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If you want to gradually progress from a beginner to an expert in Crypto Assets trading, then understanding several common bearish backtest entries is essential. In this article, we will analyze four methods for this operation in detail: block backtesting, supply interruption backtesting, Fibonacci backtesting, and structural backtesting. Are you ready? Let's take a look at these strategies together.
**Block Backtesting**
First is the block breakback test. Here, beginners often make mistakes; when they identify a block break opportunity, they are too eager and enter the market rashly without waiting for the right moment. As a result, they either get deceived or become trapped in the trade. In contrast, experts will patiently wait for the price to break through key blocks and confirm the retest of those broken blocks. They usually seek confirmation signals such as rejection candlesticks (for example, bearish pin candlesticks) or a surge in trading volume before taking action. Experts will only act after seeing these signals, setting stop-loss orders above the retest area and targeting lower price levels.
💡 A few tips:
- Be sure to wait until a clear rejection signal appears.
- Use a smaller time frame to optimize entry if necessary.
**Supply Interruption Backtest**
Next is the supply interruption backtest. Many beginners, although they identify the supply zone interruption, fail to wait for the price to backtest and confirm resistance to that area, resulting in hasty entries, followed by a price pullback to the supply zone, facing losses. In contrast, experts will wait for the supply zone to break through and retest as resistance. Confirmation signals usually come from bearish patterns or volume exhaustion. After confirmation, experts set their stop-loss above the supply zone and establish lower targets based on market structure.
🔑Important Reminder:
- Pay attention to lower highs and bearish signals during backtesting.
- Understand the supply zone and its response during retesting.
**Fibonacci Retracement**
Regarding Fibonacci retracement, beginners are often misled by random entries, as they do not understand why prices react at specific levels. They may even rashly enter trades simply because a certain Fibonacci level has been touched, lacking proper signals. Experts use Fibonacci retracements (such as 61.8%, 50%) as potential reversal points but wait for confirmation from price action. They look for rejection candlesticks, divergences, or momentum breaks as additional confirmations. After confirmation, experts set their stop losses above Fibonacci levels, with targets determined based on the overall trend.
📈Additional Suggestions:
- Combine Fibonacci levels with other technical indicators for better confirmation.
- Don't impulsively enter the market just because the price reaches a certain level; make sure to wait for the right signal.
**Structure Backtesting**
Finally, let's look at structural backtesting. Beginners often enter immediately when the structure is being backtested, ignoring the strength of rejection or market sentiment. They often act solely based on the structure, disregarding other confirmation signals. In contrast, experts identify key structural levels (such as support turning into resistance) and wait for the price to be rejected during the backtest. They ensure that the backtest aligns with the overall market trend and confirm entry with bearish signals. Experts set stop-losses above the structure and establish clear profit targets based on the current trend.
🔍Must remember:
- Ensure that the structure aligns with broader market analysis.
- Use multi-timeframe analysis to validate the effectiveness of backtesting.
Final Summary
Whether you are just starting to try Crypto Assets trading or have already achieved some success and want to transition from a beginner to an expert, the key lies in patience, strict governance, and a deep understanding of backtesting. Combining backtesting with other technical signals will not only help you increase your trading success probability but also allow you to participate with greater confidence.
⚠️Disclaimer: This article contains third-party views and does not constitute financial advice. It may contain sponsored content.