I have been looking at 4ex Pip System, a ForEx scalping system costing £129.99 and with a 60 day money back guarantee.

It is simple enough system based upon sound principals for entries but I have struggled with exit strategies (update, these have now been vastly improved). Two trading windows are advised for each day, but with any luck you’ll be done and dusted quickly in the first window, so you aren’t tied to your computer all day.

With scalping systems, you aren’t really trying to grab the most pips you can out of each trade, or even each day. Rather, you set a daily target of between 10 to 30 pips. Perhaps the best way to use this system is to aim for 10 pips, close 50% of the trade, bring the stop to entry and aim for the remaining 20 pips. The simplest exit strategy would be to just aim to 10 pips per day or per session.

I wanted to blog this using a ForEx pair, a commodity and an index. For ForEx I looked at GBP/USD and EUR/USD pairs. The commodity looked at was Texas Light Crude as this is often very volatile but was unable to get this to work and I abandoned this part-way in to the trial. I used both FTSE and Dow for indexes.

The stop loss is 20 pips. As per normal for Cash-Masters ForEx blogs I will operate at £10 per pip but I will also run a £1,000 start bank using 3% risk. 3% of £1,000 is £30, divided by 20 pips means my starting stake will be £1.50 per pip. My broker needs stakes using 10p multiples, so the stake will be rounded down to the nearest 10p.

EURUSD

GBPUSD

FTSE

DOW

AM session

153.5

32.0

229.0

-56.0

PM session

182.8

28.1

91.0

166.7

Total

336.3

60.1

320.0

110.7

EURGBP gave an even performance in both session for £3,363 to £10 stakes and £680 from the £1,000 starting bank.

GBPUSD has proven difficult to get consistent results out of, but still made £601 to £10 stakes and £71 from the £1,000 starting bank.

FTSE unsurprisingly gave the best performance in the morning session for a total of £3,200 to £10 stakes and £584 from the £1,000 starting bank.

Dow unsurprisingly gave the best performance in the afternoon session for a total of £1,107 to £10 stakes and £200 from the £1,000 starting bank.

You’d need a bank of around £6,500 to operate at £10 per pip.

Around 800 pips in 11 weeks is a decent haul. A near 70% increase in bank just of EURUSD or FTSE is also decent performance. With simple entry criteria this system is APPROVED, with a note to the observation above about exit strategies.

You can get 4ex Pip System here

Firstly apologies for the delay in any update but there have been some very valid reasons and work has been ongoing in the background.

The purpose of this test was to see if the system is still working and is still profitable, well the answer to both those questions is yes.

The downside for me has been the fact that it is necessary to be sat at the computer for at least three hours a day; six if you want to do both sessions which is something I simply can’t and don’t want to do.

The original test explained that the optimum times for trading this system is between 07:00 – 10:00 and again between 13:00-16:00. There is good reason for this and is connected with the opening hours of the markets for the currency pairs.

The upside is that the system is very mechanical so if you follow the rules as written then there is no ambiguity in entering a trade. This means it has been possible to look at the historical performance the details of which are below:

January – April

Month       Total Trades     Winners      Losers     Strike Rate         Profit

January          173                    129               44           74.5%               20.5%

February        140                    102               38            73%                  13%

March             173                    127               46            73%                  17.5%

April                 87                      64                23            73.5%                 9%

So as you can see a consistent strike rate if you took all the trades between 07:00 – 19:00. However as previously outlined this performs best during two specific windows so lets look at the performance at different times of the day:

Winners               Losers                Strike Rate                Profit

January

0700 – 10:00              34                          9                           79%                         8%
10:00 -13:00              18                        10                           64%                       -1%
13:00 -16:00              41                         7                            85%                        13.5%
16:00 -19:00              35                        18                           66%                       – 0.5%

February

0700 – 10:00              31                          8                           79%                         7.5%
10:00 -13:00              17                         11                          60%                        -2.5%
13:00 -16:00              33                          6                           84%                         10.5%
16:00 -19:00              21                         13                          61%                         -2.5%

March

0700 – 10:00              32                          9                           78%                         7.1%
10:00 -13:00              36                         10                          78%                         8.1%
13:00 -16:00              28                         15                          65.1%                     -1.1%
16:00 -19:00              31                         12                           72%                        3.5%

April

0700 – 10:00               12                         4                           75%                            2%
10:00 -13:00               13                         6                           68%                           0.5%
13:00 -16:00               17                         7                           70%                          1.5%
16:00 -19:00               22                         6                           78%                           5%

So to bring those monthly stats together the performance difference can be seen:

January – April            Winners         Losers             Strike Rate               Profit

07:00 – 10:00                      112               30                        78.8%                    26%
10:00 – 13:00                        84               37                        69.4%                     5%
13:00 – 16:00                      119               35                         77.2%                  24.5%
16:00 – 19:00                      109               49                         69.9%                    5.5%

So its quite obvious that the system works best between 07:00 – 10:00 and 13:00 – 16:00 and significant profits can be made despite a very quiet April.

The issue for me then was how to make best use of these six hours a day so I have been put in touch with Arthur and am working with him to hopefully create a bot which can work with a spread betting account (we both use IG ) to place trades without the need to sit at a screen which could be game changer as far as this is concerned. Now when I say “working with “… Arthur is mostly definitely doing all the heavy lifting so I can’t take any credit for whatever he comes up with, nor can I take credit for all the lengthy painstaking back testing which has been done by my son who has a masters in finance and investment and actually loves price action / candlestick charts and who is starting up his own trading product very soon which I hope will be trialled here on Cashmaster.

So to sum up, 4ex Pip System remains profitable but at the moment does require a fair bit of user input, if you can / want or are prepared to give it the time then you can see double digit profits can be made.

You can get The 4ex Pip System here