. So I want to back test January here. So we'll back test
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London into New York. So both will get here. So first step I like to do in my strategy here is I like to do something called a markup, right? And the reason why is I want to know certain
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levels where we are, what levels I can assume we can push through, find my bias and all of that type of stuff. So I normally start from the daily time frame here and I have a look at what's going
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on on the daily time frame. So very basic today. Today actually looks great to be honest. Automatically I can see today will be a good day and I'll show you why. All right. So I start on the daily time frame. Reason I start on
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daily time frame is I want to see what's happening on higher time frame. All of my ideas even though I trade I trade up into the 1 minute as well in very high volume in New York Stock Exchange
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open. I will pull up the one minute. It's how I trade at that time because I'm looking to catch from session low moves. I'm looking to catch if we are expanding in an expansion phase meaning that we are leaving zones with heavy
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volume and the pairs I trade indices NASDAQ US30 you will not have time to sit there sometimes on the open and wait for stuff so you need to be proficient with that but by all means does that have no relevance without the
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higher time frame right everything I do comes from the higher time frame so I always start from the higher time frame and I mark something called support and resistance now I'm not going to get into exactly how to mark support and
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resistance. I like to use horizontal lines because they're non-subjective trend line. I can argue if Hunter tells me to draw trend line with the wicks, Hunter tells me to draw trend lines from the bodies here. I can tell him no. I
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want to draw it from the wicks. Can he tell me no? But can you argue this support and this resistance? We can't.
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We can't argue it because it is where the candle's body closed and it is a support and a resistance. So, it's very hard to argue this. Okay. What I'm looking at here is I'm looking how this previous daily candle closed here. If
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this previous daily candle closed bullish here, this is giving me a good idea that price should head up here, right? Especially in this phase here when we have these big areas here. If we look at what gold has been doing here,
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okay? And this is what you need to look at here. This is absorption here, right? This is showing us that sellers have been absorbed, right? Because we can see how price has driven down here.
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Already tried once in the past, had big expansion afterwards after sellers were absorbed here. And one more time we try to head down again and we fail again. We get absorbed. Sellers get absorbed. And now we start doing what?
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Creating higher low structure to push up. This is telling me that hey, we're having a lot of bullish pressure here.
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Now I look to the left-hand side of my chart always. And I check where can this bullish pressure end. We had a very nice target here the first time which became the end of many of us of our bullish
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pressure. But now we've created a new target that I've already marked. So for today and for the rest, this could be a target that I can see because that's where our pressure has ended, right?
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That's our next resistance. So using this higher time frame analysis now, I can start to build the idea that hey, with this bullish pressure, I can head here. If we start to leave this zone, I don't have problems to here because I'm
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looking left and there's no resistance. There's nothing that's showing me that buyers are being absorbed except from what we've been here in this current scenario. Okay. So, what's nice is we've pulled back being up here at the highs
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after we've had 1 2 3 four daily bullish candle, green candle. It's a little bit tricky. Why? Because now we're pushing full bullish pressure here. We need something fundamentals. That's a big thing I use in my trading fund. What
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fundamental catalyst will we have to push 6 7 8 right? Higher time frame trade, you could rip it right here to be honest. So, moving moving, you know, down to the next time frame, I like to have a look at the 4 hour. So, daily, if
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you've heard me yapping, definitely bullish. Okay. I like to check the 4 hour. What do we have on the 4 hour?
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Same story, huh? Full bullish. Now, limited structure. We can see how candles, but what are these candles doing? I like to read candles. They're going down to grab liquidity every single time. So, today I'm just full bullish. Today, I'm looking only for
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buys. No chance I'm taking a sell today, right? I'm not taking a sell. No chance.
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I'm seeing a lot of pressure here for upside for me. So, when I see all this upside pressure here, this is just telling me, you know what? This is something that I want to be part of. For what? For upside movement. So, this
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means I'm going to be looking for buys. Only buys today. Okay. Sell setup comes, I don't care. All right. Next time frame, I'm going to go down as I'm trying to mark up my support and resistance. So, I'm going to
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put a little again, I'm not going to explain why I mark it like this.
