Welcome to FXCM and Forex System Selector!

Forex System Selector (FSS) demo accounts come pre-loaded with a default portfolio to help you more quickly and easily get started with FSS. The portfolio is not a recommendation of systems to use but is provided so you can immediately see how FSS works without having to take any actions.

When you’re ready to take control, it’s important to select systems based on your available risk capital, trading goals and preferences. You can add, delete, and change the systems in your current portfolio at any time. For more information on changing your portfolio, please Watch This Video.

The purpose of this forum is to provide you with a basic framework for:

Why we selected the systems in your demo portfolio
What you need to know in order to locate the right systems
How to avoid the common mistakes most new users make

In addition to these three points, we hope you will use this forum to ask ongoing questions as you continue to learn how to get the most out of Forex System Selector.

The current demo portfolio consists of 4 systems:



*DBSwing EURUSD
*PipRancher EURJPY
*PipSniper USDJPY
*BreakoutMaster AUDJPY


These are fairly active systems that have enjoyed the breakouts and volatility of 2008-2009. When I sorted through the nearly 1100+ systems, I wanted to find systems with the following criteria:



*Start Date - at least 10 months ago
*Risk Adjusted Ratio - 1.5 or greater
*Maximum Drawdown - 1500 pips or less
*Maximum Positions - 3 or less


Here’s a breakdown of why I chose the trading parameters that I did:


Start Date - I like a system that has endured several months of trading. A system that has a good track record, over a longer period of time, often means that the system can endure numerous market conditions. This typically implies that the system is more robust and well rounded.



RAR – Risk Adjusted Return is a measurement that provides insight on how well a system can recover from losses. RAR divides return (in pips) by maximum drawdown (in pips). The larger the number the better. I have found that a number greater than 1.5 indicates the system should be hitting new highs on a fairly frequent basis.



MaxDD – Maximum Drawdown is the largest peak to valley loss found on a system’s equity curve. The range of drawdowns that any individual should realistically consider will change drastically based on their risk tolerance and the amount of available capital they have to work with. I prefer a fairly conservative system with a drawdown less than 1500 pips.



MP - Maximum Positions and Maximum Drawdown are strongly correlated. You’ll typically see that the lower the MP the lower the MaxDD. This is not always the case but it frequently happens. In the long-run, the more open positions you have, the greater the possibility of larger gains and larger losses. Because of this, I prefer to work with a system that opens fewer positions at a time. That way my chance of occuring larger losses can be minimized.



All The Best,
Jeremy Wagner
DailyFX Course Instructor

__________________
Enroll in our online FX Power Course today and get personalized instruction from our team of expert traders 24 hours a day. We have taught over 25,000 students and in just eight lessons, we will teach you the fundamentals of Forex trading. Click here to get more information

*Past performance posted by Signal and Systems Providers (“Providers”), is not necessarily indicative of future results. No representation is made that any account is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particularly trading program. The composite monthly results are primarily hypothetical results of the master demo and its representation of the Providers, though performance results displayed may represent a combination of live and hypothetical results and are not exclusive to either. There are numerous other factors related to markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. In the event that specific trades were simultaneously executed in hypothetical and live, real-time trading, the lesser of the two results will be displayed. There is no guarantee that one applying these methodologies would have the same results as the hypothetically posted. Since trading successfully depends on many elements including but not limited to a trading methodology and a trader's own psychology, the web site does not make any representation whatsoever that the above mentioned trading systems might be or are suitable or that they would be profitable for you. Please realize the risk with any investment and consult investment professionals before proceeding. The trading systems herein described have been developed for sophisticated traders who fully understand the nature and the scope of the risks that are associated with trading. Should you decide to trade any or all of these systems' signals, it is your decision.

Links to third-party sites are provided for your convenience and for informational purposes only. Forex Capital Markets LLC bears no responsibility for the accuracy, content, or any other matter related to the external site or for that of subsequent links, and accepts no liability whatsoever for any loss or damage arising from the use of this or any other content. Such sites are not within our control and may not follow the same privacy, security, or accessibility standards as ours. Please read the linked websites' terms and conditions.

Now that you know how I came up with these systems, let’s start talking about you.

*Is the current default portfolio best fit for you?
*How much risk capital will you be working with?
*How risky of a trader are you?

Let me know what your plans are and lets work together to get you started with Forex System Selector.

