Website : As far as we aware this system is no longer available
Cost : $97
Author : Stephen Lee Jones
Review Date : April 2010

WHAT IS SAYS ON THE WEBSITE

A “Seven figure professional Forex trader exposes his $7317 a week 100% mechanical, automated ‘fool-proof’ trading plan proven to generate profitable winning trades on autopilot in only a few minutes a week”, “the perfect system developed for 9-5 ‘ers to effortlessly secure a ‘set-and-forget’ second income”.

There are 8 example trades on the site showing profits from $8,100 - $144,400 across many different currency pairs on the Weekly and Daily charts, with trades running for a duration of 24 – 252 days. The returns are based on trading 50 lots on a mini account and the system “has never had a losing month so far”.

Forex Backlash is a “low risk, high reward system” “proven to bring in profitable trades each and every day” and “requires a few minutes of your time each week”, “set it, and forget it”. The system is “completely beginner friendly ... even if you have no clue about how to trade Forex up to this point, you can read through the guide and start to profit from Forex the very same day”. The guide “will put you right at the very top within minutes, it’s all you need to know to start profiting on autopilot today”.

With the system being 100% mechanical there is “no need to learn technical analysis” and there are no judgement calls to be made. The system is applied “any time of the day, any day of the week in just a few short minutes”.

You “will be ahead of 99% of the rest of the Forex traders” with Forex Backlash.

THE PURCHASE

$97 via Clickbank.

Note: At the time of writing, clicking on the “back arrow” on the browser or “close browser” provided us with a $67 payment option instead of the $97 advertised price.

Also, one of our pet hates. After purchase we were instantly taken to another page with the option to buy Forex Backlash Advanced. The selling points here “increases profits by 25%, 50% or even more” and “boosts profits to levels you think may be illegal”. We figured we would be suitably equipped with just the standard version so we didn’t shell out the additional $67 for the advanced version, besides we absolutely hate these “up-sell” offers.

THE MATERIAL

The manual is 57 pages in length and presented in quite a nice Powerpoint kind of style which is pleasing to the eye.

After a dozen or so pages of general introduction we get into what the system is all about. The system operates around a Bar chart, an SMA, Guppy Count Back Lines and some basic Gann methodology.

Although a little complicated after the first read through, a bit of note taking and familiarisation of the examples means the system does become understandable and can be traded mechanically. Entries, Stops (initial & trailing) and Targets largely adhering to standard Guppy Count Back principles with a mixture of basic Gann theory.

The majority of the trading examples are based on the Daily charts with the major currency pairs being identified as instruments of choice.

THE SYSTEM IN THEORY

Setting up this system is very easy, a bar chart with one moving average. Some basic knowledge of Guppy Count Back Lines and Gann theory and off you go.

In reality this is, in the main, a formalised, albeit quite well documented, trading system based on the Guppy Count Back Line formula.

Entries and Stops are 100% mechanical with Exits being almost completely mechanical, relying a little more on discretion as basic Gann theory and “emergency” exits are applied.

THE SYSTEM IN PRACTICE

Sticking to the Daily chart (the one most examples are based on & the one that best suits us) and four of the major currency pairs, we concentrated on USD/CHF, USD/JPY, GBP/USD and EUR/USD.

This is a system that can be quite easily back-tested so that’s what we decided to do for 2010 for the four majors mentioned above.

The results:

• USD/CHF – 4 trades, +105 pips, average Stop loss of 215 pips, biggest winner +255 pips
• USD/JPY – 3 trades, -106 pips, average Stop loss of 250 pips, biggest winner +45 pips
• GBP/USD – 3 trades, +174 pips, average Stop loss of 370 pips, biggest winner +768 pips
• EUR/USD – 5 trades, +170 pips, average Stop loss of 250 pips, biggest winner +664 pips

Our estimations are that this year to date we would have been in profit, that profit would be circa 350 pips or about 3% based on the average Stop size and risking 2% of account balance per trade.

What is obvious is that those big moves can be caught when the market really moves, note, GBP/USD and EUR/USD winning trades of 650 pips+. However, when the market is not trending so well, profits are harder to come by, note USD/CHF and USD/JPY.

Trading this system would require very little time, in actual fact 5 minutes a day would be quite sufficient to look for new trades and manage open ones.

CAN IT WORK

Results wise, yes we could probably see this system making a profit on the Daily time-frame for the 4 majors mentioned above. However, we do have a serious concern and that is the risk of catching a non-trending/sideways market. For us, this risk is great enough so as to choose not to trade this system in a real-time environment with real money.

This is not to say this system cannot and will not work going forward, there are just “safer” alternative strategies that suit us better at present.

SUPPORT

We had no reason to contact support so cannot comment.

CONCLUSION

PRO's
• Easy to set up and trade with minimal time commitment.
• Profitable in theory.
• Trade identification (including Entries, Exits and Stops) pretty much mechanical.
CON's
• That market timing risk - When you start to use this system would be crucial - a choppy market could be painful, especially if encountered straight away.
• Beginners would need to overcome the learning curve of Guppy Count Back Lines and basic Gann theory.


Do remember, your comments are important, if you have experience of this system do share them with us.

ReviewTeam - www.systemsfortraders.com