PointBreak Trading System
by admin on 05/01/08 at 12:44 am
For the past 5 years, I have created several trading strategies and it has been using by hundreds of trader.
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. 
