System Reviews by DailyFX Course Instructors - Page 15

Jeremy Wagner · #**211** (**permalink**) 07-27-2009, 07:46 PM

Quote:

Originally Posted by golfsailor

you are reviewing system as I am doing. I just for my own purpose but it's very interesting to get your opinion on the systems and to take part on how you are thinking.

I am doing some testing and at least I have found some systems I really don't like. Also found one I really like so far, have the flaw of not so much data to go on yet. I will come back about this system later, (so far I think it's manual ... ).

However I also found this, look at the attached snapshot from last week on the EUR/GPB pair. I have marked where the positions where taken. The first position I think is not so bad, however I think it was taken a bit too high and when looking at the stop a whopping 350 pips I think the idea is wrong. Then when the market moves the wrong way the system continue to buy in the "wrong" direction which if this was the USD/CAD pair would cause a meltdown.
Between the bands there was about 100 pips at the moment, having a 350 pips stop would only work if the pair is ranging. If there will be a breakout or in a trend this strategy will fail badly. With this strategy in a ranging market should be the same as to toss a coin on when to go in and another in which direction to go. With wide stops there should always be a profit as long as the range holds. However, is this trading ? Note, the bands is very narrow too, which might forecast a breakeout.

Yes, I am looking how the systems make the trades. I want to feel convinced the system I choose will make a good work.

Best regards

I commend you for digging into each trade so you can gain comfort with how they trade. Too often, I hear of FSS users that become frustrated with the style of trading a certain system they used. We don't hold anything back and have all prior trades available for review. Taking the time to feel comfortable with how the system trades will help you out in the long run.

System trading is a numbers game...the goal is over time to earn profit. It may be possible that you can make money while adding to a losing trade though we do not recommend it in discretion trading in our courses. I applaud you for taking the time and finding these types of behaviors out for your own understanding BEFORE they are traded with your live funds.

Jeremy Wagner · #**212** (**permalink**) 08-09-2009, 05:15 PM

With over 1000+ strategies available to choose from, you can save some frustration by doing a little homework. The FSS platform has a filter feature installed so you can widdle the list of potential systems down quickly. The TopSystem2000 made it through our sort for the RAR portfolio. However, upon closer review of the actual trades it has placed, only 4 trades have been placed in 2009! Although that is initially seen as a negative, it is possible the strategy is able to filter through various market conditions and not place trades when the conditions are not ripe. In holding that door open to that prospect, I will look to the info tab of the system and it turns out the description says nothing about this hypothesis. To make a long story short, if the system were able to determine the market conditions and trade only in certain conditions, then I would get excited. However, since nothing is said in the info tab, I will move on due to the few trades it places.

golfsailor · #**213** (**permalink**) 08-10-2009, 02:30 AM

Here is a lot to look at ... but I think it's about not to give up. There should be some good systems.

oleforex is doing good and I have been looking into the trades. Often very good placed, and run manually by Julian. He is among these traders who has the thought the market is always within a range. It's just moving the range. (I have been talking to him). Considering this and how he places the orders I think this is one of the best system availabe in a true ranging market. My opinion on his trading is that he maybe takes a little risk sometimes when trades are made from the one hour chart and maybe not considering the h4 chart, (or even longer term). (I can not be sure, just consider where and when the trades are made). However, I still think he is a very good trader and would be exellent if he was working with smaller stops. To me it seems like almost all the systems don't want to take small losses to find better positions, and maybe they are right doing so, but when looking back, that would be a better option most of the times.

No I will start to look at the following systems : AutoFuturosN, CAC, DBSwing, HildagoFX and Hero. I will be back in about two weeks time when I hope to have some trades with these systems.

CU

Rolf

Jeremy Wagner · #**214** (**permalink**) 08-10-2009, 01:37 PM

Quote:

Originally Posted by golfsailor

Here is a lot to look at ... but I think it's about not to give up. There should be some good systems.

oleforex is doing good and I have been looking into the trades. Often very good placed, and run manually by Julian. He is among these traders who has the thought the market is always within a range. It's just moving the range. (I have been talking to him). Considering this and how he places the orders I think this is one of the best system availabe in a true ranging market. My opinion on his trading is that he maybe takes a little risk sometimes when trades are made from the one hour chart and maybe not considering the h4 chart, (or even longer term). (I can not be sure, just consider where and when the trades are made). However, I still think he is a very good trader and would be exellent if he was working with smaller stops. To me it seems like almost all the systems don't want to take small losses to find better positions, and maybe they are right doing so, but when looking back, that would be a better option most of the times.

No I will start to look at the following systems : AutoFuturosN, CAC, DBSwing, HildagoFX and Hero. I will be back in about two weeks time when I hope to have some trades with these systems.

CU

Rolf

Now that you have identified which you feel is a good range trading strategy, the key is to be able to determine when the market enters into a range.

