Chapter 14 · Part Four
How to Backtest This Model
Twenty days of honest data, logged the same way every time.
About 9 minutes
Open TradingView. NQ futures, three-minute chart. For each trading day, go through this process.
Pre-session, 2H chart
- Mark the most recent swing high and low
- Did price fail to seek either one? This determines bias
- Where is untaken ERL on both sides?
- Is price in premium or discount?
- Any HTF FVGs?
- Write: BIAS = BULL, BEAR, or NONE
Session, 5m then 1m and 3m
- Mark PDH, PDL, ONH, ONL, equal highs and lows
- Did price sweep ERL aligned with your bias inside the kill zone?
- Was there an impulsive displacement after the sweep?
- Did the displacement break the neckline?
- Did it leave an FVG?
- Did price retrace into the FVG?
Record your results
Field
Date
- Trading day
Field
HTF bias
- Bull, Bear, or None
Field
ERL swept
- Which level was taken
Field
Neckline break?
- Yes / No
Field
Entry price
- FVG fill or flip candle close
Field
Stop price
- Price level of the structural stop
Field
Stop width (pts)
- Entry to stop distance. Recorded, not filtered
Field
Contracts
- Size taken at that stop width
Field
Risk ($)
- Actual dollars at risk. Should be near-identical every trade
Field
First key level
- The internal level that triggers the move to breakeven
Field
Cleared it?
- Yes / No. If no, this was a full stop
Field
Target (ERL)
- Opposite external liquidity
Field
Target hit?
- Yes / No
Field
Final R
- Actual R achieved, not points
What you are looking for
Most trades clearing the first key level, so the stop reaches breakeven. A meaningful share of those running all the way to the opposite ERL. Average R above 2:1 across every trade, winners and breakevens together.
Stop width varying widely while dollar risk stays flat. Losses that are clean stops, not catastrophic.
Do twenty trading days. That gives you enough data to see if the model has a structural edge.
Check yourself
Your twenty day log shows dollar risk ranging from $180 to $900 per trade. What does that tell you?
Before you move on
- Your risk column is flat across every row
- You logged the days you did not trade, and why
- You have twenty days before you draw a conclusion
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