Backtesting Trader Mike's High win rate strategy

Summary

The video backtests Trader Mike’s selective 1:1 risk-to-reward strategy on ES futures. The strategy combines a higher-timeframe candle pattern, a middle-timeframe failed breakout, and a low-timeframe entry shift.

The presenter considers the early results promising for traders who prioritize win rate, but emphasizes that the sample is too small to establish a reliable edge.

Strategy Framework

Setup and confirmation

• 1-hour directional setup and target: Look for a “number 3” candle that sweeps both the high and low of the prior candle and closes beyond at least its body. The presenter says Trader Mike’s original definition appears stricter, requiring a close beyond the full wick, but uses the broader definition to generate more testable setups. The candle identifies a likely price target.
• 15-minute confirmation: Before the target is reached, look for a “failed 2”: price sweeps one side of a prior candle or level but fails to close beyond it. This is treated as evidence that price may reverse, at least temporarily.
• 1-minute entry trigger: Require a market-structure break confirmed by a strong close, with a fair value gap (FVG) forming along the move.

Entry, risk, and exits

The presenter usually enters at market after the shift. For longs, the entry should be in discount; for shorts, in premium. The stop-loss distance is set equal to the distance from entry to target, creating a 1:1 risk-to-reward trade. Stops can be relatively wide, as the model does not emphasize highly precise entries.

The default take-profit target is the 1-hour number 3 candle’s draw. The presenter suggests considering a more conservative exit near the target because price may front-run it. After a particularly deep pullback, a discretionary “base hit” at an interim level may be preferable to aiming for the full move.

Filters and cautions

• If the target is hit before the failed 2 appears, skip the standard setup. Taking later trades in the same direction is an optional, lower-confidence variation.
• If a strong opposing 15-minute candle appears before the low-timeframe shift, wait for another failed 2 rather than entering into that opposing structure.
• An opposing FVG may reduce the setup’s probability, while an FVG supporting the failed 2 may add confidence. The presenter recommends tagging these conditions and evaluating them with more data.
• The presenter suggests stopping after one loss rather than continuing to take attempts.
• For ES, avoid trading before 9:45 a.m. New York time, allowing the first 15 minutes after the open to pass.

Markets and Timeframes

The strategy was tested on ES; the presenter also discusses NQ and YM.

Forex is mentioned as a possible adaptation, though the 1-minute execution timeframe may be unsuitable for many pairs because of spreads. One suggested variation is to use 4-hour, 1-hour, and 5-minute timeframes.

The presenter suggests that a selective trader could monitor two to four assets for setups. Indices, forex, crypto, and metals are also mentioned when discussing how to choose a strategy based on market preference, but they were not all tested here. CPI is cited as an example of news that can produce large candles and potential setups.

Backtest Results

The presenter combines the testing to report 26 trades, a small sample. The reported results include:

• Approximately 80% wins
• A profit factor a little over 4
• Positive expectancy
• A six-win streak
• No more than one consecutive loss in the sample

The presenter describes drawdown as minimal but cautions that the sample is too small for firm conclusions. The 1:1 configuration performed better in the tested risk-to-reward comparison than more aggressive profit targets, with relatively generous stops.

Most sample profits came in the first few hours of the session. The presenter says trading roughly 9:45 a.m. to noon New York time might have captured about 70–80% of sample profits, but notes that this needs further validation. The discussion suggests a low trade frequency of roughly 3–6 trades per month, though that figure is unclear in the auto-generated subtitles.

The presenter recommends testing 100 or more trades across multiple market conditions before risking real money. Overfitting is a potential concern because the reported result comes from only 26 trades across limited testing periods.

Trader Mike’s Reported Claims

The presenter says Trader Mike claimed to have made $24,000 in March, which Mike described as a bad month, and later reported being up more than six figures month-to-date. These are attributed claims and have not been independently verified.

Disclosures and Cautions

No explicit “not financial advice” disclaimer is heard. The presenter does caution viewers to validate the strategy over a larger sample and across multiple market conditions before using real capital. Backtest results do not establish future performance.

Presenters and Sources

• Presenter: An FX Replay host; no name is provided in the subtitles. The host says they trade quarterly theory on ES and NQ, sometimes YM, and have used mechanical 15-minute rising- and falling-wedge setups on CFDs, reporting mid-five-figure payouts from those trades.
• Strategy source: Trader Mike, whose failed-2 strategy is being tested.
• Other sources mentioned: Omar Agag’s engulfing bar play, a Toto Capital Optimization video, and Trader Day’s Quarterly Theory mentorship.