Bollinger bands on the GBPUSD chart can provide some assistance. If the bollinger bands are horizontal and contracting, that is an indication of a consolidation and ranging market. Eventually, the range may break, but perhaps you can identify a few periods of trading this system using bollinger bands.

Jeremy Wagner · #**215** (**permalink**) 08-10-2009, 03:04 PM

The AUDJPY has become a poster child of risk appetite. On the one hand you have the AUD which is one of the highest yielding currencies and the JPY as the funding currency.

I like looking at strategies and how they behave on carry trade currencies especially because these currencies are slightly biased on the direction of their trend. Generally speaking, they currency pair is going to be biased to the upside as traders flock towards the carry.

InsiderBreakout is not a flashy system. It reminds me a lot of the guy on your baseball team who doesn't make the headlines of the news, but when the game is on the line, he'll produce a hit or make that catch.

The 'statistics' are like that of the baseball player mentioned above. On average, its winners are 1.6 times larger than the losing trades and it will win 40-50% of the time...not real flashy, but those are figures can get the job done.

Notice how the equity curve burst up, then consolidates and moves sideways? That is a structure we can work with if we have other systems that experience their run ups and drawdowns at different times. I will keep this system a part of our short list because it could be 'teamed' up with another system of two and compliment them well...just like our baseball player above.

Jeremy Wagner · #**216** (**permalink**) 08-11-2009, 05:47 PM

Here is a system that trades a lesser known and followed pair in the USDCHF. Right off the bat, I notice how the curve has smoothly sloped from the lower left to the upper right. That strategy trades infrequently, but consistently. When I see approximately 60 trades in 2 years, I immediately look to the dates the trades were placed. If the trading comes in bunches where many trades appear around the same time, then no new trades are placed for several weeks, that draws a red flag for me. However, in this case, it has consistently placed 2-4 trades each month.

I am impressed with this system because it did sit on the sidelines during the 4th Q 2008 volatility and only 1 trade was placed from Oct 1 - Dec 1. Also, this strategy has managed to be profitable for each of its first 2 years. Its not real active which means less commission costs, but it has been consistent. Provide me with 3-5 of these types of systems and melt them together and I'll be excited about the portfolio.

A lower Max DD and trading only 1 max position provides us with some flexibility and this system is suitable for smaller capitalized account. We will include this system in our short list of considered strategies.

golfsailor · #**217** (**permalink**) 08-12-2009, 03:08 AM

These systems seem to be interesting.

- They do good on all pairs they are trading.
- They make some pips on trades. (about 20 or more in average).
- Some have substantial drawdowns but still have good results.
- Some open 30 positions which is too much for small accounts.
- I think most of the remaining systems, overall is loosing money .....

DBIntraday Positions 2
DBSwing Positions 2
Oleforex Positions 4 (Exellent Range Trading)

FxAlba Positions 2
Hero Positions 10
HidalgoFX Positions 2
Never-Greedy Positions 8
OshiFX Positions 2
Scorebot SG Positions 5
StockWatch Positions 4

TheMoneyTraders Positions 10 - 20

Gamete Game Maker NH Positions 30
Lipid Mobilization NH Positions 30
Oxidative Stress balancer NH Positions 30
Peptide Synthesis NH Positions 30
Secretory Rate NH Positions 30
Xchange chromosome NH Positions 30

CU

Jeremy Wagner · #**218** (**permalink**) 08-12-2009, 04:47 PM

Quote:

Originally Posted by golfsailor

These systems seem to be interesting.

- They do good on all pairs they are trading.
- They make some pips on trades. (about 20 or more in average).
- Some have substantial drawdowns but still have good results.
- Some open 30 positions which is too much for small accounts.
- I think most of the remaining systems, overall is loosing money .....

DBIntraday Positions 2
DBSwing Positions 2
Oleforex Positions 4 (Exellent Range Trading)

FxAlba Positions 2
Hero Positions 10
HidalgoFX Positions 2
Never-Greedy Positions 8
OshiFX Positions 2
Scorebot SG Positions 5
StockWatch Positions 4

TheMoneyTraders Positions 10 - 20

Gamete Game Maker NH Positions 30
Lipid Mobilization NH Positions 30
Oxidative Stress balancer NH Positions 30
Peptide Synthesis NH Positions 30
Secretory Rate NH Positions 30
Xchange chromosome NH Positions 30

CU

Which systems are you selecting for your portfolio?

Jeremy Wagner · #**219** (**permalink**) 08-12-2009, 09:52 PM

CADJPY is a risk appetite and oil trade all built into one currency pair. Since it is JPY related, an increasing price will bode well for risk appetite in the market. Also, CAD is a large exporter of oil and JPY imports its oil so it can provide a temperature for oil prices as well. Really, when you think about it, increasing appetite for risk means the traders feel the economy has a bright future which means oil might increase.

