Why does Forex Set and Forget place the same trades multiple times?

A customer wrote me today asking why his Forex Set and Forget placed some losing trades, then two hours later placed the exact same trades. I thought that would be a good topic for this blog...

When a new bar forms on the daily chart, if the moving averages and support/resistance levels are lined up right, then I calculate an entry level for that bar. That entry level never changes for the whole life of the bar. When the price reaches a predetermined distance from that entry level, pending orders are placed for entry at the calculated level. If the price then retraces too far away from the target, the pending orders are deleted and the cycle starts all over again. Otherwise, the price eventually reaches the entry level and the logic to manage open trades kicks in.

During a ranging market, the price can cross back and forth over the calculated level multiple times in a single bar, triggering pending orders if no orders are already placed. Some of those orders will end up as losing trades, but eventually when the price breaks out of its range then you will start seeing profitable trades.

Anyway, there's more but I'll end here for now. Later I may put up a video explaining some of the workings of Forex Set and Forget.

Forex Set and Forget version 1.11 is live now

OOPS! I forgot to mention that I released version 1.11 of Forex Set and Forget (FSaF) last night. There are some significant differences from version 1.09, and it only trades on 5 currency pairs now (4 of which are JPY pairs). Anyway, check it out...

--> http://amelabs.com/recommends/fsaf.php

If you already have version 1.05 or higher then you can simply upgrade by using the "Check for Updates" icon in your current installation.

I Started a New Blog

Started a new blog a few days ago. Most of the articles are not mine but they are Forex and income related. New articles will appear there daily. Check it out when you have a minute. Anyway, from now on, anything I write pertaining to EA's, indicators, strategies, etc. will go here. Everything else will go to the new blog.

FSaF 2.00 coming soon!

As you read this I am forward testing Forex Set and Forget version 2.00 on a live account. Version 2.00 should be available in 2-3 weeks. Here are some of the differences that you will encounter.

• FSaF will be running on D1 (daily) charts instead of the original H4 (4-hour) charts.
• Templates will be used instead of Preset Files. Now you just open a chart, set the timeframe to D1, apply the correct template for your chart and everything will be set up for you (EA, indicators, etc.). No more applying EA, loading preset file, applying moving average, applying support/resistance.
• Improved entry logic that so far is proving to be much more reliable, especially on the D1 chart.
• Improved stop loss and trailing stop logic.
• New version of AME Custom Library with improvements and tweaks (more informative email, better ECN broker support and more)
• Brand new pricing model will allow you to obtain FSaF at a much lower price. Upgrades are free for existing FSaF users. Some bonuses for existing users too!

Here's some info about how I chose which pairs FSaF will run on and also how I determine the Parameters Settings for each pair...

1. I run each pair through the optimizer, optimizing for the most influential parameters.
2. Once I have a list of all combinations that end in profit, I run it through an advanced version of the EA Reliability Spreadsheet.
3. Then I start looking for the combination with the highest Reliability Factor that matches the following criteria:
   
   - At least 10% profit per month gains on average.
   - Maximum drawdown of less than one third of the initial deposit.
   - Ending profit of at least three times the maximum drawdown.
   - No less than 12 trades per month on average.

If you want to be notified when FSaF becomes available for download, sign up for the FSaF mailing list (form is on the right of this page) and you will be the first to know.

Do you like contests?

I found this interesting site that lists a bunch of companies that host Forex Contests. Anyone who knows me knows that I love trading contests, especially for Automated Forex Trading. So don't be surprised if a future post to this blog announces my entry into a trading contest. :-)

Just upgraded my FRWC

An upgrade was available for the FRWC Fusion, so I had to close all currently open trades (most of which were in profit WOOHOO!) and shut down my Metatrader in order to upgrade the robot. So far it is the only time I had to interfere with the robot's trading. There were no stop-loss or take-profit on any of the open trades, so I don't know how they would have ended if I hadn't interfered with them.

FRWC Fusion? Failing?

Well, I have been running the Forex Robot World Cup Fusion EA for about a week now and it was off to a good start. However, in the last 2 days it lost all of its previous gains and the account is down more than 3%. Of course one week is not enough time to measure the true performance of a robot (I wish some of my EA customers knew that).

Like I said before, I will let FRWC Fusion run for one month before making any judgements. After all, 3% drawdown on an account is not a bad thing if the losses can be recovered. Here is a simple formula that I use to determine if a robot is worth investing money into...

1. Let the robot run for at least 1 month (or backtest for 3 to 12 months).
2. Calculate the maximum drawdown on the account during the testing period.
3. The account profit at the end of the time period (or backtest) must be at least 3 times the amount of the maximum drawdown.

If you want to be even more aggressive in your testing...

1. Run 12 1-month backtests for the past 12 months, noting the max drawdown and ending balance for each month.
2. Calculate the average ending profit of all 12 months.
3. The AVERAGE ending profit must be at least 3 times the HIGHEST max drawdown.

I would imagine that most EA's on the market today will not pass the aggressive test. But if you find one, you should really take advantage of it and use it for a nice additional cash flow. I myself am working on an advanced version of Forex Set and Forget that can easily pass such aggressive testing. I am also working on a new version of AME Cross Trader that can be used with any of the money management strategies in my book, The Forex Millionaire Maker, to enable you to become wealthy in a matter of a few years.

Sign up for the mailing list now to be notified when these new versions of my robots become available.