The EA works as a grid trading system and it’s not a hedging trading system.
A grid trading system works best at a ranging market. This kind of trading style does not like a trending market.

Note:
The Grid Specialist EA is available now and you get an additional license special for the EA.
So you can run it in a separate account if you want.

Grid Specialist EA

Grid Specialist is an aggressive grid trading, you need a sufficient margin to sustain the temporary drawdown.
We test the Grid Speciliast EA at 5 different currency pairs: CHFJPY, EURAUD, EURCHF, EURUSD, USDJPY.
The EA has been increasing our account from $10,000 to 29,773 in 6 months.

Our current Forward test Report:

For Detail Statement from April 2009 to June 2009 with the account start at $13,410: CLICK HERE

For Detail Statement from May 2009 to November 2009 with the account start at $18,341: CLICK HERE

The cut losses above because we run EURAUD and CHFJPY (these currency pairs has been proven not to be a suitable currency pair).

Current Setting:

Start Equity: $13,000 at IBFX
Risk Setting: Aggressive (Risk:5 with Equity Protection set to 25%)

Our Current Forward Test:

Best Currency Pairs to Trade

CLICK HERE to DOWNLOAD The Best Currency Pair Analysis from our forward test.

Based on on our forward test and our analysis data from June 2009 – November 2009 above, the best currency pairs are:

1. USDJPY
2. EURUSD
3. EURCHF

These 3 currency pairs has been proven to make a continuous profit with maintain the drawdown below 10%.

After you installed Forex Bling correctly and you do not have the trades like our results below:
See the reasons at the bottom of this page.

Based on our Test Results, some brokers produced better performance than the others.
And it’s understandable, because every broker has different spreads, slippage and volatility price.

Note:

1. We will add some important comment for every brokers at our member area (inside Forex Bling Broker Checks section).
2. For broker with minimum lot-size is 0.01 (micro lot-size); we open a demo account using $2,500.
   For broker with minimum lot-size is 0.1 (mini lot-size); we open a demo account using $25,000.
3. Next month we add NEW Thunderstorm EA & Evolution-2 EA to the basket, it will improve the performance even better.

Forex Bling Broker Test Results so far:

1. ALPARI UK: http://www.forexhope.com/mt4/report/Bling-AlpariUK.htm

2. ActiveTrades: http://www.forexhope.com/mt4/report/Bling-ActivTrades.htm

3. Best Direct: http://www.forexhope.com/mt4/report/Bling-BestDirect.htm

4. Collective FX: http://www.forexhope.com/mt4/report/Bling-CollectiveFX.htm

5. FastBrokers FX: http://www.forexhope.com/mt4/report/Bling-FastFX.htm

6. FOREX.Com (Gain Capital): http://www.forexhope.com/mt4/report/Bling-Forex-com.htm

7. Forex Meta: http://www.forexhope.com/mt4/report/Bling-ForexMeta.htm

8. Forex Metal: http://www.forexhope.com/mt4/report/Bling-ForexMetal.htm

9. Forex Place: http://www.forexhope.com/mt4/report/Bling-ForexPlace.htm

10. FXCBS (Fienex Group): http://www.forexhope.com/mt4/report/Bling-Fxcbs.htm

11. FXCM UK: http://www.forexhope.com/mt4/report/Bling-FXCM.htm

12. FXDD: http://www.forexhope.com/mt4/report/Bling-FXDD.htm

13. FX Open: http://www.forexhope.com/mt4/report/Bling-FXOpen.htm

14. FX Pro: http://www.forexhope.com/mt4/report/Bling-FXPro.htm

15. FX Solution: http://www.forexhope.com/mt4/report/Bling-FXSolution.htm

16. Gallant FX: http://www.forexhope.com/mt4/report/Bling-FXGallant.htm

17. Go Market: http://www.forexhope.com/mt4/report/Bling-GoTrader.htm

18. IAM FX: http://www.forexhope.com/mt4/report/Bling-IamFX.htm

19. Ikon Turbo (Ikon Asia): http://www.forexhope.com/mt4/report/Bling-IkonTurbo.htm

20. Interbank FX (IBFX): http://www.forexhope.com/mt4/report/Bling-IBFX.htm

21. ITFX: http://www.forexhope.com/mt4/report/Bling-ITFX.htm

22. Jade FX: http://www.forexhope.com/mt4/report/Bling-JadeFX.htm

23. MIG Forex: http://www.forexhope.com/mt4/report/Bling-MIG.htm

24. Prime Forex: http://www.forexhope.com/mt4/report/Bling-PrimeFX.htm

25. STS Finance: http://www.forexhope.com/mt4/report/Bling-STSFinance.htm

26. Tadawul FX: http://www.forexhope.com/mt4/report/Bling-TadawulFX.htm

27. TradeView FX: http://www.forexhope.com/mt4/report/Bling-TradeFX.htm

We have not test these brokers below (because we can’t open a new demo account) :

1. Axis ODL

2. BulbBrokers

3. ODL

If you still do not get any trades:

First thing you need to check: Make sure you already installed Forex Bling correctly.
You can see some information in the screen; with a BIG Broker Trading Hour in YELLOW color.

And if you still do not have any trades after several days, we identify that mostly the problems because:

1. Incorrect ECN_Market_Order Setting.
If your broker is an ECN broker, Set TRUE.
We have listed which one is the ECN broker at our member area under ForexBling-BrokerCheck menu

2. Incorrect Broker_Trading_Hour Setting.
Input the correct your broker Trading Hour compare to the GMT Time.
We have listed the correct trading hour for every broker at our member area under ForexBling-BrokerCheck menu.

3. Incorrect Maximum_Spread_Allowed Setting.
The default settings is 3, but we found that some broker needs you to input bigger: 4 – 6 pips for EURGBP.
You need to look at the screen, when the screen tell you the Broker Spread is 5 (4 digit broker) or 45 (5 digit broker) you need to input: 5

It also prove that the logic is correct and should produce consistent profit.

You can compare our backtested results at the download documents below match our forward test.

However, in the real situation, sometimes we add some adjustment in the settings that locate at our servers.

Your Forex Bling EA always download our latest adjustment.

In the next version, we try to create a version that you can backtest too.

It can simulate what we do at our servers.

The backtested results here was produced by:

• Evolution Version 2 – NEW (Evolution-2 will be released 1st week of October 2009).
• Fractals-4 (909).
• Thunderbolt (909D).
• Thunderstorm (909) – NEW (Thunderstorm-909 will be released 1st week of October 2009).

You can download the complete transactions from our backtested results HERE.

Note:

1. Freedom EA still a little difficult to show in backtested results because the logic behind Freedom EA calculates the currency strength value.
   It needs data from all currency pairs to produce the currency strength value.
2. We backtest our expert advisors using risk setting BIGGER than our recommendation. The important thing to see in the backtested results below is the maximal drawdown. Do not panic after 2 – 3 stop losses, unless you use the Risk Settings too big.

First, we backtest using 2 years data (2008-2009); and then using 5 years data (2004-2009) at the bottom:

The 2 Years Backtested Report:

EVOLUTION EA ~ Version 2

EVOLUTION EA trade using the Breakout trading system at US market. The Version 2 will replace current version.

