This article is a continuation and update of my earlier evaluation of the Forex Trading Machine Forex Runner strategy.  This is short term EUR/USD forex trading strategy.

In order to evaluate it realistically, I’ve traded this with real money on a live account.  I’ve now been doing this for three weeks, and this is long enough to make an informed evaluation of this strategy.  Is this strategy for you, or not?  Read the rest of this article to see how this strategy works in real life.

In summary, whilst I believe the basic principle is quite sound, because it is simple and requires no complex indicators, most people will have problems due to the trading rules not being aligned to market volatility.

I’ve followed signals carefully and the trades have been placed during active times in the EUR/USD market.

The overwhelming issue has been an entry signal being triggered, only to result in a rapid adverse move, being stopped out based on the recommended stop loss figures, then the position rapidly reversing.  This has resulted in more losses in a row than I would be comfortable with. However in less volatile trading situations where the market is trending, it seems to work quite well.

In summary, the Forex Runner strategy performs well when the market is smooth and trending, but poorly when it is very spiky and volatile.  The following chart shows a market where it did not perform well in:

The second half of the chart gives multiple entry signals, but the rapid reversals cause quick losses.

If I was modifying this system myself, I would include a volatility based filter, perhaps a visual filter to identify whether the system should be in the market or not, based on whether the market is just fluctuating randomly, or actually moving up or down.  This system trades of 5 minute bars, so in this situation, ten minute bars may be more suitable.

In evaluating the actual Forex Trading Machine product, I still believe that the other strategies included in the product offer good value and it is worth the price simply for these and the educational content.  Unlike some competitors, it is reasonably priced, fully disclosed and not a scam.  If you buy it for the Forex Runner strategy, you will have to use some discretion to avoid a series of losses.

If you are interested in purchasing the Forex Money Machine, you can do so here.

Tags: Forex Trading, Forex Trading Machine, trading system

This entry was posted on Saturday, April 19th, 2008 at 4:03 am and is filed under Trading Systems. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.