My Selection Criteria

Thanks for the input. I am not quite sure what profit factor entails. Do you have the definition anywhere? How do you use this to make a trading decision? I know that FXCM gave me a definition of all the terms, including risk factor, when I went on their chat feature but they are not open right now due to the holiday.

The Team Aphid strategy looks pretty good although I am already running a EUR/USD strategy. While they are two different system I'd rather have some diversification within my portfolio. I'd consider GBP/USD but I tend to avoid GBP since it is so volatile. In case you haven't noticed, I am quite conservative when it comes to this program. I've done well in the short time I've had an account and I think a lot of it has to do with that. You can review my previous posts to see what I am running and why I chose the strategies I did.

Personally, I like to wait until a system has done over 50 trades just to make sure the developer didn't get lucky a couple of times. As soon as some of the strategies you mentioned reach this level, I will look at them. The Prosignal Short Term EUR/JPY strategy, however, looks pretty good, this is one I will probably consider in the near future.

Most of the success I've had in my portfolio has been through Technofinanzas. They only make one trade at a time and have been consistenly profitable since I signed up with them. Naturally you need to run a system for a few months to get a good idea of the returns. Week to week there will be some drawdowns, which mostly is the reason why people complain that this program doesn't work. Goodluck with your portfolio!



Quote from superalf:

Hi Guys,

How are the Auto trade portfolios doing? I opened a live account at the beginning of November. My account has been mostly flat, except these first two weeks of December have treated me well. I've made about 8%.

For me the most important factor is profit factor (no pun intended). It gives you an idea of how the DD compares to the profit. My other criteria for choosing a system are Max DD, Profit (in pips), # of trades open, Pips/Trade, and how long the system has been around. Not necessarily in that order. For me it's also important that the sample size be large enough (at least 20 or 30 trades) because the systems with little trades can have a skewed profit factor.

One stat that I have not been able to figure out what it means is "Risk Adjust". You see this in the performance ratings on the fxdd fx-performance site. I sent them an email about it but never got a response. If anyone knows, please let me know.

Here is my current portfolio of systems although it has changed as I've added new systems every month since I joined:

Team Aphid (GBPUSD)
Team Aphid (EURUSD)
Team Aphid (EURJPY)
Dream Machine (EURUSD)
ProSignal-Advantage (EURJPY)
ProSignal-ShortTerm (EURJPY)
Tecnofinanzas (EURUSD)


The Team Aphid system was the one I started with. It was because of them that I actually found out about FX Auto. I had been following their thread on forexfactory.com and liked their work. I demo traded it for a while and liked it. The DD might be a little high for the more conservative, but my risk appetite is higher I guess. The GBPUSD and EURUSD pairs are really good. They consistently make the top 5 or top 10 list in FX Auto. The EURJPY doesn't do as well. I will probably dump it at the end of this month. The DD is too large and overall I have lost money with it.

Now it does open 4 positions at once, but it is strategic. It's not simply increasing your leverage by 4. What it does is it sets a small profit target on the first position (1/4 position) of around 25 pips (varies by pair and volatility). Once this first position closes for profit, the S/L is raised on the next two positions (about -3 or -4 pips from breakeven) and the last position is unchanged. The 3 last positions will all have the same T/P (varies by currency, about 120 - 150 pips for GBPUSD and 100 for EURUSD). The initial stop loss on the entire 4 positions is somewhere between 25 and 50 pips (again depeding on currency and volatility). I like the way the 4 positions are managed. The end result is that it reduces DD and it also allows you to take advantage of larger moves.

Next is Dream Machine. I like this one because it has an extremely low DD. It doesn't make a lot of pips, but it's pretty accurate. It's conservative, but it balances out my higher risk systems. Another thing I like is that it doesn't open a lot of positions, so you're not paying as many fees (spread & commission). Their website was also very informative and it looks good.

I eventually stumbled upon the ProSignal systems. If you go to their website they have a lot of information and statistics. I like the "Advantage" systems because the try to capitalize on positive swap. That helps lower the risk. The EURJPY one seems to be the best one with the highest profit factor. The short term EURJPY system has also performed very well for me so far. These systems have not been around for long, so its a bit of a gamble. Of course I monitor and reevaluate my systems every month.

The last one is Tecnofinanzas. I really like this one. I'm aware that this system is discretionary, but I actually like that. I think it's good that someone is monitoring these trades on the other side. They can react quickly to major global disasters and changes, while a non discretionary system can't. And you can't argue with their results. They have consistently made good results since April 2007. I know, past results are not indicative of future results, but a system with positive historic results is less likely to fail than one with bad negative historic results (over a large sample). This system also helps me diversify as my other systems are not discretionary.

Well, I'd like to hear about your results, whoever is reading this thread and is a part of FX Auto, and what systems you are currently using.
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Hi Pocketjacks,

Thanks for the reply. The profit factor of a system is the profit generated by all profitable trades divided by the losses generated by losing trades. So a higher profit factor is desirable. A profit factor of 2 would indicate that on average winning trades will generate twice as much profit as losing trades. So I like to use this as one of my main criteria since it takes into account not only profits but also losses.

Yeah, I really like Tecnofinanzas. I'm increasing my leverage for this strategy this month, due to the low DD and high success rate.

Good luck with your portfolio, and be sure to keep us updated on your results. I will do the same.
 
Quote from superalf:

Hi Pocketjacks,

Thanks for the reply. The profit factor of a system is the profit generated by all profitable trades divided by the losses generated by losing trades. So a higher profit factor is desirable. A profit factor of 2 would indicate that on average winning trades will generate twice as much profit as losing trades. So I like to use this as one of my main criteria since it takes into account not only profits but also losses.

Yeah, I really like Tecnofinanzas. I'm increasing my leverage for this strategy this month, due to the low DD and high success rate.

Good luck with your portfolio, and be sure to keep us updated on your results. I will do the same.
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Thanks. Have you found the profit factor to point to be successful in picking well thought out strategies?
 
Quote from Pocketjacks:

Thanks. Have you found the profit factor to point to be successful in picking well thought out strategies?
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Yes, I have found profit factor to be useful in picking strategies. It's better than just looking at profit. My cut off point is 1.5 profit factor. Anything less than that, then I don't consider the system in question.

Of course, as we've heard a million times, past performance is not indicative of future performance. So it's not a fail proof method, but so far it has helped me weed out bad systems and focus on the better ones.

I made a 6% return last month! Not too shabby for December, which is normally one of the months with the least volume.
 
Quote from superalf:

Yes, I have found profit factor to be useful in picking strategies. It's better than just looking at profit. My cut off point is 1.5 profit factor. Anything less than that, then I don't consider the system in question.

Of course, as we've heard a million times, past performance is not indicative of future performance. So it's not a fail proof method, but so far it has helped me weed out bad systems and focus on the better ones.

I made a 6% return last month! Not too shabby for December, which is normally one of the months with the least volume.
More...

Thanks for the insight and glad to hear you did well last month. At the moment I am only running the Technofinzas strategy on EUR/USD and it has been quite volatile from the end of December until now. Overall it is holding its own but hasn't done as well as it did in the prior two months. The Prosignal Short Term strategy on EUR/JPY looks pretty good. It has a pretty low drawdown, only opens one position at a time and doesn't trade often. Since EUR/JPY took a nose dive recently, I'm glad it didn't get caught in that mess. I am very conservative and would need to put more money into the account before adding it but I think I eventually will.
 
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