Archives for posts with tag: forex strategies

The dollar plummeted against most major currencies on Wednesday after the Federal Reserve said it was making no changes to its USD85 billion monthly bond-buying program.

GBPUSD today is close to an 8-month high, after soaring more than 1.5% over the last 10 days. This poses a problem for Forex Software Traders, who depend on the small market fluctations in stable currencies for profits. Especially for Robots that use the Martingale (doubling) system, these uncertain times could spell disaster.

My personal view is that danger is looming; diversify your portfolio into safer investments, and possibly into Gold/Silver, Bitcoin, or Chinese Yuan (RMB). My best advise is to do your own research into these opportunities and examine if they fit your overall Investment Strategy, based on your Risk Preference.

Source: StarfishFX Daily Analysis http://starfishfx.com/en/resource-center/trader-resources/
Source: Forex – GBP/USD holds gains, near 8-month highs http://www.investing.com/news/forex-news/forex—gbp-usd-holds-gains,-near-8-month-highs-252850
Source: Gold Traders Split on Two-Year Anniversary of Peak: Commodities http://sgx-news.blogspot.in/2013/09/gold-traders-split-on-two-year.html
Source: Bitcoin Boom: Is This the New Safe Haven? http://www.youtube.com/watch?v=CdVVECKKSXo

My current settings of 0.08 intial lots for each US$20,000 account generate about 6% a month.

However, in light of the Economic Instability due to recent World Events, I will be further reducing the risk settings on my Leo Automated Forex Trading Robots. I have since today, reduced it to 0.05 and hope to generate about 3-4% returns a month.

As tension continues to escalate in the Middle East, I may consider turning off my Robot completely. Let’s all pray for the best.

Source: Youtube – When Will The Economy Collapse? http://www.youtube.com/watch?v=0tsUZinrCo8
Source: Youtube – World War 3 Has Already Begun http://www.youtube.com/watch?v=8ZK5gRLJ9h0

After some 9 months of using the Leo EA since Nov 2012, I’m very delighted to share that I have finally got myself out of the Red and in the Black!

Ever since I began my Forex Trading journey with the Leo Automated Trading Software, I must admit that it hasn’t been all smooth sailing. Barely 2 months into trading in January 2013, I lost about 60% of my capital because of Overtrading.

Since then, a few things have changed that have helped me in my Forex Trading journey.

With the newest version of the Leo Forex Robot, my profits have increased and my risks lowered by at least two fold. The Robot is able to achieve about 5-10% monthly returns, with a drawdown of only 10% (about HALF of the industry average!).  This newest version of the Leo Forex Trading Software has been pivotal to my quick recovery, which otherwise would have taken at least 6 more months!

I am sincerely grateful to Edward Khoo, the brains behind the Leo Forex Automated Trading Software, for his efforts to constantly improve the trading software, and of course for this wonderful opportunity! Thank you!

 

Click here to sign up for our FREE Leo EA Introduction Workshop and learn how to trade Forex with NO EFFORT at all!

Now it’s time for some action; let’s take a look at some trades! 

For all three backtest reports, an initial deposit of $10,000 is used.

In this first Strategy Tester Report, we ran the backtest during a Medium Risk market condition, and tested the Leo Forex Robot to the maximum limit. Instead of the recommended 0.05 initial lot settings, we used 0.4. See the results for yourself below!

Super Leo EA v308 Strategy Tester Report - STRESS TEST

Super Leo EA v3.08 Strategy Tester Report – STRESS TEST

With just a $10,000 deposit, the Forex Automated Software yielded a whopping $16,800 in just 2 months!

Initial lot size 0.4
Profit per month 84%
Win trades 77.71%

DISCLAIMER: The above HIGH RISK settings were used purely for TESTING purposes, and should NOT be used for your personal trading! The recommended initial lot size for a US$10,000 account is 0.05.

 

Click here to sign up for our FREE Leo EA Introduction Workshop and SEE it for YOURSELF!

In this second Strategy Tester Report, we’ll be running the Leo EA through a period of High Risk market conditions; the 2008 Financial Crisis. During the worst month of this crisis, GBPUSD slid about 2000pips, the largest swing in its history. We used a conservative setting of 0.02 initial lots.

Super Leo EA v308 Strategy Tester Report - Financial Crisis

Super Leo EA v3.08 Strategy Tester Report – Financial Crisis

Ignoring the huge jump at the end of the period, these settings gave us about $3,000 returns over a period of 17 months, giving us an annual return of about 22%! The Leo EA makes money for you even during times of major crisis!

Initial lot size 0.02
Profit per month 1.8% (5.47%)
Win trades 77.88%

 

In the third and last Strategy Tester Report I will be sharing with you today, we’ll be running the Leo Robot through a period of Medium/Low risk market conditions and using recommended settings of initial lot size 0.05 for $10,000.

Super Leo EA v308 Strategy Tester Report

Super Leo EA v3.08 Strategy Tester Report

As you can see for yourself, the Leo Forex Trading Software managed to give us a Net Profit of $2,584.58 over a short period of 2 months. That’s an average of 12.92% per month, at only a 15.23% drawdown!

Initial lot size 0.05
Profit per month 12.92%
Win trades 68.9%

Click here to sign up for our FREE Leo EA Introduction Workshop and GROW your FORTUNE today!

With that, I’d like to end off this post with…

Oh yeah, I'm IN THE BLACK!

