Back Testing and Candlestick Chart Concepts in Trading

18 Questions

What kind of day provides opportunities for holding positions throughout the day?

Trend day

What does one expect in a bullish market?

Higher prices and blowing through broad information tops

What does the speaker emphasize for improving trading skills?

Learning from past experiences

What did a 2-candle reversal near the end of the quarter result in?

A reversal back into the time frame continuity

What can be used to simplify back testing according to the text?

Focusing on successful reversals

What does the speaker advise regarding internet connectivity in back testing?

It can interfere with back testing using tools like Bar replay

What is suggested to improve the appearance of broad information in the market?

Shifting the broad information top to a more reasonable level

When does a new hour start for futures markets according to the text?

1:00 PM

What is the significance of time and price analysis in back testing?

It is important in identifying successful reversals and entry opportunities.

How can back testing be simplified based on the text?

By looking for entry opportunities on similar days as successful reversals.

What does the speaker emphasize about broadening formations in the market?

They can be used to identify resistance levels.

How can internet connectivity issues interfere with back testing?

By sometimes interfering with the use of tools like Bar replay.

What method of back testing involves looking for reversals in a time frame continuity, such as a two reversal sequence in ES?

Time frame continuity method

What is the characteristic of a bullish market according to the text?

Expecting higher prices and blowing through broad information bottoms

What does the speaker advise for gaining confidence in trading strategies?

Backtesting strategies to confirm their effectiveness and gain confidence

What is a trend day according to the text?

A day where prices move significantly in one direction

What is the speaker's emphasis on improving trading skills?

Building cognitive recognition of patterns

What did a 2-candle reversal near the end of the quarter result in according to the text?

A reversal back into the time frame continuity

Study Notes

The text discusses the topic of back testing, specifically regular back testing.
Back testing can be done using tools like FX replay for live conditions or manually obtaining data.
One method of back testing involves looking for reversals in a time frame continuity, such as a two reversal sequence in ES.
Reversals can also be successful based on factors like the month and week open.
Back testing can be simplified by focusing on successful reversals and looking for entry opportunities on similar days.
Time and price analysis, such as the new hour and multiple time frame analysis, are important in back testing.
Back testing requires studying and understanding what to look for on charts, which can be facilitated by taking notes and studying videos.
Internet connectivity issues can sometimes interfere with back testing using tools like Bar replay.- The speaker discusses the concept of candlestick charts in stocks and futures markets.
A new hour doesn't start for stocks until 12:30 PM, while futures do not have a new hour until 1:00 PM.
Two candlesticks together can form a 30-minute chart, resulting in a 2-candle reversal on the 30-minute chart.
The speaker suggests taking out swing highs and looking for resistance levels when creating broad information.
Shifting the broad information top to a more reasonable level can improve its appearance.
Broadening formations, such as broadening tops and bottoms, are significant in the market.
In a bullish market, one expects higher prices and blows through broad information tops while respecting broad information bottoms.
Conversely, in a bearish market, one expects lower prices and blows through broad information bottoms while respecting broad information tops.
The speaker suggests backtesting strategies to confirm their effectiveness and gain confidence.
A trend day is a day where prices move significantly in one direction, providing opportunities for holding positions throughout the day.
The speaker discusses the importance of understanding and practicing backtesting strategies.
The speaker encourages learning from past experiences and applying that knowledge to current situations.
A 2-candle reversal in June, near the end of the quarter, resulted in a reversal back into the time frame continuity.
The speaker emphasizes the importance of staying within striking distance and looking for realistic opportunities.
The speaker encourages taking screenshots and building cognitive recognition of patterns to improve trading skills.

Explore the concept of back testing in trading, including regular back testing and the use of tools like FX replay. Learn about candlestick chart concepts, including the formation of 30-minute charts and broadening formations. Understand the significance of trend days and the importance of practicing backtesting strategies for improved trading skills.

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