Website : LMT Forex Formula Website
Cost : $149
Author : Dean Saunders
Review Date : June 2009

WHAT IT SAYS ON THE WEBSITE

LMT stands for Low Maintenance Trading. The website offers a "proven 82% accurate Forex formula that earns over $10,000 per month with less than 15 minutes work a day".

There is a live example video on the website illustrating a +$6,000 winning trade on a daily chart that took "less than 15 minutes at my computer".

Following the "I spend more time making coffee in the morning than I do trading at my computer" the system is described as one "I devised after years and years of searching for systems to trade the Forex market".

Dean then goes into a little bit of detail on his background, "just 25", "trading on the Foreign Exchange since I was 16", "started with only the birthday money from my Grandmother" based on "a magazine article about Forex". Has "made every mistake in the book" and "blew one account after the other", "convinced it would change if I just kept making trades".

There follows an account statement showing a $30,000 profit during January and February 2009, for "less than 15 minutes a day". Then there is a quite lengthy story of how LMT came into being and it is summarised as "the secret is utilizing the convenience of automation but with complete human control".

The software aspect of the system "checks current long term trends", "calculates an 82% accurate point of entry", "calculates the exact stop and take profit levels", "keeps you in the trend as long as possible" and "allows you trade with less than 15 minutes a day at your charts". This plan, "with automated indicators and full trader control", "made me more money than I had ever seen".

The website continues with, this is the only system "proven to make money for everyone who tries it" that "has been my bread and butter for longer than I can remember".

Six LMT "Beta testers" from around the world all provide their own positive feedback before a final list of "real reasons you need LMT right now" is re-presented.

The deliverables are then detailed, a "simple language" 60 page manual broken up into "easy steps a seven year old could follow". Also included is a Custom Indicator package (for Meta Trader 4) which is "100% mechanical" and "82% accurate". There are also a range of video tutorials supplied "that walk you through everything".

There is one final section on how much the system costs plus the explanation of the 8 week (no questions asked) money back guarantee.

THE PURCHASE

Straight forward, $149 via Clickbank.

THE MATERIAL

As mentioned on the website we received the manual (which is actually 47 pages), the indicator set and access to the video tutorials.

The manual is very well written and very easy to understand. The strategy originally developed for the Daily charts can also be traded on the 4 hour charts. On the Daily charts 10-12 pairs are traded generating 8-10 trades a month with potential profits ranging from 100 - 2,000 pips.

LMT uses Meta Trader 4 (for its custom indicators) and the set-up process is extremely well documented.

There is a sensible Money management section (2% of account per trade max), a little on Trade sizing and then a little bit more on the different time-frames.

As per the example on the website the Custom indicators show a number of things:

• Trend direction
• Stop loss
• First target
• An oscillator (which looks a bit like a traditional MACD indicator)

These indicators and an additional set of "visual checks" make entry and trade management pretty much 95% mechanical.

There are 3 different exit strategies that can be mixed and used as you wish, all make perfect sense based on ones own attitude to risk.

THE SYSTEM IN THEORY

Setting up this system (in Meta Trader 4) is as simple as advertised. And, although we didn't try it out on a 10 year old, its highly likely that many 10 year olds would be able to set this system up, even those that have never used Meta Trader 4 before (which should be all of them!). We used ODL Markets, who offer a standard MT4 platform and also, in our experience, excellent Customer service.

The indicator is clear, as are Entry, Stop and Target levels. The Stop is usually about double the first Target, which is acceptable. Stop can be anything from around 30 pips to 120 depending on the pair being traded. Exit is dependent on the Exit strategy chosen.

Trading the Daily charts was difficult for us (our candle close time is midnight (GMT)) so we chose to trade the 4 Hour time frame. We are quite sure this can be overcome by changing broker/chart time frames or something, we just didn't go so far to look into it.

Money management, as mentioned above is sound at 2%.

THE SYSTEM IN PRACTICE

Not a system that can be back-tested as certain aspects of the indicators work in real time. But, we were able to run it in real-time for a number of weeks as it really is a system that requires little time and effort, even on the 4 hour time frame we chose.

Once set up, it is a case of checking every 4 hours for an alert on the Meta Trader 4 platform. A series of visual checks (and some common sense ones too) then make the whole trading process almost 100% mechanical.

Entries are clear, as are Stop and (First) Target levels. It's called first target because, as mentioned above there are a number of different (also sensible) exit strategies one can apply. We chose to apply the Aggressive strategy, this is the one that basically takes as best advantage as possible of the bigger moves. It involves, initially moving the Stop level to break-even once the First target is hit.

One aspect we did have to overcome was what to do with overnight trades but we came up with our own half way house strategy that we were happy with.

Over about a 3 week period we entered 10 trades on the 4 hour time frame across 10 currency pairs. Two trades lost, hit Stop loss before hitting Target 1, 3 trades were break even and 5 were winning trades. The most profitable winning trades was over 400 pips and the biggest loser was 85 pips. So, we ended up, not quite with the 82% accuracy but for sure, we made money.

