What's in your FSS Portfolio? - General Discussion
The Forex System Selector (FSS) is a popular alternative to self trading that allows traders to build a portfolio by combining automated strategies from over 40 backtested systems. This forum was put in place to allow experts and novices alike share their ideas on how to build and manage a successful portfolio.
To view performance results, visit the Forex System Selector Home page. For more details on this product, contact an FXCM specialist: http://www.fxcm.com/contact-fxcm.jsp.
[QUOTE=DailyFX Forum Administrator;136275]FXCM Forex System Selector is a revolutionary currency trading platform, executing and managing trading signals from a broad range of system developers and signal providers.
Signals are executed on the clients' own account. The Forex System Selector platform enables traders to build and create a portfolio using pairs from a variety of systems.
QUOTE]
Can you run this platform and the regular platform at the same time? Would you need 2 accounts to do this? Initial accont size for certin automation selections? This is kind of vague.. Would like more information.
FXCM Forex System Selector is a revolutionary currency trading platform, executing and managing trading signals from a broad range of system developers and signal providers.
Signals are executed on the clients' own account. The Forex System Selector platform enables traders to build and create a portfolio using pairs from a variety of systems.
QUOTE]
Can you run this platform and the regular platform at the same time? Would you need 2 accounts to do this? Initial accont size for certin automation selections? This is kind of vague.. Would like more information.
Hi there, yes you can run both the Trading Station and Forex System Selector platforms at the same time. And yes, you would need two seperate accounts to do this. Keep in mind though, you would be provided a "read only" login that will allow you to monitor the progress of your Forex System Selector account by logging onto the Trading Station.
The only minimum is the $2,000 required to open the account on Forex System Selector. There is no monthly subscription fee regardless of how many systems you select for your portfolio. Your cost is the $1 round-turn commission per mini lot traded and the usual spread.
It's important to know that you should keep the leverage of portfolio as low as possible by monitoring the leverage indicator built into the Portfolio Builder screen for your reference. So this may encourage you to be very selective in terms of how many systems you choosee relative to your account balance.
I'm actually in the process of preparing an application for my model to be traded on the platform. When PFI first launched its money management model I also launched a signal service for clients who didn't meet the minimum funding requirements, which also helped us ramp up revenues.
The biggest complaint was, it was difficult for many traders to execute the signals as they would arrive nearly anytime of the day; with this application that would be a non-issue.
I need to forward more of my model detail to the back-office and I need to do some discovery of my own but this may be a good solution for all of us. I'll post more when I know more.
I'll also make a complete Due Dilligence package available to anyone who wants to dig into the metrics of the model a little more so they know exactly what it should do and how and where it should fit into other trading activity.
If you have questions you can also PM here; please give me about 24hrs to respond.
I'm actually in the process of preparing an application for my model to be traded on the platform. When PFI first launched its money management model I also launched a signal service for clients who didn't meet the minimum funding requirements, which also helped us ramp up revenues.
The biggest complaint was, it was difficult for many traders to execute the signals as they would arrive nearly anytime of the day; with this application that would be a non-issue.
I need to forward more of my model detail to the back-office and I need to do some discovery of my own but this may be a good solution for all of us. I'll post more when I know more.
I'll also make a complete Due Dilligence package available to anyone who wants to dig into the metrics of the model a little more so they know exactly what it should do and how and where it should fit into other trading activity.
If you have questions you can also PM here; please give me about 24hrs to respond.
John E. Putman II, CTA aka Bulldog
Hi John, thanks for jumping onto the thread and sharing your interest in the platform. We look forward to seeing your model in action.
On a related note, I invite anyone to jump onto the thread sharing their ideas and approach for building a portfolio from the various systems available on the platform. There is probably a ton of different ways, people can approach this depending on their risk tolerance, risk capital and overall opinion of the market or specific currency pairs.
In a future post, I'll share some of the basic measures people have been using to help them identify potential systems that they'd choose to create a diversified portfolio.
Jonathan brings up an important point that each trader needs to consider as they select systems from the application.
I havent had a chance to thoroughly review the application yet (I will this week) so Im not sure what functionality is there but here are a few things traders should consider as they build their portfolios:
Highly Correlated Trades increase the risk in your portfolio.
Traders often look at the Equity Curve of a system or the mix of various systems and tweak and tune exposure until they find an EC and risk metrics that suits them. If they fail to compare the underlying trades in those systems they may be setting themselves up for failure. If the trades in each system have a high correlation, when the market turns around or the longer term price action of the market changes, the models could all collapse at the same time.