As a Beginner to Forex trading, one will be probably be asking, where should I start?

Trading strategies in the Forex market are as numerous as the traders themselves. Beginners who enter the market have many perceptions of their own about how trading should be conducted. Although this is the case, every beginner develops his own style of market evaluation and trading strategies in the profitable Forex market.

A planned entry into the world of currency trading is the best approach as opposed to ‘winging it’ and trading impulsively. Planning your trading can be done effectively with the help of technical analysis and fundamental analysis. Although some traders favor one approach over the other they are both useful for traders as they show different aspects of the same Forex market. So, the best choice for a beginner would be to combine both these methods of analysis and plan their trading.

Another way to formulate a good plan is by taking the support and resistance levels shown in the technical analysis charts. The support level signifies the bottom of the market and the resistance level signifies the high price for the currency pair past which traders rarely venture to speculate. A trader knows that in general, if a currency pair breaks one or the other of these levels it usually continues in the same direction and thus the trader can plan his trading accordingly.

Another trading strategy that is commonly favored is the Simple Moving Average (SMA). Here, what is considered is the average price during a given period reached by a currency pair which eliminates fluctuations from the equation presenting a clearer picture of the currency price movements. Again, the general tendency is towards holding the pattern shown for rising or falling currency pairs.

As a Novice embarking on your Forex journey, keep in mind to evaluate the market using a combination of different strategies that work for you. With a bit of time and experience it will become easier to make a successful plan for trading currency.

One parameter we should always look out for when choosing a Robot to trade Forex is its Drawdown. The Leo EA is no exception. A common argument that surfaced against Leo’s trading method is that it tends to generate small wins, but could stand to have big losses!

This is because it has a take-profit level of 35 pips, while it can sometimes have a drawdown of 500 pips or more. Below, I will show you two different strategy tester reports using the Leo EA, with different initial_lot sizes, on two very important time periods.

For those of you unfamiliar with the Leo EA’s settings, initial_lot = min_lot, which determines the size of the first lot placed by EA, and hence your risk-reward ratio.

For example, through backtesting of the Leo EA in the period of the ’08 Sub-prime crisis with conservative settings showed a monthly return of 2.21%, and a maximum drawdown of 22.18%.

Leo EA Strategy Tester Report - '08 Subprime Crisis

2/1/08 – 4/2/09, 2.21% ROI, 22.18% max drawdown. Leo EA by LS Capital Singapore.

On the other hand, in comparatively peace time (but also under very volatile conditions on 4/1/13 where GBPUSD market slid 300-400 pips), the EA can also generate 4.09% in one month with a maximum drawdown of only 6.43%.

Leo EA Strategy Tester Report - Jan 2013

2/1/13 – 31/1/13, 4.09% ROI, 6.43% drawdown. Leo EA by LS Capital Singapore.

As you can see from above, an initial_lot of 0.02 can generate about 2% a month, while increasing it to 0.1 can generate about 5%. Depending on your own risk appetite, you can be in full control of your Leo EA to generate consistent profits of 2% a month AND UP!

I have been running some of my own backtests, and am thoroughly excited to have found settings that generate 5% a month, with drawdowns of only 4%-9%! I will be running more backtests over the next 4 weeks, and hope to optimize my current settings with the Leo EA.

If you would like to get a closer look at the above reports, visit LS Capital’s Website under the ‘EA/Script’ section. And you can check out my LIVE trades here, powered by MT4i.

Good luck trading!

Slippage is the bane of any trader’s existence. According to Investopedia, Slippage often occurs during periods of high volatility; resulting in a difference between the expected price of a trade, and the price the trade actually executes at.

The Leo EA uses an averaging method of placing positions at increasing weight, so that the buy line moving average will drop & all positions can close for a profit if the market turns up just slightly (and vice versa for short positions).

The robot automatically closes all positions when they average out to a 35pips profit, and doesn’t pose much of a problem if the total lots I’m holding is less than 1 lot, and each position is small (less than 0.1 lot).

Image

But when my total lot size goes over 1 lot, the new positions placed are exponentially larger. Any small fluctuation in prices when the EA reaches take profit level of 35pips (as you can see below), could end up in a 100-500pips loss.

Image

On the 11th & 12th of Feb 2013, 3 of my 5 accounts faced the problem of closing at losses due to volatile market conditions, losing between 2.8% to 4% within 1 day! I was very concerned and after speaking to Edward, found out that many other clients had the same problem, even on other brokers.

Then just 10 days later on the 21st of Feb 2013, 4 accounts dropped 1.5% to 2.3%, while the last 1 account made 3% due to the volatile market conditions during basket closing of positions (see below).

ImageThis is very unfortunate & I am concerned about the increasing frequency of volatile marketing conditions leading to loss, especially with this method of Auto trading.

Although it does not happen often, I am losing my confidence in the ability of the EA to generate consistent profits, for the sole reason that slippages like this can cause an extremely unfavourable and unpredictable loss anywhere from 1% up to 5% of my investment (or even more who knows!).

Just off the top of my mind, could there be a way to overcome this by increasing the current take profit from 35 pips? I would imagine this will in turn increase the risk factor, which would then have to be counter balanced by something else… such as trading on a higher time frame like M15 or M30 instead of the current M5 chart?

Feel free to leave your comments and thoughts on this!

%d bloggers like this: