Backtesting Notes/Findings
// Price Action //
- Wicks are okay as long as candle closes blow most recent high/most recent low
>> Impulse candles should close below previous candle's wick, otherwise that's considered a break of recent low or high and retrace (lowers probability of momentum continuing in the direction of the impulse.)
- Careful of wicks and wicky price action in general in and around the setup, it's a possible signal of a corrective range forming.
- If price impulses too far away the bullet setup, or MRL/MRH, careful setting a limit order to enter.
>> Especially so if there is a high impact announcement which can cause a large impulse and counter-trend impulse retracement.
- Check fib retracement from most recent high and most recent low during setup and see if it's near 61.8% for further confluence of setup.
- Highest probability setups come from ascending/descending corrective channels (unclean volatile trends), which have a counter trend break; then setup with the bullet or bullet/bomb combo.
- With trend continuations from a corrective channel can work but it's lower probability.
// Psychology //
- Went into this month with the mentality that I'm going to have a profitable month of backtesting, but not focusing on outcome.
- Focus is that I'm going to take good quality setups, take my time reading price action, and focus on executing my processes perfectly, and NOT focus on my P/L / %.
- Focus is on taking nice setups that align with my plan and let probabilities play out.
- Did not focus on losers, or let myself take losses personally, or feel down because of it. Also did not overhype my wins either.
- More focus is put onto what my winners had in common. Acknowledged losses, but not going to focus on them as it's possible they were high probability setups that just didn't play out probabilistically.