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Otherwise, we're going to be here for I'll have to explain my whole strategy. It's going to take hours. I released a basic free course on my YouTube. You guys can go watch that if you want to learn about how it works and then if
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you want things more in depth, we have options for that as well. But moving down here to 1 hour time frame again everything bullish man everything bullish right I can see that everything is bullish here and it is just it is
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looking great right full upside I'm waiting for full upside now I normally label these but I'm just going to go a bit fast because we can really get carried away and start to really make this extremely long here right
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which is not something we really want to do. So one issue we have here right now is we're pushing pretty heavy. I do not want to be a buyer with these heavy pushes. Why? Because I want to be part
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when liquidity has been generated. Now liquidity is generated in two circumstances. Pullbacks, absorption of sellers showing me buying pressure or consolidation. Right? Consolidation. Do you know the market spends 20 30% in expansion and 70% in consolidation?
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Okay, consolidation generates us the moves, right? So, we want to see some form of pullback here to give me a buy to continue my higher time frame bias, buys, buys, buys or I'm looking for some sort of consolidation and expansion.
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Right? So, this is the two things I'm going to be looking for. So, let's just skip until we get that. Look at this.
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Right? Full pushing here. I'm not forcing into any type of buys here. I'm not seeing something that is relevant for me. I need to see co
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some form of pullback. Now we start some form of pullback. So this is important for me to start to see some form of pullback here. So what I want to see now is now we created a new level here.
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Right? This is our new level. Either we pull back to this level or before it. I don't mind. And I'll take buys back up or we clear this level. So now we skip.
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We see here we close at this level. Not going to be anything for me. Now we're trying to clear this level at this time here. We're trying to clear this level.
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But this candle is showing me weakness. This previous candle did not close above here. I'm seeing buyers be absorbed at the high before the candle close. I want to see a strong candle close below. So, if I were to assume
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we could struggle to head up next candle. If full volume is going to come, we're about 15 minutes from London open, then we will push here. But still not something I'm interested just yet. I'm going to wait here. Right. There we go.
Speaker A
Boom. Right. So, this is a typical retail problem. They buy because they think price is going up next to London open. Yeah. Classic. Put stop loss below the low. Bam. Stop loss hit. Oh, that sucks. And they don't understand why,
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right? because we read a little bit of candles. But now, one thing it tells me, anything closing back above here, it's ready to go. Because why would price want to continue up now and close above that zone if it didn't want to go up,
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right? You just be screwed that day. Remember, we we're here to be wrong as well, huh? It's not 100% guaranteed anything here. So, if we see u something above that, I'll be interested. Okay.
Speaker A
Now, this is interesting. So we we get something closing above here. We have this nice wick. Very important wick did not tap our next level. Wick did not tap our next level. This candle closing very strong here. Okay. So with this scenario
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here, this is where I can see that we liquidity grabbed the lows consolidation phase. We broke above this level. We failed to break any lower here. In my opinion, this is where I feel like we should be able to see further upside.
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And this would be able to trigger me. What trigger me a buy setup here. Okay.
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So, if I see anything now next candle, I'm happy to take a buy, right? So, let's check how much our stop loss, we'll want to run stop loss below this range, 36 pips. And we try to aim here
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for maybe we look for since it's a not the biggest range we have today. We will try to aim here for 36 pips to begin with. So, only 1:1 we get in this scenario. Why today only 1:1? We've
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already pushed. So we have to take remember we're coming to London session to trade. Since we're trading in London session and we've already pushed we have to be realistic. If we want to extend targets higher we need deeper pullbacks.
Speaker A
Okay. So let me let me go here and you know with 30 pips we can let's say we just put a five lot here risk. Okay. So what I'm going to use is a stop order, right? A stop order basically means that
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it will trigger once price breaks that level. going to keep stop-loss here and I'm going to place this order. Okay, so that's the that's the first thing I want to do is to place this order. Why? So that I can have something which is going
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to be giving me let's see bottom wick first. Yeah, there we go. So we want bottom wick first. Forgot to mention. So when I place an order, I always want bottom wicks, right? I always want bottom wicks. Why? Because bottom wick
Speaker A
allows me to do what? Bottom wick allows me, right? allows me to see that price has gone down first before breaking up. And honestly, I could move this a little bit lower here. Uh something like this here. So, we can
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enter get a little bit tighter entry. And that should be perfect. So, let's go ahead and and play this.
Speaker A
And now, look how I'm playing it, guys. Very important. Huh? I'm playing it not skipping candles. Now, this is where simulation comes into play because now I'm watching the candles as if it was real life. You can see how this is
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moving now like the ticks and now I can learn the behavior of candles. So now we actually simulate. We're not skipping.