The EA trades at EURUSD using H1 chart.

This is the 2 years backtested result for EURUSD:

Risk Setting=3

(click the picture below to enlarge it).

For the complete transactions from our backtest results: CLICK HERE.

THUNDERBOLT EA

Thunderbolt EA using a Scalping trading system.

The EA trades at EURUSD (1st choice) & GBPUSD (2nd choice) using M15 chart.

This is the 2 years backtested result for EURUSD:

Risk Setting=10

(click the picture below to enlarge it).

For the complete transactions from our backtest results: CLICK HERE.

THUNDERSTORM EA

Thunderstorm EA using a Scalping trading system.

The EA trades at EURGBP (1st choice) & EURCHF (2nd choice) using M15 chart.

This is the 2 years backtested result for EURGBP:

Risk Setting=10

(click the picture below to enlarge it).

For the complete transactions from our backtest results: CLICK HERE.

This is the 2 years backtested result for EURCHF:

Risk Setting=10

(click the picture below to enlarge it).

For the complete transactions from our backtest results: CLICK HERE.

FRACTALS-WIZARD 4

Fractals-4 EA trades at the following currency pairs: EURUSD, USDGBP and EURGBP using H4 chart.

This is the 2 years backtested result for EURUSD:

Risk=1 and Aggressive Setting=10

(click the picture below to enlarge it).

This is the 2 years backtest resulted for GBPUSD:

Risk=1 and Aggressive Setting=10

(click the picture below to enlarge it).

This is the 2 years backtested result for EURGBP:

Risk=1 and Aggressive Setting=10

(click the picture below to enlarge it)

The 5 Years Backtested Report

I will post more backtested results from various settings, currency pairs for each trading system inside Forex Bling.

Evolution-2

This is the 5 years backtested result for EURUSD:

Risk Setting=3

(click the picture below to enlarge it).

Thunderbolt-909D

The backtesting data for 5 years (using Risk=10) produced too exponential profit return.

Even using Risk=5, the maximum lot-size (100) already reached after 3 years.

So in the backtested results below, after 2006  until 2009 the EA traded using the same lot-size (100 lot-size).

This prove the EA produced consistent results for the past 5 years.

This is the 5 years backtested result for EURUSD:

Risk Setting=5

(click the picture below to enlarge it).

FRACTALS-WIZARD 4

This is the 5 years backtested result for EURUSD:

Risk Setting=1 and Agressive Setting=10

(click the picture to enlarge it).

We have been working almost a year in Forex Bling program.
And for the past 5 months, we show our forward performances which made every month.

I finally got the time to write some description about our Forex Bling program.

Please download our Exclusive Report with Complete Trading Record for each of the trading system inside Forex Bling program.

Download Forex Bling Exclusive Report.

Click at the Report picture and save the Pdf file into your computer.

We also have Forex Bling interview and some new tutorial videos.

Thank’s to Mr. Bruce Muir from Expertadvisorfx.com who conduct the Interview.

I hope you like the interview video above….

We release our Fractals Wizard ver 4.0 (Fractals-4) this week.

Click here for previous transactions (Fractals-3).

Version 4.0 is a major upgrade for our Fractals Wizard expert advisor.
The profit factor and drawdown level for version 4.0 are better than version 3.0.

These are additional features available at version 4.0:
1. A combined system between breakout trading system and scalping technique.
2. New facility to disable the EA during big news like NFP report.
3. Additional aggressive trade and maximum open positions settings.

Fractals-4 EA now trades at the following currency pairs: EURUSD, USDGBP and EURGBP using 4H chart.

This is Fractals-4 backtest result for EURUSD:

(click the picture to enlarge it).

This is Fractals-4 backtest result for GBPUSD:

(click the picture to enlarge it).

This is Fractals-4 backtest result for EURGBP:

(click the picture to enlarge it).

I know everyone wants to see how an Fractals-4 expert advisor can handle live trading in these unpredictable markets. After spent hundreds hours in redesign, programming and backtesting, we are so confident of new version 4.0 performance.

Fractals Wizard ver 4.0 live test results below:

If you want to get trial version of our Fractals-4 EA, please subscribe to our mailing list.
We will send the trial EA next week.

I will post more backtest results from various settings (at this page below):

4 years backtest result for EURUSD:

(click the picture to enlarge it).

What you need to do in the USA (for NFA brokers) as of July 31, 2009:
* Can’t have hedging positions, it means OCO orders ( One cancels the other)
* FIFO (first in first out) system: order that opened first must be closed first.
* Can’t have stop and profit target for order with the same lot-size.

Some broker like FXCM, and Forex.com move to their UK divisions. I myself prefer Alpari UK.

Anyway, I also working with new approach for our Vision trading system (VISION PRO).

The new Vision trading system will enable you to trade in NFA brokers even with those limitation above.
1. Vision do not hedge its positions. (I do not use USDCHF to hedge EURUSD).
2. You can limit open positions to only 3 – 10 positions only (and each position can have different lot-size).
3. Enable to close all positions using first in first out procedure.

I also add equity protection (stoploss control) to prevent further drawdown.
You can set from 5% to 30% drawdown before the system cutloss the open positions.

Click these pictures below to enlarge it.

This is our backtest result from 2006-2009:

At the result above, I backtest using EURUSD (30 minutes chart), with these settings:
1. Risk Setting=10
2. Maximum Positions=20
3. Profit Protection: Not set (not limited)
4. Drawdown Protection: 30% equity cutloss

The result our Vision can generate profit $189,367 from $10,000 deposit.

Then I backtested with more conservative approach:

I backtest using EURUSD (30 minutes chart), with these settings:
1. Risk Setting=10
2. Maximum Positions=10
3. Profit Protection: Set to 10% above balance
4. Drawdown Protection: 5% equity cutloss

The second result produce less return but more reliable to achieve. The new Vision now produce 48,489 profit on $10,000 deposit using cutloss every 5% drawdown.

I will post more backtest results later at this page…. please come back again next week…..
I really excited with these results. Now our development process is finish, we start our forward test phase.

As soon as I check everything is correct, I will send the EA for you to test it too.

Make Big Money Fast in Forex is Possible…

And You Can Do It, too!

Like you, I have been searching the world for trying to find the ‘holy grail’ of forex trading.

I started using other people trading systems, I bought a lot of trading systems in the market and I traded day and night followed other people trading signals. For many years, I never found a trading system that could be profitable in a long term.

So I decided to create my own trading systems.

My trading systems are a direct outcome from years of learning other people methods and tried it all.

… From learning other people concepts then perfecting them…

I can take my trading methods to the next level.

It produces profit more than 50% in a month.

This is one of many testimonials I received from forex review expert:

Being a Independent Expert Advisor Reviewer, I naturally will have reservations before

saying anything positive about anything or anyone. However, this man has impressed me

with his humility, knowledge, expertise and professionalism from the minute we met.”

CK-ckowyong.com

I know there are many ways to trade forex markets.

Some using technical analysis, other using fundamental analysis.