All The Best,
Jeremy Wagner
DailyFX Course Instructor

__________________
Enroll in our online FX Power Course today and get personalized instruction from our team of expert traders 24 hours a day. We have taught over 25,000 students and in just eight lessons, we will teach you the fundamentals of Forex trading. Click here to get more information

*Past performance posted by Signal and Systems Providers (“Providers”), is not necessarily indicative of future results. No representation is made that any account is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particularly trading program. The composite monthly results are primarily hypothetical results of the master demo and its representation of the Providers, though performance results displayed may represent a combination of live and hypothetical results and are not exclusive to either. There are numerous other factors related to markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. In the event that specific trades were simultaneously executed in hypothetical and live, real-time trading, the lesser of the two results will be displayed. There is no guarantee that one applying these methodologies would have the same results as the hypothetically posted. Since trading successfully depends on many elements including but not limited to a trading methodology and a trader's own psychology, the web site does not make any representation whatsoever that the above mentioned trading systems might be or are suitable or that they would be profitable for you. Please realize the risk with any investment and consult investment professionals before proceeding. The trading systems herein described have been developed for sophisticated traders who fully understand the nature and the scope of the risks that are associated with trading. Should you decide to trade any or all of these systems' signals, it is your decision.

Links to third-party sites are provided for your convenience and for informational purposes only. Forex Capital Markets LLC bears no responsibility for the accuracy, content, or any other matter related to the external site or for that of subsequent links, and accepts no liability whatsoever for any loss or damage arising from the use of this or any other content. Such sites are not within our control and may not follow the same privacy, security, or accessibility standards as ours. Please read the linked websites' terms and conditions.

Hey guys , I enjoyed the movie on your program here. Im really liking the idea of these automated systems though because I travel alot for my job in insurance. What I dont get is how to narrow down the systems better. There are literally hundreds of them and I dont have time to search through them.

Any personal recomendations on parameters to sort these things ? What systems do you run if any ? How long do you recommend I test these things in a demo ? I really want to get going but dont have too much time to look over all the different programs. Thanks in advance.


Bernie

Bernie,

Thanks for posting and welcome to FSS. You're question is perfect and you're not alone. Using FSS is all about finding and selecting systems to use on your account. The best way to start sorting through and locating systems that work best for you is with the filters that can be found in both the Performance tab and the Portfolio tab of the online webclient.

I recommend using the Portfolio tab as this is the same area that you will use to add systems to your portfolio once you've located ones you like.

Now to the real question. What filters should you use? The answer to this question will be different for every client. In order to know what filters to use you have to first ask yourself some questions. Let me walk you through the thought process now. First ask yourself:

1) How much risk capital do I have to dedicate to the FX market?
2) How much of that risk capital am I willing to risk on my FSS portfolio?
3) What trade size am I going to use (how many $/pip do I want to gain or lose on my trades)?

These first three questions will tell you a lot about your risk tolerance and which systems might be best to consider. Here's an example. Let's assume you told me that you have $10,000 of risk capital and you're willing to risk $2,000 of it on the FSS product. Let's also assume that you are fairly conservative so you choose to trade with the smallest trade size, 10,000 units ($1/pip).

By answering these questions you have learned a lot about your trading criteria and preferences. You now know that you have $2,000 of capital to work with (your wiggle room). You also know that your pip cost is going to be $1/pip for each trade that is placed on your account. So, assuming the worst case scenario (that you never make a profit), you can take on up to 2,000 pips of loss ($2,000 / $1/pip = 2,000 pips) with your portfolio.

Ok now that you've answered these questions, you've got your first filter - Max DD < 2000. But there are a lot of systems with a Max DD or maximum drawdown less than 2,000. And you may want to use more than one system (remember, 2,000 pips of loss was TOTAL) in your portfolio. If you want to use more than one system you'd want to decrease the filter even further.

Next, I recommend looking at a very important trading variable called Risk Adjusted Return (RAR). Risk adjusted return will tell you how well a system has shown to recover from losses and is calculated by taking the return (pips) divided by the maximum drawdown (pips). As Jeremy mentioned above, RAR values greater than 1.5 typically correlate to systems who reach new highs on a fairly regular basis.

To hammer home why RAR is so important, think about the following: Which system would you prefer; one that makes 1000 pips a month with 250 pips of drawdown or one that makes 2000 pips a month with 1000 pips of drawdown? For most people it would be the first. When comparing the risk/reward ratio or RAR although you don't gain as much each month, your potential losses are much lower compared to your returns. This is one factor that most new traders don't consider. EVERYONE wants to make the most pips possible but you have to be wise about which systems you pick.