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We're watching how the market would have moved in real life. Okay, what I'm going to do is speed this up so we not wasting time here. But this is very important because this is how you're going to learn emotion, guys. And I'm watching
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here. Look, it's great. It's pumping. I'm in profit now. Obviously, it will be slower if you're simulating it a little bit more. Real speed. Now, I'm back in draw down. In real life, guys, when you're seeing your P&L move up and down
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like this and getting used to higher balance, if you're trying to pass a 100K prop account, you name it. Um, you need to get used to this thinking about what are you doing? Where's my management? If I see any change of structure here, I'm
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going to close the trade early, right? I'm going to save myself 1,700 bucks. Okay? I'm risking 1.7% here. Huh? So, now we go into some deep draw down here. Am I worried yet? No, not yet. Why? Because again, here we can
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see some of our buyers being absorbed. But at the same time, there's nothing showing me yet that sellers are in fully control, not breaking structure, I'm not getting lower highs. I don't like the wick rejection here, but I have my best
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friend. Who is my best friend? Higher time frame. So, I have to trust. I have to trust in what I said. And if we lose this trade, we lose this trade. Doesn't matter. I will still follow my idea.
Speaker A
Move on to next session. and we go again because I still trust my plan. That's that's the the part of, you know, of of real trading here. So, let's just see how what happens. Do we get absorbed?
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This is nice, right? We see it it wick down there immediately bought back up.
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Not too much of an issue. Now, look at that. You see that last minute again got bought back up. You can't learn this guys by skipping candles. Most simulators out there do not offer you to play candles like this. They make you
Speaker A
skip. Skip will not learn. It's great for testing, but to learn to h actually trade like a it's like a pilot flying a simulator, but he has to skip every 10 minutes of flying, you know, it makes no
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sense because that idea what I told you the sells got absorbed has now pushed us back into profit here. So, what are we floating? So, now we're getting up into some nice profit here. Finally moving in the direction we wanted it to. Now, we
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we can start to get some volume into this market and we're part of this expansion here. Now a rejection coming not the best that we like to see but again being absorbed immediately right so I'm not too worried about it being
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absorbed immediately once we break this high what I'm going to do is I'm going to do something which is called I want to move my stop to break even actually yeah this is good push already so at this point here it's a very hard for me
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to lose this position right I'm I'm in great profit here we're starting to break the highs here um and for me to give this profit back would make absolutely absolutely no sense in my opinion. Okay, so honestly in this type
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of scenarios where I would move my stop loss to my entry here and I I'll lose nothing here. Let's say 45 bucks in this scenario here. We'll slow this down a bit as it's getting a bit excited and we
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see if we can push and get our one one here. So 1.5k we're risking 1.7, right? See if we can push boom then almost almost one to one here. It's a little bit Let's see. Let's see if we can get back.
Speaker A
Let's put our TP there. So, I want my TP at 1.7. Sometimes it can be a bit fast. So, let's see if we can rebreak this high.
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There we go. Boom. All right. Perfect. So, 1.8K on this position here. And uh I was targeting a 1:1. Why? Because of the reasons I told you guys. Okay. So, this is London session cooked. We finished London session. We took the exact uh
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procedure I told you about consolidation [snorts] to generate liquidity expansion. We were part of the expansion move for this. Now I can move on to what next session right next session would be NY. We're only going to do one more
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session then we can get into some questions about strategy all of this type of stuff. Now leading into NY here this is about 2 hours before NY. Big problem we have is we expanded in London. So what I want to see in NY is
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heavy consolidation or heavy pullbacks. That's it. Okay. If I do not see a heavy pullback or heavy consolidation, I'm not going to be part of the move. So, all I'm going to do now, guys, is actually skip until I see one or the other. So,
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we're not wasting time. But in real trading, guys, you would have to sit and painfully wait for one of those things, right? So, we're starting to consolidate, which is what I like.
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Trying to break down again. No sells for me. O news came here and look at this move here. So, this is very tough. Huh?