I prefer to convert the technical analysis into a mechanical trading.

After years of trial and error, I put a team to create several auto-trading robots (expert advisors) that I personally use.

My team combined from forex specialists, mathematicians and programmers who have developed an innovative intelligent robot which automatically analyzes currency markets and determines when the best time to buy or sell.

And the best part of my expert advisors: they have a high expectations of making a profit, with good money management to balance between risk and reward.

These forex robots simply churn out money day after day. They are using internally programmed numerous different technical indicators to seize the moment and greatly increase your odds for a profitable outcome.

My expert advisors take technical forex trading to a whole new level!

How does our trading systems actually work?

My target is to have 80%-120% profit per annum while maintain minimal risk.

I do not make aggressive trades which could ruin our capital.

Most of my expert advisors are set to 1%-3% risk per trade at the beginning.

To distribute/spread the risk and to anticipate the forex market that changes all the time, I combined our basket into several trading strategies:

A breakout system, market timing, grid trading and scalping technique.

Together they generate a trading system for short term profit and long term gain.

Of course you can use one trading system only or all trading systems – you can use scalping technique only or trade using breakout, grid or scalping technique.

This maximizes your profits and minimizes your risk.

For example, if you want to trade with $1000 – you can divide it and trade $250 using breakout, $250 using market timing, $250 using grid trading and $250 using scalping technique.

That’s simple.

Alternatively, you can adjust our strategies to fit your needs!

Most of our trading systems trade major currency pairs, using all of them maximize your profits.

All came with 100% mechanically! No need to analyze the market anymore.

Remember – No More Thinking – just earning money with simple clicks!

Click here for month by month live performance using Risk=1% calculation.

Can you imagine the results using bigger risk percentage ?

Our basket of trading systems (each came with pro and cons, but together they produce very consistent profit) :

1. Breakout Strategy:

PRO:     Breakout and trending market
CONS:  Choppy market
* Fractals-3 * Freedom EA

2. Market Timing:

3. Scalping Technique:

PRO:     Sideways market
CONS:  Volatile market
* Thunderwind  * Thunderbolt  *Thunderbird  *Thunderstorm

4. Grid Trading:

PRO:     Ranging market
CONS:  Trending market
* Grid Specialist

To get detail live statement for each trading system: click the correspondent box.

1. Evolution Trading System

Evolution Trading System is forex trading strategy based on market timing and pivot point.

Risk Setting: Very Conservative (Risk: 1% per trade)

NOTE: Evolution is replaced with EVOLUTION-2 (New Version).

NOTE: Evolution is replaced with EVOLUTION-2 (New Version).

2. Fractals Wizard EA

Fractals EA is an expert advisor that works using breakout trading strategy.

Risk Setting: Conservative Moderate (Risk: 2% per trade)

For Detail Statement before June 2009 with the account start at $25,000: CLICK HERE

New FRACTALS WIZARD 4

Start Equity: $10,000 at ALPARI
Risk Setting: Conservative  (Risk: 1% per trade)

3. Freedom EA

Freedom EA is an expert advisor that works using contraction and expansion system.

Risk Setting: Very Conservative (Risk: 1% per trade)

4. Scalping Technique

I create several expert advisors using scalping technique for different market condition.

* Thunderbolt

Thunderbolt is a scalping expert advisor for EURUSD and USDGBP market.

Risk Setting: Moderate Aggressive (Risk: 3% per trade)

Thunderbolt at GBPUSD market:

* Thunderbird

Thunderbird is another variant of scalping technique for EURUSD, USDCHF and USDJPY.

Risk Setting: Conservative (Risk: 2% per trade)

* Thunderstorm

Thunderstorm is another variant of scalping technique for EURCHF and EURGBP.

* Thunderwind

Thunderwind is another variant of scalping EA using Asian market for EURGBP.

Thunderwind EA on EUR/USD:

5. Grid Trading

* Grid Specialist

Start Equity: $13,000 at IBFX

Risk Setting: Aggressive (Risk: 5% per trade)

For Detail Statement before June 2009 with the account start at $13,000: CLICK HERE

My suggestion is simple.

Try my trading systems and decide for yourself if it works for you.

* Capable of seeing profit into the future (2-3 months from now) with uncanny daily accuracy.

* Will increase your capital by 100%-200% in a year.

* Easy to install and 100% mechanically.

* Undetectable by any forex broker.

If you are interested to know more about our trading systems above:

Fill your name and email address in our mailing list below.
We will send you the information how to get our trading systems and some important update.

I do not add our Hedging/Correlation techniques like PB or Vision into our basket because they need a sufficient margin to sustain temporary drawdown when the EA repair its positions.

1. PointBreak & DTS1 System
2. Vision EA

PRO: Trending market
CONS: Sideways/Volatile market

For PointBreak and Vision review, please visit:

PointBreak trading report and
Vision trading report.

Vision hedging, correlations and pyramiding as part of its trading strategy. I will discuss those strategies in brief before go to Vision main strategy. Compare to my Pointbreak trading system which uses one pair as hedging system (long against short), Vision uses correlation as its hedging strategy.

For many people Hedging and correlation are bandied about as if they are in effect the same thing. This is not the case, and it is unwise to equate one with the other, especially in the forex world.

Hedging

Hedging is a strategy designed to minimize exposure to an unwanted financial risk, while still allowing the assets involved to profit from their investment activity. The best way to understand hedging is to think of it as insurance. When people decide to hedge, they are insuring themselves against a negative event. This doesn’t prevent a negative event from happening, but if it does happen and you’re properly hedged, the impact of the event is reduced. So, hedging occurs almost everywhere, and we see it everyday. For example, if you buy house insurance, you are hedging yourself against fires, break-ins or other unforeseen disasters.

Portfolio managers, individual investors and corporations use hedging techniques to reduce their exposure to various risks. In financial markets, however, hedging becomes more complicated than simply paying an insurance company a fee every year. Hedging against investment risk means strategically using instruments in the market to offset the risk of any adverse price movements. In other words, investors hedge one investment by making another.

An example of a hedge would be if you owned open a long position, then open a sort position without close the long position stating that you will sell your long at a set price, therefore avoiding market fluctuations. Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk almost to nothing (except for the cost of the hedge).

Correlation

In the world of finance, a statistical measure of how two pairs move in relation to each other. Correlations are used in advanced portfolio management.

Correlation is computed into what is known as the correlation coefficient, which ranges between -1 and +1. Perfect positive correlation (a correlation co-efficient of +1) implies that as one currency pair moves, either up or down, the other pair will move in lockstep, in the same direction. Alternatively, perfect negative correlation means that if one currency pair moves in either direction the pair that is perfectly negatively correlated will move by an equal amount in the opposite direction. If the correlation is 0, the movements of the currency pairs are said to have no correlation; they are completely random.

In real life, perfectly correlated pairs are rare, rather you will find pairs with some degree of correlation.

How Vision use correlation as its ‘hedging’ strategy ?

Vision uses the strong correlation between some currency pairs as its ‘hedging’ strategy. This hedge aims to minimize the risk from moves with the currency pairs used, thus allowing profits to be accrued when the market move to its direction.

