Trading a confirmed pattern
You will learn to
- The exact tested rules
- Planning stop, target and size
- Living with losing streaks
The tested rules (and the 4H bot's)
- Timeframe: 4H. The same rules on 1H and 15M did not work after fees.
- Entry: at the confirmation close (the backtest used the next open — nearly the same). No anticipating.
- Stop: beyond the pattern's extreme + 0.2 ATR for tops, bottoms and head & shoulders; 1.2 ATR for triangles, wedges and channels; never closer than 0.25 ATR.
- Target: 2R. 1.5R and 3R also tested positive.
- Time exit: close after 96 candles (16 days) if neither is hit.
- Size: fixed small risk — the bot uses 0.25% per trade.
✓ What our backtest found
All 4H chart patterns together: +0.24R per trade after fees over 687 unseen trades (2024–26, 10 pairs; 95% range +0.11 to +0.39), positive in both halves, for longs and shorts, on 9 of 10 pairs — while random entries with the same exits made ±0. Replaying the live rules with one position per pair: +0.16R over 360 trades, about 3 a week.What the edge feels like
A 47% win rate at 2R means a losing streak of 6–8 trades will happen over a few hundred trades. +0.24R per trade at 0.25% risk is about +0.06% of the account per trade — real, but slow. Most of the work is not breaking the rules during the losing streaks.
Checklist
☐ 4H chart
☐ Pattern marked ✓ confirmed (not forming, not seen late)
☐ Stop by the rule, not by feel
☐ Target 2R; size from the risk %
☐ Journal it — judge after 30–50 trades
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Check yourself
1. When does the tested strategy enter?
- When the pattern starts forming
- At the confirmation close ✓
- At the measured-move target
Waiting for the close through the line is what made it work.
2. With a 47% win rate at 2R, losing 7 in a row is…
- A sign the strategy is broken
- Normal over a few hundred trades ✓
- Impossible
Streaks are expected; judge a strategy over 30–50+ trades.
3. On which timeframe did the pattern rules hold up?
- 15M
- 1H
- 4H ✓
1H and 15M were break-even or worse after fees.
Terms in this lesson
- Invalidation
- The price at which a setup is proven wrong — where the stop goes.
Practise it on real charts. In the app, this lesson comes with real examples (reveal what happened next), a graded drill and the track test. Open the Academy in NexusCore — free →