So in conclusion, with the example we've been using I would probably filter systems with an RAR greater than 1.5.

Lastly, it also makes sense to give some thought to the following two variables, # Trades and Maximum Positions. # Trades can be critical as the more trades a system places the margin of error for all of the other trading data will be reduced. More trades typically means the system has been tested to a larger degree than other systems who have placed fewer trades. You also want to consider the maximum positions that your system/portfolio trades. The more positions that are open or could be open, the more your potential gains as well as losses will be magnified.

*It's important to note that the maximum number of positions is factored into the Max DD value, but for gauging potential risk, considering the Max Positions makes a great deal of sense.

Well, this is a lot of information and hopefully not more than you can swallow in one sitting. Please read over my post carefully and let me know if you have any follow up questions. Have fun and good luck.

All the best,

Gavin Minnis

Im looking to put in about 10k to start. Im not looking to shoot the moon here and just want consistent growth. Frankly anything beats 1% at the bank am I right ? Do you think a basket of systems is better or just find one really good one ?

__________________
http://www.calmutual.com/

Bernie,

Starting with one system is often the easiest way to get started. In most cases this is what I recommend to a newer client like yourself because it keeps your focus specific.

Overtime, finding a number of systems that compliment each other and help in diversifying your risk might make sense. But don't feel obligated to jump head first into something you're not familiar with.

You can always add systems later (with the click of a button). Unfortunately, there is no button that you can click to automatically recoup losses. Another thing to consider, the more systems you add the more total positions you could have open at any one time. This increases your leverage or exposure (thus your risk).

As a newbie, start off slow. Find one system that looks promising for you and run with it. Also, there are a lot of really profitable systems offered on the Forex System Selector platform. It doesn't always take more than one system to meet your goals or expectations.

All the best,
Gavin Minnis

I have a question: For a specific system, if it has low RAR, high Win%, does it mean this system had lots of small wins, and a few large draw downs?

For example, if a system has RAR = 1, Win% = 90%, does it mean this system accumulated many small positve pips, but a few large losses brought back the Reward/Loss ratio to 1 ?

Clyde, those are good questions.

Yes, that is typically what you will find on systems with high win percentages. These systems will chip off small gains several times in a row. Then, when they have a loss, it tends to be a rather deep loss. Then, if the market conditions are such that the system can no longer maintain a 90% win ratio, the drawdowns begin to mount.

In these instances, the RAR could be a little mis leading. Since RAR is a function of net pips divided by drawdowns, if you don't have a lot of history to look at, then the RAR may appear to hold up. If the system has been around say, 9 months at least and if the RAR is near 1.0 after a recent loss, then it would be worth of consideration.

On the other hand, if the system has just rattled off 10 wins in a row and the RAR is just 1.0, then when it sustains its next large loss the RAR may drop back towards zero.

__________________
Enroll in our online FX Power Course today and get personalized instruction from our team of expert traders 24 hours a day. We have taught over 25,000 students and in just eight lessons, we will teach you the fundamentals of Forex trading. Click here to get more information

*Past performance posted by Signal and Systems Providers (“Providers”), is not necessarily indicative of future results. No representation is made that any account is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particularly trading program. The composite monthly results are primarily hypothetical results of the master demo and its representation of the Providers, though performance results displayed may represent a combination of live and hypothetical results and are not exclusive to either. There are numerous other factors related to markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. In the event that specific trades were simultaneously executed in hypothetical and live, real-time trading, the lesser of the two results will be displayed. There is no guarantee that one applying these methodologies would have the same results as the hypothetically posted. Since trading successfully depends on many elements including but not limited to a trading methodology and a trader's own psychology, the web site does not make any representation whatsoever that the above mentioned trading systems might be or are suitable or that they would be profitable for you. Please realize the risk with any investment and consult investment professionals before proceeding. The trading systems herein described have been developed for sophisticated traders who fully understand the nature and the scope of the risks that are associated with trading. Should you decide to trade any or all of these systems' signals, it is your decision.

Links to third-party sites are provided for your convenience and for informational purposes only. Forex Capital Markets LLC bears no responsibility for the accuracy, content, or any other matter related to the external site or for that of subsequent links, and accepts no liability whatsoever for any loss or damage arising from the use of this or any other content. Such sites are not within our control and may not follow the same privacy, security, or accessibility standards as ours. Please read the linked websites' terms and conditions.

Hello, please is it possible for your funds to be in FSS and when u wish trade with it at thesame time?