Technically, to hedge you would invest in two currency pairs with negative correlations. Of course, nothing in this world is free, so you still have to pay for this type of insurance in one form or another. While the Vision trading methodologies use the principle of hedging to limit the risk of movement in the markets and thus stabilize the overall value of trades you hold, it is does not hedge perfectly.

Correlation pairs

Let us say that we are using just two currency pairs: EUR-USD and USD-CHF. These two currency pairs are made up of three individual currencies: the Euro, the US dollar and the Swiss franc.

By using these two currency pairs we can perfectly hedge against any movement in the one currency that is common to both pairs. In this case it would be the US dollar. We can sell the same amount of US dollars in EUR-USD as we buy in USD-CHF. We have thus shielded ourselves from all movements that directly affect the US dollar.

That leaves two currencies remaining: the euro and the Swiss franc. These currencies have been chosen because of their close ties and similarities. They generally respond in the same way to factors that affect their sphere of influence. Switzerland is obviously based in continental Europe, which means that events in the European Union (which uses the euro currency) affect the financial markets in Switzerland due to the close ties that Switzerland has to the countries that make up the EU. Conversely, events that take place in Switzerland will impact the financial markets of the EU, again due to the close ties that are in place due to business and financial matters.

What history shows us is that the euro and Swiss franc will closely mirror each other. If the euro gets stronger than the Swiss franc will get stronger by about the same amount. If the euro gets weaker then the Swiss franc will weaken also. The amount to which these two currencies mirror each other’s movements can be determined by calculating the correlation between them.

In probability theory and statistics, correlation, also called correlation coefficient, indicates the strength and direction of a linear relationship between two random variables. In our case, the two variables are the euro and Swiss franc currencies.

History shows that the correlation between the euro and Swiss franc is generally 0.9 or higher. A value of 1 indicates a perfect correlation. A value of 0.9 tells us that the currencies mirror each other very closely, but not perfectly.

There are several web resources that you can use to keep up to date with the current correlation between these and other currencies.

My first recommendation is to use the FXCorrelations tool that is part of Oanda’s FXLabs.

I prefer to use the table view, which lists actual correlation numbers, rather than the default heatmap view. Oanda updates the correlation values daily.

Another interesting resource is a monthly commentary on forex correlations that can be found on the dailyfx.com website.

To get forex correlations over the past 5, 20 or 100 days, you can analyse the data provided by Swiss broker RealtimeForex here.

The Imperfect Hedge

After digesting the above information you are probably wondering how much risk does the lack of perfect correlation between the euro and Swiss franc place us in. Asking such a question has its basis in the certainty that the underlying pairs, no matter how well correlated, will eventually move against you.

As I stated previously, the use of two currency pairs does not result in a perfect hedge. Therefore it is important to heed this possibility and protect ourselves against it.

No matter what trading system you use it is imperative that you protect your trading capital at all costs.

More specifically, with either of the FreedomRocks or ForexForSmarties trading systems you do not want to ever have to put yourself in the position where you might experience a margin call. You must not over gear yourself so that an unexpectedly large deterioration in the correlation between the currency pairs puts your capital in jeopardy.

Thus, while there is no perfect hedge when using currency pairs, it is possible to use sensible planning and position allocation to limit our risk if such an event were to unfold. Plan for the worst.

Just as there are currency pairs that include the US dollar and the euro (EUR-USD) and the US dollar and Swiss franc (USD-CHF) there is also a currency pair made up of the euro and Swiss franc (EUR-CHF). The price change in the EUR-CHF pair reflects the imperfect correlation between these two currencies. The correlation between the two currencies ebbs and flows each and every day. Just as economic, political and other world events impact on the EUR-USD exchange rate, so will events impact on the EUR-CHF exchange rate.

Two currency pairs (such as our original EUR-USD and USD-CHF pairs), no matter how well correlated, will tend to trend to some extent. This trend is reflected in the EUR-CHF rate.

Historically the trend between the two will favour the currency with the stronger fundamentals (which includes macro economic factors such as higher interest rate, current account surplus, and so forth). At the moment, there is a higher interest rate available from holding euros compared to holding Swiss francs which is one of the main factors behind the euro’s steady rise against the Swiss franc over the recent past.

If we hold a currency that has stronger fundamentals than one we have sold then we adding to our edge in that the trend will, in the long run, generally be in our favour. This means that the imperfect hedge we are holding will generally act in our favour, rather than against us. Any moves that do go against should be short term corrections taking place against the backdrop of a long term trend that is going to help us.

Market conditions can obviously change (Switzerland or the European Central Bank can update their interest rates) which will have an effect on the underlying strength of the trend of one currency against the other. Thus our edge can be altered. It is important to have a least an understanding of this and to make sure that our edge in this regard does not turn against us.

The basis of the FreedomRocks and ForexForSmarties systems is therefore pretty solid. As long as you are receiving interest, using reasonable margin and following the system the odds are strongly in your favour.

Do Your Homework

No trading system is without risk and that includes FreedomRocks and ForexForSmarties. Make sure that the risk level you are taking on is within your comfort zone.

Keep abreast of the correlations in the currencies that you are trading in, on a monthly if not weekly basis.

Know when the various central banks of the currencies you are trading meet to discuss and potentially change their interest rates.

Be aware of the underlying trend in the cross rate of the currencies you are trading. If you are trading EUR-USD and USD-CHF in FreedomRocks then your cross rate is EUR-CHF. If you have added sterling into the mix then you also need to look at GBP-CHF.

Trading naked

One question that is frequently asked when it comes to trading highly correlated pairs is:

Why not just trade the resulting cross rate naked?

What this question is asking is instead of trading both EUR-USD and USD-CHF why not just trade EUR-CHF directly?

If you look up the interest rate gains to be made by buying some euros against the Swiss franc you’ll find that you would make daily gains. I would even suspect that those daily gains would be close to what you would make in daily interest from holding the hedging pairs of EUR-USD and USD-CHF.

The biggest difference (barring any minor short term discrepancies between the various pairs) is that you only have to pay the spread once if you stick to EUR-CHF.

If all you are doing is just entering a trade on EUR-USD and hedging your US dollar exposure on USD-CHF then you would be better off just trading EUR-CHF. You will not have to pay spread costs on two orders, but just once. You’ll get just about the same daily interest, depending on your broker’s premium rates, and the movement of holding the two trades versus the single one in EUR-CHF will be almost exact. I’m sure there are plenty of arbitrage systems out there that make sure the cross rates match the main currency pairs.

Your exposure from holding a naked trade is going to always just about equal when you hold two hedged positions.

A second area of difference that gets slightly more difficult to really quantify comes from the secondary part of the trading strategy that a program like FreedomRocks offers.

The FreedomRocks system also involves placing additional small trades on the correlated pairs. These additional trades are generally only about 2% the size of your main trade, and look to make profit from the large daily movement of the main pairs. Since the two correlated pairs will move in varying ways throughout the day it is guaranteed that these trades will be hit in a random order resulting in skewed balancing between the correlated trades. Since the placement of these trades is part of the ‘black box’ component of the system it is very hard to tell if their aim is to keep the correlation stable, or to skew it slightly depending on how the markets move.