Here is a system that trades using the CADJPY. It is a system I like as it has been consistent for the past 12 months (including the 4th Q meltdown). I like systems that are consistent in their results that offer a proportionate high number of positive net pips for each pip in drawdown. The RAR has been improving on this system lately.

(A thought for future reference...what if you combine CADJPY-Mover, IntelliFX-Swing USDCHF, and maybe InsiderBreakout AUDJPY??) They have all steadily moved upward on the equity curve and it would be interesting to see how the combination of these systems look. We'll pursue that further down the road, but I feel the CADJPY-Mover is something to be considered for future reference and it will make it to our short list.

Xiao · #**220** (**permalink**) 08-12-2009, 11:41 PM

Quote:

Originally Posted by Jeremy Wagner

Hi Xiao. As Tom mentions, the VIX is for calculating stock market volatility. When the stock market is correlated to certain currency pairs you may find the VIX giving a clue about the FX market, but don't be fooled...VIX is a stock market indicator.

If you are interested in finding a way to calculate volatility in the FX market, you can use ATR (Average True Range).

thank you Very much Sir..

so No Need to see VIX index..isn't it?

Jeremy Wagner · #**221** (**permalink**) 08-13-2009, 02:13 PM

Quote:

Originally Posted by Xiao

thank you Very much Sir..

so No Need to see VIX index..isn't it?

Xiao, the VIX is a stock market indicator that measures volatility. A similar gauge in the FX market would be the Average True Range (ATR) indicator. It indicates the average movement for each price bar.

Jeremy Wagner · #**222** (**permalink**) 08-13-2009, 04:05 PM

Many traders are attracted to FX trading due to the relative ease of getting in and out of positions. However, trading on an intraday basis means you need to make more correct decisions and fewer bad trades to keep you account growing. On the other hand, embarking upon longer term trading where trades may be held open for several days does require larger stop prices, but you can get away with less winners.

CurrencyRider GBPCHF is a longer term trading system. There are a few instances when they have held trades open for a month. Their statistics are typical for a longer term trading style...

win% : 42%
Ratio of Avg Winning Trade to Avg Losing Trade = 2.3 to 1

As you can see, when using an average of at least 2 to 1 avg winner to avg loser ratio, you need to win only 40% of the trades to give yourself the chance of growing your account.

If you decide to trade this system, you will probably want to couple it with other systems. Sitting on trades for several days means you could be carrying unrealized losses for a while. Incorporating other strategies into the portfolio with this system could help smooth out those equity drawdowns.

golfsailor · #**223** (**permalink**) 08-15-2009, 01:39 AM

Hi Jeremy,

one thing that would make life easier is to make the "export to excel" feature a bit more customized. (I am using open office and the XLS file just makes a web page instead). What would help is choosing "." or "," for decimal point.(In some countries in europe this is a nice option). Alternatively create a csv file would be better. (This is from the history tab).

Another thing, the demo account just disappear after one month and my history is gone. Is there any way you may 1) get my history or 2) make the demo account last longer ?

Best regards
Rolf

Jeremy Wagner · #**224** (**permalink**) 08-17-2009, 04:38 PM

Quote:

Originally Posted by golfsailor

Hi Jeremy,

one thing that would make life easier is to make the "export to excel" feature a bit more customized. (I am using open office and the XLS file just makes a web page instead). What would help is choosing "." or "," for decimal point.(In some countries in europe this is a nice option). Alternatively create a csv file would be better. (This is from the history tab).

Another thing, the demo account just disappear after one month and my history is gone. Is there any way you may 1) get my history or 2) make the demo account last longer ?

Best regards
Rolf

If I'm understanding you correctly, you don't have excel so when you download it creates a web page? With that being the case, non-excel users would need a way to download the data.

I will pass your concern to Gavin and he'll make a note of it.

Yes, the demo accounts do automatically expire after 30 days. What you'll have to do is make a note of when the demo was created, then at 29 days, download the history of trades.

Jeremy Wagner · #**225** (**permalink**) 08-17-2009, 07:37 PM

We looked at this system several months ago as the EURUSD was screaming through a wide range. As the volatility has softened, so too have the net pips on this system.

This is one of the few systems that performed well during the credit freeze 4th Q 2008. I like that the system is able to produce a ratio of 1.8 : 1 of avg winners : avg losers. Despite its recent drawdown, it is still sporting a Risk Adjusted Ratio of 2.0.

I recently had this system included in the Low Equity Portfolio (see prior REVIEW HERE). I feel it is a good system. However, I feel it is not for a portfolio with limited equity to work with which is why I eventually exchanged it out of the Low Equity Portfolio. This is a good system to pair with another system or two that may incur their drawdowns at different times. This may help smooth out the combined equity curve.