GFX-Trading.com - Mechanical Trading Systems & Forex Signals

01. Why should I use a trading system?
02. Can a Trading System guarantee future profits?
03. How to choose a good trading system and see if it works?
04. How good is your system compared to others?
05. How can we check if your trading system works well?
06. Do I have to inscribe to the system to test it?
07. To which markets does the system apply?
08. What is the Forex market?
09. Why trade Forex?
10. What is a pip?
11. How much is a pip worth?
12. In which pairs does the system work?
13. Will the system be giving signals for other crosses later?
14. Will you release other systems in the future?
15. How long are the positions taken by the system held?
16. Does the system use stop-losses or take-profits?
17. With which leverages should I use the system?
18. When and how are the signals given?
19. Is it possible to trade at different times than those of the system?
20. How many open positions can be held at the same time?
21. Is it possible for the system to invest my money automatically?
22. How does the system know when to give signals?
23. Is there any kind of over-fitting risk on this system?
24. Is the system 100% mechanical?
25. Is the system based only on last day's market behaviour?
26. Is the system composed of regular indicators or methods?
27. Does the system have trades with negative results?
28. Do I need to follow the trades exactly as the system gives me?
29. Do I need to open a Forex account with you to get the signals?
30. Do I need to buy programs or have charting services?
31. What kind of support do you offer to your inscribers?
32. Does the system take in account news or reports into its decisions?
33. May some problems or delays happen with the the emails sent?

01. Why should I use a trading system?

Well, many people have discovered that it's not so easy as they thought to get rich investing. If it were, all people would be rich. So there is a problem in that. Lots of people have money to invest but they just don't know how to do it.
Usually the best way to analyse the markets is using Technical Analysis to do it, and to study charts, their historical data, technical indicators and mathematical and statistical analysis, in order to predict with some accuracy future price movements and that way do better trades. If there is a possibility to make money only analysing charts and taking them into consideration, it's also possible (although difficult) to make a trading system, a fully automated mechanical trading system, which analyses the charts and makes decisions on them to give trading signals that would reveal profitable in the future.
So, it's possible to do those systems, but there are not many of those with good profits. Those who have, if used, and if they continue to make profits as in the past, could give their users the chance to do better trades.
There are mainly three emotions that affect human decisions on his trades: Greed, Fear and Hope. All people sometimes lose money being long on an asset and watching it fall and hoping it will recover (Hope), or close a position too soon afraid they would lose more money (Fear) or even not closing the position in time because they want to earn more (Greed). So the only way to follow the Technical Analysis in a way totally free from human emotions is to follow the decisions made by a machine.
A machine doesn't have emotions, neither commits mistakes based on those emotions, and doesn't get indecision in its trades. So, if we have a profitable trading system that has lots of profits on the past, and if it happens that it continues to make them in the future, those who would use that system would get close trades to those that the system would have and that way close profits to those of the system.
Using a trading system would also eliminate the stress feeling that all traders have while investing or wondering about if their trades are the right ones or not. For those who like to do daytrading, a trading system could help by giving them indications on where the trend is (in daily or hourly time-frames) and would permit them to be always on the same side of the trend that a trading system with good profits on the past had. There is a rule on the markets that say we should never be trading against the trend, so a trading system can tell us that trend and avoid daytraders to do some of their bad trades. Check the system section for more information about it.
Conclusion: With a trading system, a client can have a 100% fully mechanized trading, without any of those human emotions that makes traders do mistakes and without any stress. Also, traders with no experience in making profit in Forex markets or other markets can find on a trading system a way to multiply their investments without having to specialize in Technical Analysis. Experient traders can use also a trading system as a valuable trend indicator to know if they are on the right side of the trend, or even to filter their trades, doing only those who are at the same direction as the one the system has.

