Wining Forex system

When analyzing a system you should take into consideration several factors. Many times the excitement and anxiousness to get started in a new investment makes people overlook basic things. Some years ago a study revealed that people spent more time shopping for a new TV than to decide which fund to invest in. While choosing the right TV is important, is the correct investment decision which will allow you (or not) to continue shopping for gadgets in the future, so you should not overlook the source.
The most common reasons why systems and strategies fail:
System only works for one currency pair: usually a bad sign. A logic and robust system will work on all or most currency pairs, of course will work better in some and worse in others, but should still work. Working on 1 or 2 currency pairs usually means the system is curve fitted, or is only able to trade in specific currency conditions, as soon as the currency change its behavior it will stop working. Our system trades 6 different pairs with consistent results. We choose the mix based on correlation between the pairs, daily swap paid and historical drawdowns.
Systems with +90% of win rate: is very difficult to obtain those results if not curve fitted or only few samples in the data. While newbies are attracted to this high win rate, usually means that as soon as the rate falls to 70% or 80% the win/loss ratio is not enough for the system to maintain. Our system has a 65%-75% win rate, delivering robust results.
Small sample data backtested: amount of data and trading frequency must be relevant. If you find a system that in the past 3 years produced 20 trades is probably not too relevant from a statistic point of view. The more trades generated means more relevancy. Also 6 or 12 months of data is not enough, you need to test the system against years and years of data to show the consistency in different market conditions. Our system was generated with more than 8 years of past data, and more than 2000 trades in the analysis.
Subjective or emotional criteria involved: very common problem. In the past is always easy to guess what "was" the best action to take, as the old saying reads ...hindsight is always 20/20. However, in real time emotions make it hard to take the right decision. Our system has no emotional or subjective criteria to generate the trades.
Not considering the impact of spreads and swaps: a pip here and there in every trade weights towards the end of year. Spread is where the broker makes it cut, so they must be factored in the system. Swap/Interest plays an important role, use them to your advantage. All our pairs are swap/interest positive, meaning that for every day holding the trades you will receive positive interest. Consider it as a bonus for holding the trades a few days.
Not considering real drawdown: in order to know your capital requirements you must know the system drawdown figure. Always stay in control of your account, that means never overeager it. When you over leverage it you pass the control of your account to the market swings and the broker who may liquidate your account if you margin falls below the requirements. You can trade our with low leverage, adjust the margin to your risk tolerance and depending if you trade more systems at the same time in your account.
We suggest to trade all pairs, since winners and losers will tend to compensate. However, is important to understand each pair characteristic and how they impact the system. We choose to show ALL available performance history, and not just the latest months. As much information as possible help our customers to make better decisions:
Stats for the latest 8 years for the six pairs traded by PipsExpert:
EUR/USD

Number of lots per trade
2
Profit Factor
3.85
Win Rate
77%
Avg Days in Trade
2
Worst drawdown (pips)
419
Comments
One of the most stable, liquid and consistent trading pair for PipsExpert system. If you prefer to start with only one pair then Eur/Usd would be the best choice. While interest/swap received is low, its usually a very stable pair.


GBP/CHF

Number of lots per trade
1
Profit Factor
2.56
Win Rate
81%
Avg Days in Trade
4
Worst drawdown (pips)
780
Comments
Another steady performer and excellent swap/interest paid for holding it. Is more volatile than Eur/Usd but also more profitable. Be aware that this pair, like Gbp/Jpy, is the choice for carry traders. That means when market conditions start to get volatile this pair will move according.