I would surmise that it would make perfect sense to just trade the EUR-CHF pair as your main trade (and save yourself some spread costs) and then place the small trades in EUR-USD and USD-CHF as an alternate way to trade the FreedomRocks system.

There might be some way to translate the small trades to just on the EUR-CHF but since I’m not privy to exactly how the trade orders are precisely calculated (the main black box area again of FreedomRocks) it’s impossible for me to know the feasibility of that.

The EUR-CHF pair will not move as much on any given day as compared to its correlated pairs (EUR-USD and USD-CHF). While EUR-USD seems to average moves of 70-80 pips a day, the EUR-CHF pair seems to average 30-40 pips. There are obviously days when both pairs will move much less, and other days when they will move double or triple their average.

One of the reasons why the EUR-USD and USD-CHF pairs will move much more is that they are tied to the US dollar, which is still the reserve currency of the world. These are some of the most highly liquid and heavily traded currency pairs in the world. This is why it is not uncommon for these pairs to move a 100 pips or more in a 24 hour period.

What’s Up With Those Small Trades?

If you use the FreedomRocks system you will be following its Portfolio Manager which instructs you to buy small lots of the currencies you hold as price moves up and down. If prices in these currency pairs trend (i.e. move in one direction consistently) then you will find yourself consistently buying lots in one pair and selling lots in the other pair.

Why are you doing this?

While I don’t know the real in-depth reason for this, my guess is that it is to take advantage of the times when the currencies reverse direction as well as when they enter range bound areas. You then end up selling the positions you have previously bought (and likewise buying the positions you had previously sold). You are therefore making profitable trades that capitalize on the large movements that these forex pairs make.

As well as the daily interest gains that result from holding large positions, you also end up profiting from the large daily moves that happen.

If the market never returns to close out the small lot positions that you had initiated at the start of a large trending move, all is not as bad as it seems. Since you would have bought and sold an equivalent amount in your two hedged currencies your hedged position is still in place. I am of course assuming here that the Portfolio Manager aims to keep your hedge in place; this might not be really the case, as it might instead aim to shift the balance depending on how the markets move.

All you need to make sure of is that you are still comfortable with the amount of margin that is being used up by the total number of lots that you now currently hold. If you feel uncomfortable in having so much margin used up you would be well advised to close out all your positions and reallocate your portfolio back to using a level of margin that you are happy with.

No matter what way you look at it the EUR-CHF trend is vitally important to profiting from the FreedomRocks or ForexForSmarties strategies. If the trend holds then peole will make money. If the trend reverses and stays in reverse then bad things will start to happen to people’s accounts if they’re not aware of the situation and manage their trade allocations accordingly.

Given my regular short/medium term way of trading using a median grid in EUR-USD I’m wondering if it makes sense to investigate using the same sort of approach in EUR-CHF. There is a clear trend and holding trades through retracements would at least result in interest payments. The fact that I have to pay interest on positions I hold in EUR-USD is one thing I don’t really like about trading that pair.

Correlations as A Predictor

The final point of interest relating to correlations is the way that Tom Yeomans takes advantages of the correlations between currencies.

He uses the movements in highly correlated pairs to determine where price movements will go in the very short term.

I’ll use EUR-USD and GBP-USD as a simple example of how he does this. EUR-USD and GBP-USD generally have a high correlation. What Tom does is to look at the tick movements in both these currencies to try and determine which currency is the leader and which one is the follower.

On any given day, price movement might tend to occur first in sterling and then be followed by a similar movement in the euro. If you watch the tick movements of the pairs for an hour or two you might be able to pick up which one is the leader that day.

You can then use this knowledge when you are looking to enter or monitor trades. You would only look to enter trades in the lagging currency pair. You look for confirmation of future movement in the leading pair which allows you to make decisions about what to do in the lagging pair.

“Lin, Just want to say that I really appreciate what you are doing with EA’s.
You once again have proven that your EA works! I have tried numerous other EA’s over the last
few months (partly because of the long period of ranging market which wasn’t great for Point Break),
but to be honest, every time I end up coming back to Point Break!!
It is so far the only EA that has proven to work long term in live account!
Others do great for a while, but then they crash! Keep up the good work!
Again, thanks for all the great work!” ~ Tobias

Two years ago I invented the PointBreak trading system and conducted lots of seminars introducing my unique trading strategies in many cities. Until now PointBreak expert advisor has been downloaded more than a thousand times from our website itself, not including our affiliates and partner websites.

Since then I also conducted countless hours of researching, reprogramming, recalculating, back testing and forward testing PointBreak trading system to find new ways to improve the performance. Investigating and analyzing many ways of using different methods has been a very long and thorough process.

• I will try to explain the logic behind Dreambuilder-FX (DTS-1) as simply as possible.
• If you are not familiar with our PointBreak trading system and our unique way of using the pyramiding technique I suggest to read my PointBreak trading strategy first.

Do I make consistent profit using PB5 ?

I meet with hundreds of people every week through our forex seminars and managed funds program. There are additional videos on our website about our forex seminars. Every week I open my personal trading account in front of them, and we have more than a hundred clients in our managed account program (and until today no one has lost money).

DTS EA on Perfect Forex Arbitrage Seminar

Download an example of one of our client’s live reports here.

Brief comparison between DTS-1 and PB5:

The logic behind DTS-1 solves the drawdown problem of PB5 in choppy/sideways and reversal markets. It also reduces the maximum drawdown period of PB5 from 5 months into 2 months (based on Jun 2004 – Aug 2008 data history):

Market Conditions

For simplicity, I categorize the forex market into 3 kinds of market conditions:

• Trending Market (Uptrend and Downtrend).
• Sideways/Choppy Market.
• Trend Reversal.

Usually markets move from one condition to the next: from sideways market to trending market, from trending market to trend reversal, then back to sideways market before continuing to trend again.

The main problem for most traders or trading systems is how to detect correctly:

1. Is the market changing? (e.g. from sideways to trending, or from uptrend to reversal) OR
2. Is the market still continuing the current condition? (e.g. continuing an uptrend or still moving sideways)
3. How long will the current market condition continue?

How do I detect a Trending Market, Sideways Market and Reversal Market on DTS-1?

I use 3 main indicators in PB5 and DTS-1: Simple Moving Average, Keltner Channel and MACD on the Daily chart:

If you have PB5, you can set up your chart like below using the following indicators:

Fast Moving Average (Period=9) – Yellow Color
Slow Moving Average (Period=50) – Aqua color
Keltner Channel (EMA=50, ATR=50) – Grey color.
MACD (12,26,9) – I modify the MT4 original MACD.

You can download all indicators and the template I use below at this link.

Screenshot Metatrader DTSa

I define:

• Sideways market in PB5/DTS-1: when price and both MAs (Slow MA & Fast MA) are inside the Keltner Channel.
• Trending Market in PB5/DTS-1: when price and Fast MA (Yellow MA) are outside the Keltner Channel.

