May 26, 2012

ForEx Trend Rider Final Review

I am closing this a week early as Monday is a Bank Holiday in the US and Friday is NFP. Both a no trading days for me, so next week was going to be a short week anyway.

I have looked at Forex Trend Rider by Alex Buzby. The system costs $67 (apparently for a limited time, otherwise $127). For that you get a weak PDF explaining the system that is really only explained by watching 14 videos. I say weak PDF because three paragraphs on Money Management, which in no way explains anything about Money Management which is a key component to any system, or the roughly one page on Psychology, the other vital component, is quite frankly laughable.

Thankfully there is a two losing trades and you are done for the day rule, this will limit the damage if the market is range-bound. Another thing to be thankful for is that the system appears to have short-stops, again damage will be limited.

I added some additional filters to the system:

  • Both MAs below trendline for a sell, or above for a buy, as you need to wait for the indicator to change colour anyway this seemed a reasonable addition to ensure that a trend was starting.
  • Some degree of separation between the MAs, if the two MAs are snaking and intertwining there isn’t a clear indication of a trend either.
  • Don’t trade off a large bar (think this is in the manual anyway) of around 20+ pips long. You have to be careful as sharp moves in any direction are often followed by a retrace or a period of sideways movement where the market consolidates.
  • Don’t trade off a large move in either direction as you should never trade the end of move.

I used a 15 minute EUR/USD for the main trial using the Cash Master standard £10 per pip.

I also ran a separate trial using a 4-hour EUR/USD. To see if this system could be used by the 9to5ers out there.  I risked 3% of the bank per trade, so the actual size of the bet was dependent on the bank and the stop loss at the time.

Well, the system performed quite well and much better than I expected. I ended up 264 pips up for £2,640. A profit is a profit, but this is a tad low for 3-months work. The longer term trial also worked, ending up at 339 pips for £1934 (off a £10k starting bank) profit; a tidy sum for a few minutes work per day.

These profits were generated off just 1 pair, so adding GBP/USD, EUR/JPY, GBP/JPY, GBP/CHF, AUD/USD and perhaps EUR/GBP may have returned additional sums; I have not investigated this.

I would categorise this as APPROVED, especially on the 4-Hour. However the 15 Minute strategy badly needs an alert. 12 Hours per day for, perhaps, a single trade requires too much concentration and you’d easily miss a trade without an alarm of some description. For that reason together we a lowish return for 11 weeks effort, I am going to downgrade to NEUTRAL.

You can get Forex Trend Rider here:

http://www.cash-master.com/forextrendrider.php

Filed under Forex,Spread Betting by Arthur

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