CAN IT WORK

In our limited exposure to this system, it worked and we liked it. It's a relaxed way of trading and management takes little time or effort. We have added it to our Systems We Trade list and we will continue to trade it going forward. We will of course provide updates along the way.

SUPPORT

We actually had no reason to contact support so cannot comment.

CONCLUSION

PRO's

• We loved the time-frames and relaxed nature of this system.
• 95% mechanical.
• Added to our Systems We Trade (see our journal here).

CON's

• On the 4 Hour time-frame, the bit when you are asleep (what to do with open trades) - but this can be overcome as we did.
• On the Daily time-frame (in the UK), candle closes at midnight GMT, but, we are sure this can be overcome somehow.

Do remember, your comments are important, if you decide to purchase this system, please support us by using our link and by reporting back your findings, both are valuable to us and the service.

ReviewTeam - www.systemsfortraders.com

Do you guys always use the suggested figures as suggested by LMT? Sometimes the stop loss seems a bit big for me. Sometimes I do make my stop loss smaller. It only worked against me twice (out of about 30 trades)

Besides the huge stop loss it is working fine for me.

We assume you are using the Daily time-frame ? If so, your comments on stops on a Daily time-frame will, we are sure, be appreciated by others. We cannot really comment as we only use the 4-Hour time-frame for this system.

So far, we have been applying the recommended stop losses on the 4 hour time-frame as per our journal. We haven't found them to be too big (for this time-frame) so far although we will keep an eye. As per the journal, performance has been a little slack this month, seems you need at least one really good "runner" per month. We will continue onwards into next month and monitor.


ReviewTeam - www.systemsfortraders.com

I found LMT to be extremely profitable when it was first launched, and I made a good few hundred quid on just ?2 per point over the space of a week or two. I would put ?2 per pip on, and close half of my position out when it reached the first target and ride the rest until the exit strategy advised me to get out. I did find a lot of the trades were being stopped out though shortly after, and I packed it in and haven't looked at it since.

I'm what they call a serial trading system buyer, and I suppose it defeats the whole object of trading a plan and sticking to it. It's a hobby of mine though and suppose it's better than stamp collecting.. ;o)

We also had a good start on the 4 Hour time-frame and are also finding a lot of trades reaching first target then getting stopped at break-even on the second half of the trade. Recent performance is not so great but we are sticking with it for now. It seems to us you need at least one trade a month to be a "runner" for this to pay off.


ReviewTeam - www.systemsfortraders.com

Hi All,

I am a big fan of the LMT concept; It's just brilliant, and I love it. I have read a couple of posts on it here, and it seems some users are NOT using it right...... Why? If you either lessen the Stop loss or trade at the H4 (or any other lower timeframe), you will have two main problems - The system uses the Average DAILY Range to derive the SL, which means you will be on the same time stream as the institutional traders/investment banks. So if you trade it at H4-

1. the SL displayed will be lesser than that of the ADR, it basically ceases to be adrSL, but rather a4hrSL and that means you are using a tighter stop which is more likely to be triggered to force you out of a profitable trade.

2. you are likely to get more signals than trading it on the Daily D1 timeframe within a specified period- So what happens then? You have increased your overall spread cost (i.e broker's commission cost)

Example, over a given period, assuming we both had ?1000 each as Gross profits. If the spread was 4pips, the lot size say 0.2 (equates to the pip value ?20) - If you (trader A) had 5 trades to achieve the above Gross profit because you had 5 signals trading on the H4 timeframe, and the other trader B had only one signal trading on the Daily, D1 timeframe, then the Net profits will come as-

Trader A- [?1000-(5x4x20)]=?600

Trader B-[?1000-(1x4x20)]=?920

Hope you've got the logic here....and even that trader A is more likely to have some profitable trades stopped out due to the inappropriate SL placed.


What's the solution then? You can still have the fast action if you don't mind the cost on spread, but you'll have to keep to the adrSL displayed by the system.

Henry

Thanks for the input, we are also fans of LMT and that's why to date its the only system that has made it onto our "Systems We Use" list. Because, it is, so far the only system we have come across that any of us trade actively without modification.

To be clear, the system can be operated on the 4 Hour and Daily charts, as per the manual. The indicator itself actually adjusts the Stop levels for the lower time-frame. We do not interfere with the recommended Stop or Target levels at all - we trade the system mechanically, and it takes us about 5 minutes a day.

Ideally we would prefer to trade the Daily but, as per our review, we cannot as we need our beauty sleep and on MT4 Daily charts the bar typically closes at midnight.


ReviewTeam - www.systemsfortraders.com

Additional commentary on LMT can be found on this website at this link.


ReviewTeam - www.systemsfortraders.com

I have found this system to be a disaster so I am stopping using it.

I have been trading both H4 and daily charts - the last trade being a short in GBP USD yesterday on the daily.

Probably a bit risky trading FX during December, but this system had been poorly performing before then.

We have taken the decision (during our end of year (2009) review) not to continue trading LMT Forex Formula, more information is provided on our LMT journal page.


ReviewTeam - www.systemsfortraders.com