This chart represents a backtesting setup for a trading strategy on TradingView for the US100 (Nasdaq 100) index on a 1-hour timeframe.
Key Observations:
Price Structure:
The chart displays a zigzag wave pattern, which resembles market structure movements in an uptrend.
There are clear higher highs (HH) and higher lows (HL), indicating a bullish trend.
Entry & Stop-Loss Strategy:
Entry Level: Marked in blue around 19,109.3.
Stop-Loss: Positioned underneath the previous low at approximately 19,030.4, marked in red.
This strategy suggests buying on a retracement after a pullback, which aligns with a classic trend-following approach.
Target Profit Zone:
The green line at the top represents a potential profit-taking area, aligning with a previous swing high.
Volume Indicator:
Volume is 6.33K, which suggests moderate trading activity.
The red bar on the left indicates a possible sell-off before price recovery.
Trading Strategy Insights:
Bullish Bias: The setup is designed for long trades, capitalizing on higher highs and higher lows.
Risk-Reward Ratio: A stop-loss below the previous low ensures risk management, while the take-profit level aims for a favorable risk-to-reward ratio.
Backtesting Focus: This setup helps traders evaluate performance over historical price movements before applying it in real markets.
Corrections:
The text contains typos:
“How to backtest a tarding startegy” → Should be "How to backtest a trading strategy".
“Stop-loss (underneath previous low)” is correctly labeled, but formatting could be improved for readability