FuturoFX Goes Multi 14


Ciao a Tutti,

today we have some pretty good news for all FuturoFX customers. Good news #1: we are releasing a free update on next Monday with a new important feature called “multi-period”. Good news #2: it is a couple of weeks now that we are testing an EA based on this feature and it is churning pips like a little monster.

Let me explain first what this “multi-period” feature means. In the current version of FuturoFX we have a single “look_back” period input parameter. If look_back=120 (this is the default value) then FuturoFX explores each and every block of 120 bars in the history looking for decent correlation scores with the most recent 120 bars. If you open 4 charts of the same pair and attach FuturoFX indicator to each of them, specifying different “look_bak” periods you will notice that the “Best Projection” and “Average Projection” can be pretty different from chart to chart.

This makes perfectly sense, because each time we select a different “look_back” period we are exploring the fractal nature of price action with a different “lens”. How to make the most sensible trading decision then? The idea I had a couple of weeks ago is that when multiple look_back periods agree on the same sort of outcome for the future, then we have a reliable trade setup to work with.

Therefore I considered the average of “long target” and “short target” of all the charts opened with FuturoFX (same pair and same timeframe, of course). The result is a horizontal “channel”, with the upper line meaning an average long target, and the lower line meaning an average short target. When price gets close to the upper line that means multiple FuturoFX instances with different look_back periods agree on the fact that there is still a good potential for the price to go down, while there is a negligible potential for the price to go up. Viceversa when price gets close to the lower line we have a good setup for a long trade.

On next Monday you’ll be able to display this “channel” with FuturoFX and to start looking at these very reliable trade setups for yourself. This is not just our “feeling” that they are reliable. We have coded this very same logic into an EA that works on EURUSD M1 chart and it has been producing some pretty amazing trades since the beginning. Honestly it is the best scalper EA we have seen working in our career as Forex traders and MT4 developers. It has produced from 20 to 100 pips per day each and every day. We believe the quality of trades it executes is a clear proof that all this “Theory of Correlation” FuturoFX is based upon actually WORKS. It really gives you a sensible edge for trading the markets.

These are the +45 pips it already banked in the first few hours this morning after the London opening:

You can notice this EA does not try to follow the trend after it started, it actually anticipates the next trend! This is exactly what we had in mind when developing FuturoFX :-)

Yesterday morning we setup our first official testing environment for this EA and it has done a pretty good job in the first 30 hours :-) This is not big surprise for us since we have been seeing trades like these ones for a couple of weeks now.

We really hope you can use the upcoming new version of FuturoFX indicator to make some great trades too 😉


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14 thoughts on “FuturoFX Goes Multi

    • Paolo Post author

      Hi Tim, thanks for your interest. We have not a price tag for the moment. The EA will be under test for some time before we decide to release it (probably in early 2013). For sure we’ll grant a special price for customers who already own a license of the indicator before the EA is released.

  • Dan

    This is very interesting.

    I’m surprised how many valid signals you seem to be getting in that test using just 1 pair and timeframe.

    I have some questions:

    1. Would you use it only during european trading hours or all day long?

    2. Have you tested different timeframes? Could you conceivably have it running on 7 timeframes simultaneously from M1 – D1?

    3. Have you tested other pairs? Would they get as many good signals as eurusd?

    4. Have you thought about a black swan / dramatic news situation which would override the correlation? Without a stop loss and a large pip movement in the other direction you could be in real trouble. Would you use an emergency stop loss for these situations?

    5. Another idea could be to set the EA to use trade sizing as percentage of account which would allow it to compound nicely even on an intraday level. :)

    Thanks

    • Paolo Post author

      Hi Dan, thanks for your interest and for bringing up many good points.
      1) We only trade it for 10 hours a day starting from London opening, this is a strategy mostly based on reversals and it needs lots of liquidity.
      2) We only run it on EURUSD 1 minute chart. I think M1 is the only timeframe for trading this strategy based on the breakout of the “channel”. I trade manually a similar strategy on the H1 timeframe, but we rarely get a real breakout on timeframes higher than M1.
      3) I guess this EA can work also on other pairs with good liquidity and low spread. We are going to forward test it also on GBPUSD and EURJPY.
      4) I’m implementing these security mechanisms right now, because I want to trade it live with some real money (not microlots) soon. I’ll probably put a 50 pips hard stop loss and 100 pips hard take profit on each trade. I’ll also put a 75 pips cumulative “soft” stop-loss and a 150 pips cumulative “soft” take-profit. In case either stop or profit is hit the trading is halted for the day.
      5) I think it is always best to compound “manually” (increasing the lot size) after we see real results in a one or two months period.

  • Jef

    Ciau Andrea And Paolo,

    Wrt Dan’s remarks on the S/L above, isn’t it an option to incorporate a Crescendo kind of situation whereby the EA adds trades in a loss situation every so many pips with the choice of different Martingales like Linear, Fibo, etc. This way price doesn’t have to return to its entry level to still make a profit. Possibly with a hard S/L on the total outstanding trades in % of the equity. I’m still a big fan of Crescendo, as you can see.

    Cheers,
    Jef

    • Paolo Post author

      Hi Jef,
      thanks for your feedback :-) This FuturoFX EA can do both averaging down (like Crescendo) and pyramiding, according to different trading scenarios. It never pretends to close a single trade or a set of trades at a specific profit level, it just closes them when it judges it is the right moment to do so (either for an overall profit or a loss). Running on a M1 chart I think any Martingale approach is too risky. Therefore the trades are always the same lot size and it never opens more than 3 trades (either when averaging down or pyramiding).

    • Paolo Post author

      Hi Jason, thanks for your interest.
      I’ve backtested FuturoFX_Trader on H4 charts of EURUSD, EURJPY, AUDUSD, GBPUSD, GBPJPY from 2004 to 2012.
      The first trades get opened at the beginning of 2007 because it needs some historical data to work with.
      All the equity lines are net positive, with profit factors ranging from 1.25 to 1.75.
      So the EA looks promising, since it was able to gain under very different market conditions 😉
      We are still tweaking the code and working on backtests on different pairs/timeframes.
      The current version relies almost exclusively on the “multi-period” feature of FuturoFX v2.

  • Jurriaan

    Hi Paolo,

    Thanks for the update, I’m really looking forward to hearing about your first test results with FuturoFx EA.

    As you stated earlier that the M1 timeframe was the only suitable timeframe for this strategy, I assume that the H4 backtest was only meant for theoretical purposes? Or would the EA be usable on other timeframes than the M1?

    Thanks,
    Jurriaan

    • Paolo Post author

      Hi Jurriaan, in the beginning I thought that M1 was the only suitable timeframe for this strategy, but after a while I realized I was wrong. The H4 backtests have shown that the “breakouts” needed by this strategy happen quite regularly also on higher timeframes. I still believe the EA can work as a scalper on M1 timeframe, but it probably needs some manual intervention around big news releases. Otherwise it needs some “max loss” feature that stops the EA when big spikes or very sharp trends occur, and in such case also stops the trading for the current day.

  • Francis

    Hi,

    I am interested to try out the FuturoFX_Trader EA. Can you advise me of the price and the availability please? Thank you.

    Francis

    • Paolo Post author

      Hi Francis, FuturoFX_trader is a good EA for the H4 timeframe on several pairs, we’ve not yet released it because we’re trying to make it work better also on smaller timeframes.
      As always the customers who own a license of the indicator will get a discount if they decide to buy the relative EA.
      Ciao,
      Paolo