I have been looking at the Mean Reversion Profit (MRP) Strategy by Martin Carter. This is published by Thames Publication, and like the approved Bread and Butter Trader it is delivered as a printed document via snail mail.

This is a different approach than most ForEx strategies out there as it plays two instruments against each other and does not require a StopLoss.  The member’s website gives you the indicator values, and the recommended action. This site is regularly updated.

Two strategies are covered, one which requires trade monitoring at six set time points throughout the day. The other strategy is a “fire and forget”, where the trade is closed after two days.

I monitored both strategies.

I used £10 lotsizes on Dax, with whatever stake the algorithm in the manual suggests for the other instrument. This keeps the results broadly in-line with the Cash Masters standard £10 per pip for ForEx system reporting. By my estimation you’ll need an account of around £10,000 to operate at this stake, so I will also use a £1,000 account as this is more sensible for beginners.

The Ad-Hoc strategy has not performed well. This is a long-term strategy that I feel needs several days of a trend in order to make money. The three months of the trial have been notable for the amount of chop in the respective instruments made all the more evident with just 1 trade in the final 2 weeks of the trial due to conflict with the short-term indicator or direction changes. As we haven’t had a trend worthy of the name it is difficult to state how this strategy would behave under those conditions.

The “set-and-forget”, on the other hand, has performed reasonably well as this operates of the short-term indicator.

This, then leads to a dilemma on how to categorise this. Combining the results of the 2 strategies still leads to an overall loss of around 100 pips. The best way to approach this is to leave the “Ad-Hoc” strategy alone until the weekly newsletters indicate that market conditions are now favourable to trade this strategy.

This just leaves the “set-and-forget” at 92 pips in 12 weeks it is a respectable hawl. £56 profit from the £1000 starting bank could be better though, and this doesn’t really improve if using “Liberal” stakes (from the staking calculator). £10 per pip does show better profits, so for this strategy a fixed stake, or a ratchet stake (increase on profits but don’t decrease on losses) may provide a better return.

I am going to go a NEUTRAL overall, and this is just using “set-and-forget” only. In 12 weeks a £1,000 bank would not have recovered the cost of the system; you have needed a start bank of £5,000 for that. But £10 per pip shows a reasonable profit, growing the bank by 10%, so I can’t dismiss this system either. I think the other factor to consider here is the size of bank that will be needed if you are looking to make a liveable income from this.

One footnote: I believe that the author and publisher are using “set-and-forget” more actively than I have done, and for what appears to be better results. I simply took the price 2 days after I opened the trade and have not closed the trade when in significant profit; actually not monitored the trades to determine whether the trades every went in to a significant profit! My average profit on profitable trade was around 22 pips, closing the trade when 50 pips up may have limited some trades that then went on to make losses. I simply have not monitored this and have not traded this way, but the MRP Newsletters indicate that this would be a better way to trade “set-and-forget”. On this basis I recommend folks avail themselves of the trial and, using paper-trades on a demo account, investigate this approach. Alternatively, scale out (close half) at 50 pips profit in the hope of catching a nice move but close the trade at, or close to, break-even. In short, there is a moderate chance that this review has suffered because I have used a very rigid and mechanical exit strategy. There are reasons why I have taken this approach which will become clear in the next few weeks.

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