Lets look at the carry trade for a moment; even though there are many technical systems that dont take into account the interest rate spreads, they benefit from them all the same. I recently finished a consulting project where the base application produced 4 to 5% annual gains in almost every currency pair it was applied to in back testing, except the USD/JPY where it produced nearly 9% returns. The optimization work that had been done up to that point had then been skewed by that bias; when the Yen was removed returns dropped off sharply (in specific configurations) and volatility rose substantially. We saw this phenomenon in almost every times series traded by the application across nearly 100 different variants of the application; even down to the intraday trades.
The reality is its very hard to get low correlation in a portfolio and you have to be very careful about how you design your mix: Especially if your models are routed in the same basic theory.
If youre able to get your hands on the individual trades you can run a correlation on them to see how close they are; you can also look at constructing a classification table of some sort to quickly distinguish how and when the trades are initiated. This is important because almost every trader and model developer (yours truly included) will do his/her best to convince you that their model is the most unique and advanced thing out there But the reality is, there are only two sides of the market you can be on, and there are a relatively fixed number of events that will trigger price action.
As you apply your classification work youll find a large majority of these models are being executed on very similar price action events and are being executed in very similar ways.
Its no mistake that despite all their advanced technology and mathematics, quant models as a whole took a bath this summer: There is high correlation in the methodology (just like any technical or fundamental based approach) and as a result there was a high correlation in the losses.
A System that Produces 5% a year in the EUR/USD is a good as a system that produces 20% a year using the EUR/USD, GBP/USD, USD/JPY and USD/CHF.
Ive deconstructed a lot of models that were supposedly capable of 20% a year (or higher) returns. These models have typically had terrible Sharpe Ratios and other risk metrics because of the correlation between the pairs. Unless its an outright hedge, there is often very little difference between a long EUR/USD and a long GBP/USD: Yes there is a difference in the spread (transactional impact) and the volatility, but if you look at the impact they have on your portfolio over the long term they will often be very close to the same. Having both of these positions long is typically no different than having two long EUR/USD positions. Why is this important? Because the difference in the two returns isnt an improvement on actual net pips returned through better trading; its only a higher risk profile. Now having said that, the version of my model Im bringing to the application is also guilty of this its not necessarily a negative thing, but its something you should be aware of, especially if youre going to add leverage to the signals that are sent. In the end you have to know what youre true risk profile is (not how much money you need to make but how much are you willing to loose) and then be able to break out the real risk level of the model before you add additional risk to it.
I could go on at length about this but I dont want to bore you to tears on a Monday morning; suffice to say, as you look at models, there will be more that the equity curve that you should consider.
Ill be providing a lot of detailed information about the model and will be happy to break out whatever I can to help traders make an informed decision. If you have questions dont hesitate to ask.
I'm looking for a good EURUSD system that can take advantage of an upside breakout when it does happen. I think I like the WealthBuildersFX-Striker which seems to be pretty decent. Has had good profits this past year & seems like it would do well in breakouts.
Where I can I learn more about the system? Does anyone have any experience with it?
Based on the image you submitted, it seems that while the system has done very well, that the equity curve remains choppy. When assessing the risk you want to look at both the Maximum Drawdown and the peak to valley that you see on the equity curve. You may consider pairing this system up with a range bound system to smooth out that curve.
The upside is that this system typically only holds 1 position at a time (as shown in the max positions). Although it may at times open more than 1 position, for the most part we can assume that with a 10K mini lot this one system will not raise your leverage too much. The goal when starting out is to keep it below 10:1.
If you want to learn more about this particular system & contact the system provider, you can go to the PERFORMANCE RESULTS on the FSS home page and click on "systems."
I would say try it out on your demo for a while and see how it goes.
I'm actually in the process of preparing an application for my model to be traded on the platform. When PFI first launched its money management model I also launched a signal service for clients who didn't meet the minimum funding requirements, which also helped us ramp up revenues.
The biggest complaint was, it was difficult for many traders to execute the signals as they would arrive nearly anytime of the day; with this application that would be a non-issue.
I need to forward more of my model detail to the back-office and I need to do some discovery of my own but this may be a good solution for all of us. I'll post more when I know more.
I'll also make a complete Due Dilligence package available to anyone who wants to dig into the metrics of the model a little more so they know exactly what it should do and how and where it should fit into other trading activity.
If you have questions you can also PM here; please give me about 24hrs to respond.
John E. Putman II, CTA aka Bulldog
hi there bulldog .
you said recently that you were gonna do some research and development on the system selector , any joy ?
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Originally Posted by The Sniper 
how did you get on ?