• If Fast MA (Yellow MA) is ABOVE the Keltner Channel: UPTREND Market
• If Fast MA (Yellow MA) is BELOW the Keltner Channel: DOWNTREND Market

• Reversal Market in PB5/DTS-1: when price is starting to enter the Keltner Channel followed by the Fast MA (Yellow MA), especially if there is a divergence on the MACD (Magenta Line) before the reversal begins.

When PB5 is in drawdown condition:

PB5 produces very good performance on trending markets, but produces drawdown when the market is changing from trending market to trend-reversal or enters a sideways market.

The PB5 user needs to be patient when the market is in a sideways direction (e.g. period Apr – Aug 2008, see chart below). The drawdown started on the June cycle and stayed with us until the market started to trend in first week of August when PB5 finally returned to profit.

Sideways Market 2008

The important keys to using PB5 are:

• Do you have enough margin to cover you when PB5 is in the process of solving the drawdown problem ?
• Do you have enough patience to wait the process out? Sometimes the sideways market can continue for several months.
  From my experience, not all PB5 clients have the patience to wait, especially if one uses the risk setting too high.

How can DTS-1 solve the drawdown problem better than PB5 ?

As you know PB5 uses C-cycles for trending markets and uses MSP techniques to solve the drawdown in sideways/choppy markets.
DTS-1 adds 3 cycles (B-cycle, I-cycle and R cycle) in addition to the C-cycle and MSP techniques on PB5.

Sideways market condition:

When DTS-1 detects there is a sideways market, DTS-1 starts 2 additional new cycles:

• Breakthrough Cycle (B-Cycle); and
• Inverted Cycle (I-Cycle).

Reversal market condition:

When DTS-1 detects there is a trend reversal, DTS-1 starts a new additional cycle:

• Reversal Cycle (R-Cycle).

What do those 3 cycles actually do ?

Contrary to the M-cycle on PB5 which works separately from the C-cycle; B-cycle, I-cycle and R-cycle work together to support the C-Cycle.

C-Cycle:

Initially when a C-cycle opens, it will open the trade as below:

On a trending Market the C-cycle will become:

C-Cycle in Point Break and Dreambuilder Expert Advisor

In normal conditions the C-cycle will work most of the time. The C-cycle is enough to give us consistent profit, especially in a high volatility market.

What will happen when choppy and sideways markets come ?

B-Cycle, I-Cycle and R-Cycle:

When a sideways/choppy/reversal market comes, B-cycle , I-cycle or R-cycle will be activated.

• B-Cycle will be activated when DTS-1 detects a Breakthrough market is happening.
• I-Cycle will be activated when DTS-1 detects a Choppy market happening.
• R-Cycle will be activated when DTS-1 detects a Reversal market is happening.

Note:
Some define ‘breakthrough’ the same as a breakout market; I define ‘breakthrough’ as a breakout within a sideways area, but not a breakout outside a sideways area.

What they do is replace C-cycle positions, from:

into:

The B-cycle, I-cycle and R-cycle will add and close some positions on the C-cycle, and continue to correct those C-cycle positions until the cycle makes profit.

During Very Choppy market conditions in which the trend is not clear:

In a very choppy market, in which DTS-1 detects several market conditions (e.g. the market is changing all the time from trending into reversal, from reversal into sideways), DTS-1 will open simultaneously combined cycles from C-Cycle and B-Cycle, C-Cycle and I-Cycle, or C-Cycle and R-Cycle, and so on.

It will continue to run on two or more cycles until a clear market trend is established, then DTS-1 will stop unnecessary cycles from running and continue with the rest until the EA closes the cycle with profit.

Sounds easy?

YES… Didn’t I mention above that I will explain as simply as possible ?

But the programming was not so easy!

For every step, the system must maintain and recalculate all positions, calculating every possibility that will happen if market conditions suddenly change.

As you may know, trading systems that are based on averaging, martingale or progressive strategies will cause big drawdowns in trending markets that move against your starting positions. In very strong markets those EAs will blow up the account.

For your information I wrote two thousand lines of code in the PB5 EA; DTS-1 is five times as complex as PB5.
It needs several days to complete a back test for DTS-1 on EUR/USD (4 years data, test on every tick using 90% data modeling).

Now, for those who are confused with all those cycles and don’t understand what I am talking about…
Don’t worry, no more ‘tech talk’…

Now pay attention to the section below…

How good is DTS-1 compared to PB5 ?

Take a look at the latest sideways market in EURUSD 2008 below:

Sideways Market 2008

In 2008: EURUSD went sideways in Jan and Feb, started trending from March to April, then the sideways market began again around April 24 until Aug 05 before continuing to trend in August and September. I know many EAs on the market produced losses in August 2008. Some EAs even blew up when the market suddenly went back to trending again, while PB5 and DTS-1 made profit and took big gains on this trending market.

When you use PB5 (Apr 1-Sep 19, 2008):

The drawdown started on a cycle in May and stayed in drawdown between June and July until the market reverted to trending (when PB5 finally resolved the drawdown) on the first week of Aug 2008.

I ran PB5 using Risk=3 with 2 cycles and 100 pips between the cycles.

PB5 2008 Backtest Result

PB5 produced $2,789 PROFIT from $10,000 (+27,89%). The drawdown in that period was -48%. This is considered the biggest drawdown for the past four years. That’s why I recommend Risk=1 or Risk=2 for initial capital.

The drawdown started on May 16, 2008:

PB5 in Sideways Market 1

and continued in June and July:

PB5 in Sideways Market 2

until PB5 closed the drawdown on Aug 7, 2008:

PB5 in Sideways Market 3

As you see from the charts above, PB5 needed 3 months to resolve the drawdown by taking profit in up and down markets, little by little, bit by bit.

Now we run DTS-1 on the same period (Apr 1-Sep 19, 2008):

I ran DTS-1 using Risk=3 with 4 cycles, 50 pips between cycles and I disabled the watermark calculation.

DTS in Sideways Market 2008

DTS-1 produced $4,721 PROFIT from $10,000 (+47,21%).

From the equity chart above, you can see that there is no serious drawdown during the sideways market, even if I run Risk=3. There are only 3 short term drawdown periods with a maximum drawdown of -15.04%.

The following charts show how DTS-1 resolves those drawdown periods faster than PB5:

From May 8 – May 20, 2008: DTS-1 resolved the drawdown in 2 weeks.

DTS in Sideways Market 2008 - 1

From July 14 – July 30, 2008: DTS-1 resolved the drawdown in 2 weeks.

DTS in Sideways Market 2008 - 2

From Aug 18 – Sep 4, 2008: DTS-1 resolved the drawdown in 3 weeks.

DTS in Sideways Market 2008 - 3

As you see from the charts above, DTS-1 needed a maximum of three weeks to resolve the drawdown in that period, compared to PB5 that needed 3 months.

Note:

Next time I will make additional back testing video available at our website.

DTS System 1 – 4 years Back Testing Results:

It’s time to test DTS-1 using 4 years data (Jul 2004 – Sep 2008).
I use historical data from Alpari website which it can produce 90% data modeling.

Using DTS-1, we can finally activate all C-cycles (C1 through C4) working together to produce more profit without the worry of causing very large drawdowns.

