Prop Firm Strategy Backtest - Joovier Gems - CAN IT PASS?

Summary

In this video, Eddie Pips tests a simple scalping strategy with backtested results to see if it can pass a prop firm challenge. He demonstrates the strategy, which involves marking key times and drawing a box between the highs and lows on a 5-minute chart, waiting for price to break out. After backtesting the strategy on FX Replay, Eddie shows how it led to a 16% profit with a 60% win rate, passing the FTMO challenge in less than a month. He recommends the strategy for its simplicity and effectiveness, especially for beginners.

Takeaways

• 😀 The YouTuber, Eddie Pips, tests trading strategies to see if they can pass a prop firm challenge, specifically focusing on a scalping strategy with back-tested results.
• 😀 Eddie invites viewers to suggest trading strategies for testing, creating an interactive testing process based on community input.
• 😀 The strategy being tested involves marking vertical lines at 3:00 a.m. and 9:00 a.m. on a 5-minute chart, drawing a box at the high and low of the session, and entering trades when price closes above or below the box.
• 😀 Trades are entered immediately after the candle closes outside the box, with stop losses placed below or above the candle and a fixed 1:2 risk-to-reward ratio.
• 😀 The testing process involves backtesting the strategy over a random month, tracking wins, losses, and drawdowns to ensure the strategy meets the prop firm’s requirements.
• 😀 The strategy is simple and beginner-friendly, designed for easy implementation and quick execution, which makes it accessible to traders of all experience levels.
• 😀 Eddie uses FX Replay for backtesting, with settings to test on a 5-minute chart and track each trade’s progress in real time, adjusting for each session's opening times.
• 😀 The prop firm challenge is conducted using FTMO rules, including a 25k initial balance, 2% target reward, and a two-step challenge process.
• 😀 After completing the backtest and applying the strategy, Eddie's account balance increases by 16%, and the strategy is successful in passing the challenge in less than 30 days.
• 😀 The final analytics show a 60% win rate with 12 wins and 8 losses, a maximum drawdown of just 4%, and a profit factor of 3, demonstrating the effectiveness and robustness of the strategy.

Q & A

What is the main purpose of Eddie Pips' video?

Eddie Pips tests a super easy scalping strategy to see if it can pass a prop firm challenge, using backtested results and a random month for the test.

How does Eddie Pips select the strategy to test?

Eddie Pips selects a trading strategy, then picks a random month and backtests it using FX Replay. He tracks wins, losses, drawdown, and whether it meets the prop firm's rules.

What is the strategy's entry rule?

The strategy's entry rule involves marking a box between the high and low of the 3:00 a.m. and 9:00 a.m. time period on the 5-minute chart. The trade is triggered when the price closes above or below this box.

What is the stop loss and risk-to-reward ratio used in the strategy?

The stop loss is placed below the candle that closed outside the box, and the risk-to-reward ratio is set at 1:2.

What platform does Eddie Pips use for backtesting?

Eddie Pips uses FX Replay for backtesting the strategy, where he simulates the trades and tracks the results.

How does Eddie Pips determine whether a trade passes or fails the prop firm challenge?

He uses a custom app called the EdgeFinder, which helps him track if the challenge rules are met. The app provides feedback on whether the challenge has been passed or failed.

What are the results of the backtest for this strategy?

The backtest shows a 16% profit with a win rate of 60%. There were 20 trades in total, with 12 wins and 8 losses. The maximum drawdown was about 4%, and the strategy achieved a profit factor of 3.

How long did it take to pass the prop firm challenge in the backtest?

It took about 30 days to pass the challenge, starting from the 1st of the month and ending on the 30th.

Does Eddie Pips believe the strategy is suitable for beginner traders?

Yes, Eddie Pips believes the strategy is simple and easy to follow, making it suitable for beginner traders.

Would Eddie Pips recommend this strategy for others?

Yes, Eddie Pips highly recommends this strategy, noting that it is simple to follow and has proven successful in his tests.