It’s a fight for the pips!

I’m a forex rookie, and I wanted to test two different strategies. The strategies are essentially the same, but the key difference is the TP.

The ALI strategy is based on JannaFx’s channel strategy. She goes for 5% profit in one of her strategies. 5% doesn’t sound like much, but it adds up. Also, she has a risk/reward of 3:1, which seems high to me.

The FOREMAN strategy is based on JannaFx’s channel strategy as well. However, the TP is higher. The TP is based on the height of the previous swing, or the height of the price range. In these trades, it’s usually in the shape of a rectangle, and I aim for 1/3 or 1/2 the height of the rectangle.

I always think of Foreman as a huskier kind of guy (because of how he looked selling the Foreman grill, haha), and his big heavy punches were no joke; so ALI is the 5% small TP trades, and FOREMAN is the larger TP trades.

Here are the results. I hope the numbers make sense to you guys. My spreadsheet was doing something automatic and rounding the numbers, and I didn’t know how to fix that. So, I had to write them the way I did. By the way, these trades are all backtests. Not live, not even demo. Just backtests. Next step is demo.

Here are the charts for 8 of the trades. I got neater with my charts after each one. So, I’m just posting 8 of 10 trades.

trade #2. yellow line= entry, green line= 5% TP, blue line= larger TP, red line= SL

trade #4

trade #5 here, the dotted line= ALI (5%TP), the solid line= Foremen (larger TP)

trade #6 on this chart, the 5% TP is so close to entry, you can’t see it.

trade #7


trade #9

trade #10

Here’s my problem. The SL on the ALI 5% trades is the same as the Foreman larger TP. I felt like I needed the SL to be wide in order to stay in the trade; so price has some breathing room.

Final thoughts:

  1. I would like to tighten up the SL on the 5% TP trades because the risk is excessive. 15:1 risk/reward is insane.

  2. The FOREMAN trades yieled a 9.5% higher ROI, however, the ALI trades had no losses (except the one where I forgot to delete a pending order).

  3. The ALI trades have a higher winning probability than the FOREMAN trades, even though the FOREMAN trades brought home more bacon.

Final verdict:

I hate to say it, but FOREMAN won this one. Overall, the FOREMAN strategy had higher profits, and better risk management. However, ALI had higher success probability; and if I can adjust the stops on the 5% TP ALI trades, then ALI would be a lower risk, higher probability strategy.

Who do you guys think won this battle and why?

Which strategy is better?

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In Pipsology, I read the importance of journaling. But to be honest, I didn’t want to do it.

I enjoy books, but for some reason, I didn’t want to do it. Eventually, I started doing it on my computer and that’s when I got more interesting.

Once I started documenting my trades, and keeping track of my errors, I could see the patterns in my mistakes.

Now, when I journal, I have the same format as my journal book, but I can also add a picture of the trade. This way, I have a visual representation of what happened, what my thought process was, and where I could have made a better decision.

It’s a process, though. But it’s evolved into a better journaling system.

I finally understand the importance of journaling.