First Setting:

Using Risk Setting=3; All cycles (C1-C4) Enable; with SP Distance = 50 pips between the cycles; no watermark calculation.

DTS Backtest Result 2008

Notice that DTS-1 produces a very consistent profit return (the equity grows smoothly over time).

The Equity grows from $10,000 to $108,000 in 4 years (+980% profit return).

Maximum drawdown:-37.47% (happened 1 time in 2005) ~ compare to PB5: -55% (Risk=3).

Maximum open positions (in 1 cycle): 172 positions.

Maximum total open positions at once (from 4 cycles): 351 positions.

Next Setting:

To reduce the drawdown and the open positions, I ran the EA with several settings below:

Note:

Not every broker allows you to open 350 positions at the same time.
I checked with FXDD, they allow up to 200 positions (which we can run on 1 or 2 cycles).
Interbank-FX allows up to 1,000 open positions; so IBFX would be my 1st choice for DTS-1.

- 1 cycle only (C1) with Risk=3.

DTS with 1 Cycle only and Risk Setting 3

The Equity grows from $10,000 to $34,501 in 4 years (+240% profit return). The maximum DD: -24.89%

- 2 cycles (C1 & C2) with SP Distance=100; Risk=2; No Watermark Calculation.

DTS with 2 Cycles and Risk Setting 2

The Equity grows from $10,000 to $39,100 in 4 years (+290% profit return). The maximum DD: -21.06%.

- 4 cycles (C1-C4) with SP Distance = 50; Risk=1; No Watermark Calculation.

DTS with 1 Cycle only and Risk Setting 3

The Equity grows from $10,000 to $32,854 in 4 years (+228% profit return). The maximum DD: -18.55%.

- New risk management (Risk 88):

I use a new risk management (Risk 88), the purpose of which is to limit the drawdown to less than 30% of your initial capital. The EA starts with the Minimum Risk Setting first, then increases the risk setting as your capital grows.

Example:

DTS starts with Risk Setting=1.
After DTS makes a profit of 20% from your initial capital it increases the Risk Setting to 2.
After you make a profit of 30% from your initial capital it increases the Risk Setting to 3.

Based on 4 years back testing on DTS-1 & PB5 (Jun 2004 – Sep 2008):

Gino Poe-Head Forex Division (Ciptadana Security / Man Financial)

Gino Poe-Head Forex Division (Ciptadana Security / Man Financial)
“Intellegent Team… ! The Balancing Method for the arbitrage, I think it’s unique and special, especially combining the fundamental and technical together in one system.
I think we need more workshop like this one !”

Where do we go from here ?

I learned from my PB5 experience that not everyone can appreciate the potency of PB5.

PB5 has been downloaded more than a thousand times from our website alone and I understand that not everyone has the patience to learn how to use it correctly.

Some overtrade PB5 until the drawdown becomes too big; some only run it for 1-2 months in a bad market and say negative things on various forums. Others want to find the holy grail: a trading system that they simply load into their computer and expect to make money every day without even bothering to understand the logic, the system requirements or their broker conditions…

…If you are still reading this far, you are definitely not one of those…

So, for the DTS-1 program I tried to make a different solution:

I will send the EA that work on your demo account, and I will run DTS-1 from our dedicated servers directly into your Live account.

Download statement report from LIVE account that use DTS-1 (Risk=1) here.

You do not have to rent a VPS to run DTS-1, and I will setup DTS-1 with your account using the correct risk setting according to your capital.

We have many dedicated servers for our managed account program, so basically you use our DTS like our managed account clients but without having to share your profit with us.

… please, do not tell our managed account clients…

(actually most of our managed funds clients are more than happy to pay me a percentage of profit as long as I generate more and more profit for them).

Note:You have option to run DTS-1 on your own VPS later.

Ok, all you need to do is: subscribe to our DTS-1 program for a very small fee.

And I include a 100% money back guarantee…!

If DTS can not make money on your live account, I will refund the subscription fee 100%.

You think I’m crazy offering a service like this one…

I have to spend my time, my resources (servers, staff, money, etc) and if DTS-1 does not make money for you I get nothing.

This is my way to show you how confident I am with my trading system.

There are lots of subscription-based trading programs that cost ten times more than our service. They do not have a money back guarantee, and they don’t even make a consistent profit.

… I hope you think it’s a fair offer. I’m sure you can’t find this kind of service anywhere else….

Why so cheap ?

I want everyone to get the opportunity to use my trading system. But it will be first come first served because I only have small slots to offer.

You know, our company has a hedge fund program in Singapore that needs a $50K minimum deposit before anyone can join us.

If you want to know more information how to start with the DTS-1 program or how to upgrade your PB5 into DTS, send email to support@forexhope.com with “DTS-1 information please” in the subject.

Final Note

Although DTS-1 is better than PB5 in performance and risk factor, I will continue to develop PB5 using C-Cycle / M-Cycle and re-release PB5 with some improvements every 2-3 months.

The main difference is that PB5 (SE Edition) will not use B-cycle, I-cycle and R-Cycle.

On our new membership area, on a weekly basis, I will post comments on what DTS-1 is doing compared to the basic C-cycle used in PB5, and give my special analysis on the EURUSD market.

By subscribing to the DTS-1 program and running PB5 on your computer, you will learn more about how to run your PB5 efficiently.

You can run your own version of PB5, compare it with DTS-1 and learn how DTS-1 solves drawdowns faster with its strategies.

I created pyramiding hedging trading strategy, like: PointBreak and Dreambuilder-FX Trading System, correlation hedging system like Vision Trading System, Breakout trading strategy, like Fractals Trading System and Evolution Trading System, and many more.

In this article I explain about PointBreak Trading Strategy

Some of PointBreak features:
• Small trades are continuously added above and below the opening position.
• The system will pyramiding, hedging or closing some positions depends which way the market moves.
• All trades are closed only when a net profit is reached and added to your account balance.
• Built in money management will automatically calculate the correct position size for your risk level.
• Can use as a full automatic trading system or use it to create your own trading system.

PointBreak is one of the finest forex trading strategy anywhere.

This is overview of the logic behind PointBreak trading system.

The system was developed with the understanding that the market goes where it wants to and when it wants to; we don’t know and will never now with long term accuracy which direction it will go. Our system goal is to go with the market, especially with the trend.

The logic is called adjusted pyramiding system. Pyramiding is a popular technique of adding to positions as the market is moving in your favor based on technical analysis. For more information about Pyramiding strategy, read my articles about pyramiding strategies.

PointBreak trading system work best on a trending market.

Cycle

A cycle is a series of trades that are placed and accumulated until the total net profit target from all trades since the cycle started combined is hit, exiting all trades at that level.

Whenever a cycle is started, the current price will become the Starting Point (SP). There are some conditions on how to start a cycle. We use breaking the channel as the main indicators setup. But no matter where the SP is, the idea is that the market will eventually move higher or lower from SP.
The cycle can close with profit in just 1 day or several times a day, on a choppy market a cycle can only be closed after several days or weeks.
PointBreak trading system is not like a day trading system, but an advanced swing trading system.