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Very, very, very tough. when we get this is very tough when we get something like this because market has two options right now right it can either do what it can either try to hold this levels and continue to push
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bullish or we retrace news move which is something that commonly happens which will set up for me for better buys because my whole idea from the beginning of the day was to take buys we actually already hit my my daily target so we are
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we ready to to keep on moving here if we want to. So honestly in this scenario on a day like today I'm not buying the highs here into this mess. I don't want to I've already to taken this part of
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London. It's a good move for today. So unless I see a pullback here I'm not going to be very interested here. So just going to skip and see if I get that pullback. If not, we can skip to the
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next day. Have some questions in between. Uh so yeah, rejection from this resistance. Fair enough. Not enough of a pullback yet for me. Now, you could buy this candle right here, but after a big move like this, this first pullback is
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normally not the best idea. Now, this pullback I like. Anyone knows what this was? Let's see in chat. Can you type in chat what this was? We're back to where we took the first buys, right? Plus, we have grabbed again liquidity. Second
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time. Second time, we've done what? We grab liquidity. Now, most people will do what? They see a support candle here, they'll take a buy. That's not my style.
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It's not my style. I need something juicy. There's one thing that's called setup number five. This is my best scenario for setups number five. If I can get change of structure here, I'm happy to be able to take buy. So, let's
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go ahead see what happens. A support candle here. I mean, you could take it break of high here, but not the best candle for me just yet. So, this would follow my rules. The only thing I don't like about this at the moment here is
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the size of my stop loss. 50 pips is not bad. Yeah, 100 pip range. Huh. And this one we could try let it run to our full daily target up here because New York is the session you want to let trades run
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because we pull back heavy. See, we don't want to give back all of our profits today, huh? So, let's risk only 1% on this position. We made 1.8% today.
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We made 1.8% today and we don't want to risk we don't want to risk all our profits. So, if we lose this trade right now, we'd be up. We'll be up 800 bucks.
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So, it's still going to be positive. Very important part of risk management. Set a buy stop there. And uh let's go back to playing the candles. Let's let's give this a shot just to show you.
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Honestly, this move will be more powerful than London if it does work out because we've pulled back. London, we didn't have a pullback. Uh London, we had a consolidation. So, this should be better. Uh especially with us daily time
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frame extremely bullish. So, let's see here. Okay, so now it triggers us. We're going to speed it up here. See how this goes. If this candle closes bearish, I'll close half. Not the case yet.
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Again, you see how conservative I've become. I said if this candle closes bearish, I'll close half because I'm trying to protect money I've made. We're we're about 1% in profit now. So, we're at a 1:1. But since we've made money
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today, let's just let's just hold. Let's just hold until at least we see price struggling, right? Buyers are not being absorbed here, huh? We're not seeing absorption of the buyers. This is telling me that we have a lot of buyers
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in play. Look at Oh, it's going to hit my TP. We need to remove this TP, right?
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We can risk 1K here. Could technically take it to daily target. A lot to ask for price. pretty mad but uh let me just double check daily a lot to ask but uh this is the where price wants to go
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we'll trail we'll trail I'll teach you guys how to trade 4-hour target met yeah so now we're reaching 4hour target here if we start to struggle at this zone but we have this wick to fill keep in mind
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if we start to struggle at this zone I will be taking some profits not to be greedy you know so we'll take something and then we can leave the rest to run here uh if we get the chance but we're
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not struggling yet this is where I'm going to utilize a little bit lower time frame here to try to find that Yeah, first bearish 5m minute candle here.
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1.5% in profit here. We'll take out 500. Huh. So to take out 500, we can close around how much loss did we put? 1.88.
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Can take around 25%. So we closed 25% here. We took around something. Now adding to our daily P&L. So now we can just speed this up and let's see what happens with our trade. Right? So this is how we could back test and see where
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our trade ends up going. So to save time, I do trust this position. What I will do is move my stop loss to entry here as I don't want to lose this trade at at this current time. Uh and let's
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just skip and see how this would have gone. Right? So let's just play here a bit slower. Skip by 15 minutes. Let's see. So this is nice creating structure above our entry here. We start to push up bullish. We follow our daily bias and
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yeah this as long as we can hold the structure here. Yeah. Look nice. We should continue up. Yeah. Then this is just this is a banger, man. I mean yeah this is going to go to 6,000 TP here,
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you know. Let's see if we can hit it. Yeah. Then when you have such a clear daily like that, it's uh it's very very easy, right? You can get big trades like this huh?
Topics:trading strategiesbacktestingprice actionsupport and resistanceliquidityrisk managementhigher timeframe analysisgold tradingforex tradinglive trading simulation
