I've been tempted by this and Secret Forex Trader (I'm such an Agora junkie) - I look forward to Riftvalley's updates too!

Hello Reviewteam,

In reference to your results, is it possible to know how many pips this system has won and lost for you so far?
I always find this method more helpful to me, in order to work out if this is a system I'd like to buy

Thank You

Raj

Hi Raj,

Because some were in real-time, some were backtested and some were done retrospectively we do not have exact S&P point figures for all trades. For example when backtesting we used the Fib lines to check which levels would have been hit, Stop/Target 1/Target 2. From this we could then provide a universal performance based on actuals and those that we did not actually trade. But, it is the percentage return that is important when judging a system or service. Never, ever, base a system/service performance on pips. We will explain via a very primitive but useful example:

System 1 returns 500 pips a month, System 2 just 120, which one do you choose? System 1!

No, System 1 has a Stop loss of 1000 pips per trade, System 2 has a Stop loss of 40 pips per trade. So assume 2% risk per trade. System 1 has returned 1% and System 2 has returned 6%.

Hope the above is useful to you.

HI All just a quick update,

USD/CAD - 44 pips, and 27 pips (.618 and .382 levels respectively)
USD/JPY - 25 pips (went the opposite way to the trend so only the .382 level fired)

GBP/USD still within the ISD range, not sure whether to delete the orders or let it run - I will have a think!

So 96 fairly safe pips!

I also notice that FTSE100 and AUD/USD are now within the 10% range (sell) and that the USD/JPY has built up a huge buy divergence.

I will set these over the weekend

Originally Posted by Reviewteam

Hi Raj,

Because some were in real-time, some were backtested and some were done retrospectively we do not have exact S&P point figures for all trades. For example when backtesting we used the Fib lines to check which levels would have been hit, Stop/Target 1/Target 2. From this we could then provide a universal performance based on actuals and those that we did not actually trade. But, it is the percentage return that is important when judging a system or service. Never, ever, base a system/service performance on pips. We will explain via a very primitive but useful example:

System 1 returns 500 pips a month, System 2 just 120, which one do you choose? System 1!

No, System 1 has a Stop loss of 1000 pips per trade, System 2 has a Stop loss of 40 pips per trade. So assume 2% risk per trade. System 1 has returned 1% and System 2 has returned 6%.

Hope the above is useful to you.

Yes, very useful. Thank You

Originally Posted by Reviewteam

Hi Raj,

B
No, System 1 has a Stop loss of 1000 pips per trade, System 2 has a Stop loss of 40 pips per trade. So assume 2% risk per trade. System 1 has returned 1% and System 2 has returned 6%.

Hope the above is useful to you.

IMHO this can be a problem for many traders. I always calculate a risk reward ratio - usually based on my ratio of the stop level to the expectation of profit. I think that there is another factor to bring in however, and that is the probability of success. If I traded purely randomly then my probability of success is 0.5 (leaving out margin) over enough trades. However, if I can boost the probability of success then that becomes part of the decision process whether to trade or not. so I generally tend to trade on key levels (that I maintain) of risk/reward multiplied by my expectation of success. With the ISD triangle I have a high expectation of success as eventually the price must break out of the triangle and whichever way it goes I am likely to make a profit (albeit small) the issue here, of course, is to make sure that the opposing bids are cancelled in good time.

Of course for trend following trades the above logic fails as there is no limit value, my trading is a mix of trend and retrace which works for me.

Riftvalley

Hi reviewteam,

Are you using capital spreads to trade the s&p?

Hi raj,

We typically used Ava FX when trading the S&P as we were on tiny stakes as we were just conducting a review.

Hi All

I bought the GCode system last week and was very impressed by what I read. Being a programmer I realised that it would be very easy to write a program to find all the ISD triangles.

I wrote the program to search all FX pairs which can be traded on IGIndex. Next I performed some backtesting from the 20th of December 2010. (I could only get hourly data that far back which I used to see if it broke out of the triangle and hit the stop on the same day, if it hit the stop after it broke out.)

The results are promissing, but I'll continue testing through January.

Quick summary:
All FX pairs:
99 trades, 64% winners
1761 pips won.
Biggest winner - 981
Biggest loser - 408

Trades with a stop loss of 40 pips or less:
24 trades, 100% winners
487 pips won
Biggest winner - 36
Biggest loser - 0

I'll also start backtesting a number of indices soon (FTSE, SP500, DJI etc).

I'm considering launching a service to email all ISD triangles found each morning to my subscribers. Anyone interested?