This means we have to be cautious to select newly-designed system which has a couple of months history only, even if it has high Win%

I have another question:
Under account history, we see total "Profit", either positive or negative.
Under position tab, we see "Total Balance".

I am not sure if the following equation is right:

Total Balance = Initial Deposit + Profit

If this understanding is right, what I see in my account doesn't hold with this equation. I am afraid I won't be able to get what being earned in the account history.

Hello Lawan.

It is possible that you can place manual trades in your FSS account. However, the down side is that you would still pay the $1 commission (per 10k position) because the trade would occur in your FSS account. Many clients will have multiple accounts. They will have a live FSS account and a live 10k standard/micro account. That way, if they want to trade their own strategy, they can do so in the standard/micro account without paying the commission.

__________________
Enroll in our online FX Power Course today and get personalized instruction from our team of expert traders 24 hours a day. We have taught over 25,000 students and in just eight lessons, we will teach you the fundamentals of Forex trading. Click here to get more information

*Past performance posted by Signal and Systems Providers (“Providers”), is not necessarily indicative of future results. No representation is made that any account is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particularly trading program. The composite monthly results are primarily hypothetical results of the master demo and its representation of the Providers, though performance results displayed may represent a combination of live and hypothetical results and are not exclusive to either. There are numerous other factors related to markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. In the event that specific trades were simultaneously executed in hypothetical and live, real-time trading, the lesser of the two results will be displayed. There is no guarantee that one applying these methodologies would have the same results as the hypothetically posted. Since trading successfully depends on many elements including but not limited to a trading methodology and a trader's own psychology, the web site does not make any representation whatsoever that the above mentioned trading systems might be or are suitable or that they would be profitable for you. Please realize the risk with any investment and consult investment professionals before proceeding. The trading systems herein described have been developed for sophisticated traders who fully understand the nature and the scope of the risks that are associated with trading. Should you decide to trade any or all of these systems' signals, it is your decision.

Links to third-party sites are provided for your convenience and for informational purposes only. Forex Capital Markets LLC bears no responsibility for the accuracy, content, or any other matter related to the external site or for that of subsequent links, and accepts no liability whatsoever for any loss or damage arising from the use of this or any other content. Such sites are not within our control and may not follow the same privacy, security, or accessibility standards as ours. Please read the linked websites' terms and conditions.

The commission and roll over may be the difference.

Total Balance = Intial Deposit + Profit + Rollover - Commission

Also, if you have any open positions with rollover, then that will also be included in the total balance even though the position is still open.

I believe there is a request for future enhancement to make that balance and equity easier to see on the positions tab. That will make it easier to reconcile and understand as well.

__________________
Enroll in our online FX Power Course today and get personalized instruction from our team of expert traders 24 hours a day. We have taught over 25,000 students and in just eight lessons, we will teach you the fundamentals of Forex trading. Click here to get more information

*Past performance posted by Signal and Systems Providers (“Providers”), is not necessarily indicative of future results. No representation is made that any account is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particularly trading program. The composite monthly results are primarily hypothetical results of the master demo and its representation of the Providers, though performance results displayed may represent a combination of live and hypothetical results and are not exclusive to either. There are numerous other factors related to markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. In the event that specific trades were simultaneously executed in hypothetical and live, real-time trading, the lesser of the two results will be displayed. There is no guarantee that one applying these methodologies would have the same results as the hypothetically posted. Since trading successfully depends on many elements including but not limited to a trading methodology and a trader's own psychology, the web site does not make any representation whatsoever that the above mentioned trading systems might be or are suitable or that they would be profitable for you. Please realize the risk with any investment and consult investment professionals before proceeding. The trading systems herein described have been developed for sophisticated traders who fully understand the nature and the scope of the risks that are associated with trading. Should you decide to trade any or all of these systems' signals, it is your decision.

Links to third-party sites are provided for your convenience and for informational purposes only. Forex Capital Markets LLC bears no responsibility for the accuracy, content, or any other matter related to the external site or for that of subsequent links, and accepts no liability whatsoever for any loss or damage arising from the use of this or any other content. Such sites are not within our control and may not follow the same privacy, security, or accessibility standards as ours. Please read the linked websites' terms and conditions.

Well Eventhough there are 4 systems selected its not sure that those systems place the trade regularly,which leaves us with no idea what is happening on our account.
The same applies for Live accounts as well, even If we have some systems selected based on their performance, what is the guarantee that these systems will place trades regularly and within the margin available and not eradicate our accounts?