Basic Pyramiding Rule

The trading will begin by adding positions in favor of the direction of the market. As the market moves down, it will sell one position every 3 to 5 points below the SP line. For each 3 to 5 points above the SP line, it will be buying one position.

Buy 1 and so on until profit target is reached
Buy 1
Buy 1
Starting Point (SP) —————————————
Sell 1
Sell 1
Sell 1 and so on until profit target is reached

The pyramiding technique work best on trending market; where the positions become skew to 1 direction.

For downtrend market:

Buy 1
Buy 1
Starting Point (SP) —————————————
Sell 1
Sell 1
Sell 1
Sell 1
Sell 1
Sell 1
Sell 1
Sell 1
Continue to Sell 1 as the market going down until profit target is reached.

For uptrend market:

Continue to Buy 1 as the market going up until profit target is reached.
Buy 1
Buy 1
Buy 1
Buy 1
Buy 1
Buy 1
Buy 1
Buy 1
Starting Point (SP) —————————————
Sell 1
Sell 1

It doesn’t take a large move in one direction or the other to hit the profit target. The smaller the profit target, the smaller the required move.
Once all the trades that are open total a profit target, all the trades will be closed out thus locking the profits. This ends the cycle.
Once the cycle ends, the EA will wait until there is another setup to start a new cycle.

The key to this strategy is to not exit a cycle until the profit target is hit. Based on this theory, it can only work if you have the funds to hold onto the times where the market is in choppy action.

There is one problem to this strategy: on very choppy market, it is possible the drawdown becomes as the range expanded so big that the probability of hitting the profit level become smaller and the probability of the drawdown becoming large increases.

You would then become at risk of being over-margined and forced out of positions by the broker. This will be covered on the next section.

Moving Start Point (MSP) process

Although all efforts made to create a successful pyramiding strategy through multiple cycles, there are scenarios that one cycle becomes involved in a prolonged drawdown. This is when the MSP process comes.

The main goal of MSP process is to move the SP as high as possible at a downtrend market, and move the SP as low as possible at an uptrend market.

In other words, for the uptrend market, the main goal is to manipulate the SP to become skewed to the buy side; accordingly for the downtrend market, the main goal is to manipulate the SP to become skewed to the sell side.

The way MSP works is to take off some profitable positions and move the SP higher or lower.

For example if there is uptrend, then MSP will exit a bunch of the profitable short positions and move the SP lower. If the market continues to move higher, it will add more long positions and closing out when the profit target reached.

For downtrend market, the MSP will exit a bunch of the profitable long positions and move the SP higher. If the market continues to move lower, it will add more short positions and closing out when the profit target reached.

Multiple Cycles

With our money management technique, the EA has the ability to run more that a single cycle at a time without causing any additional big drawdown. It uses different SP so that while one is in a drawdown, the second one is closing out numerous cycles. It creates a probability of success that is many greater than if it simply use one cycle running at a time.

The default setting use 100 points between the cycles, so when the first cycle become drawdown and the second cycle will be started after the price running 100 points above or below the first cycle’s Starting Point.

A maximum of five cycles (C1-C4 and M1) can be run together using this EA. I would suggest you start with 2 cycles C1 & C2 and M1 until you become comfortable with this EA. It is possible that all cycles get into a drawdown, although the probability of all cycles going into an extended drawdown at the same time is extremely small.

Multiple Trading Strategies

PointBreak trading system now contain additional trading strategy using M1 cycle, compare to version 4.0 which only use four cycles C1-C4.

The difference between C1-C4 cycles with M1 cycles:

Cycle                      Cycle C1-C4                                       Cycle M1
Strategy                   100% Pyramiding Strategy                 70% Averaging strategy and 30% Pyramiding strategy
Trend Indicator     Slow SMA and Fast SMA                    MACD
Lot size                    As specified in the risk setting           0.5-2 times lot size cycle C1

The main goal of multiple trading strategies is to make the drawdown become smoother when there is choppy market.

The next version of PointBreak will include Multiple Profit Targets and the use of trailing stop to lock some profit and try to gain more profit as the trend continue.

We continuously research the best setting and the best currency pairs to trade PointBreak system.

Multiple Close Profit Strategies

Since 2007, we invented multiple close strategies. Beside each cycle has its own close profit procedure, there is additional simultaneous close technique which close all open positions together on specific rule, this make the close profit target be reached even faster, and as a result the expanding drawdown probability become decrease also.

Money Management

The probability is that the maximum largest expected drawdown is about $1,500 (using 0.01 standard lot) with Conservative setting. Although it is not impossible exceed this drawdown.

Based on the drawdown risk when the cycle ranges become expanding, trading more than 0.01 lot per $5,000 for standard account is discouraged.

Fortunately, the EA uses automatically money management system that it will increase the lot size when the profit accumulated. For example when the EA start with $10,000, it start using 0.02 lots, it will increase to 0.03 lots when the equity become $15,000.

We can’t stress enough to use LOW risk setting (small leverage) first.

Conclusion

The PointBreak is a very powerful trading system. PointBreak will make consistent profits over long time period as long as you do not overtrade.

With the diversified execution time and strategies, the consistency of closed out profit potential not only increases, but also the probability of seeing extended drawdowns is dramatically decreased also.

The probability of seeing more than 30% drawdown with Conservative setting becomes almost mathematically impossible.Further, all of the normal cautions associated with PointBreak system, such as having continual, uninterrupted online access is very important.

I would encourage you to try this system on a demo account for three months first..

And below here is a review from a person that already use my trading system.

PoinBreak Expert Advisor

Expert advisor number one! Period! Hi, I am Ben and I am a “nobody” who would like to share my experience with automated trading using expert advisor or forex robot, some might say. Expert advisor are a very powerfull tool to make your live easier in term of trading that is. Making money in Forex is not as easy as some of the so called guru said it would be. Making money in Forex requires your full concentration and you must posess a medium to expert technical analysis capability other wise you will end up like the 95% trader out there who loses their money because of lack of knowledge on how to trade in Forex. That is why, as a newbie, I would like someone or something that can help me trade in Forex confidently without any fear or greed.

In the past 4 month or so, (yes I am still new), I started to digg into this forex and I have a lot of information about them. There are many trading system out there that say they can get you profit as long as you follow their instruction. Well it is true to some extent but in the end you will try a more simple and easier approach in trading and that my friend come in the expert advisor or ea.

There are many ea in the internet that you can get for free and some are even commerceliased. What I want high light here is the using of one commercialised expert advisor that is so powerful, I am moved to make a page for it because of its effectiveness. The ea is called Point Break 5.0.

This ea is very effective and can make you profit because of the way its trading strategy is being implemented. It uses two type of strategy, pyramiding and averaging. The expert advisor will only close trade if an objective net profit is being fullfilled. The developer of this great program is Mr. Yohanes Gagahlin and he uses this expert to trade and manage bank , hedge funds etc.

Basically the Point Break is the basic concept trading system of DreamBuilder FX. The EA itself use Pyramiding and hedging strategy. For more detail you can check Dreambuilder EA.

Happy Trading.