Now that we have built a portfolio for two of the common currency pairs (EURUSD & GBPJPY) we will let that portfolio trade and check in on it from time to time.

Today, we are going to begin building a “Low Equity” Portfolio for those who are looking to start small with say $5,000.

Since there are several hundred systems to choose from, we need to narrow the search to those systems that will give us a greater chance of success. These means we need systems who don’t tie up a lot of free margin on intraday drawdowns as we need to be conscience of capital preservation. Therefore, we are going to focus our search on systems with the following characteristics:

1) 3 or less max positions,
2) Start date is older than 3/1/08,
3) Risk adjustment factor is greater than 1.5

This will give us older systems that are generating profits in excess of their max drawdown to review. The end result is that we want a total of 5 max positions between a combination of systems so we are leveraged at less than 10:1.

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