02. Can a Trading System guarantee future profits?

No. No trading system, as well as no human being can guarantee future profits on these investments, because for that, it would be necessary to predict the future. There is no way to know if a quote will go up tomorrow or down. That's why the market is so erratic. If it would be easy to predict it, it wouldn't be so erratic because all people would enter and leave it at the same time making it having an easy repetitive pattern. This doesn't happen; markets are erratic and very unpredictable.
So, if markets are so unpredictable, what distinguishes a trading system from the others? Why should we choose one instead of the other? The answer is simple: How do we choose a mutual fund or an investments' specialist to invest for us and not others? We choose those who give us more results and proofs of their capabilities. If a mutual fund is giving an yearly average of 8% in a 10 years average, and another one is giving 15%, why should we choose the 8% one? We would logically choose the best one. Nothing would guarantee that the 15% one would be better this year than the other, but it would have without a doubt more chances to be the best one of the two, than the other. Also even if it wouldn't be the best of the two on that year, it would have also more chances to be the best one on the following years, because it was the one with more experience and given results and better average for the last 10 years.
With trading systems it's the same thing. Why choose a trading system with unstable results, which gives profit in one year and nothing on the next one when we could use one that usually gives profits in a more consistent way? Why choose one that usually does 8% profit average if we can use one that gives 3 or 4 times more? Simple, in trading systems, like in mutual funds or brokers we choose those who have more profits on the past and prove to be better. We can also try a trading system to see its performances, and stay with the best one.

03. How to choose a good trading system and see if it works?

We can choose a good trading system by analysing the way it works, its past results and profits, the way its gains rise (in a constant and less risky or in an inconstant and risky way), by speaking with others that used them or are using them, and also by use them for a period to check if we like their behaviour.

04. How good is your system compared to others?

First of all, we must know one thing: the Holy Grail system (something which almost only gives profits and guarantees richness to the user in few time) doesn't exist. There are good systems, not so good systems and bad systems. We are proud of our system's performance, and if you search for systems on the Internet, you'll notice a lot of systems that in 3 years have given only 2,000 to 4,000 pips of profit on the EUR/USD cross, and our has given more than 10,000 (even 14,000 in the regular mode) and only on EUR/USD cross (we say this because lots of sites present results totalizing all crosses together to mislead traders), so we're proud to say that we consider our system up to our expectations.
Notice that those systems we mentioned on the Internet (those that have usually 2,000 to 4,000 pips only instead of our 10,000 to 15,000 in 3 years on EUR/USD) use to have sometimes inscription costs up to 2 and 4 times greater than ours and with less results.
Notice that also, the majority of trading systems don't present results with higher leverages sometimes because they use to fail there and can't stand higher risks, which is a proof of their lack of security. Some of them don't even present results in percentage, presenting only on pips, which is sometimes a way to hide their real performances that can be bad. As an example we can see that, even if a system would have a performance of 20,000 pips in 3 years (10 times more the average pips on the market and 2 times more than our system, which is impossible for a fully mechanical trading system), if that trading system with all that profit, had only 2 or 3 falls in a row hitting a margin-call of 80%, they would have real results of less than -90%, in spite of having such a large number of pips of profit. That's why we exposed our trading system in pips and percentage also and with higher leverages. So it's left to the inscriber the decision to like it or not.

05. How can we check if your trading system works well?

The trades being done in real-time by the system are the same to those exposed on the website, and so its results, and that way you can check the system's real performance.

06. Do I have to inscribe to the system to test it?

Yes, you have to. The system signals are on a restricted section of our website so only inscribers can access them. Anyway you can check its past results to see its behaviour and performances.

07. To which markets does the system apply?

Our systems are applied to the Forex markets (Foreign Exchange). Currently in the EUR/USD cross only.

08. What is the Forex market?

FOREX: These initials stand for FOReign EXchange, and it's the largest financial market in the world, with a daily volume of near $2 trillion dollars, dealing in currencies, where the most traded currency is the Euro/USD cross. It is the largest financial market in the world, having more than 30 times the daily volume of the NYSE and NASDAQ markets combined. This market has no physical location, and it works basically like the Internet being a truly global market working 24 hours a day non-stop all over the world and 5 days a week. Forex is part of the bank-to-bank currency market known as the 24-hour Interbank market.

09. Why trade Forex?

Some of the major reasons are:
- Availability:
It's open 24 hours a day, 5 days a week, so we are able to make trades and win money any time we want. It's a market without overnight gaps or interruptions and a trader can have profitable market conditions at any time;
- Liquidity:
It's the most liquid market in the world, having around 33 times more liquidity than the New York Stock Exchange and NASDAQ together and trades are always executed and in seconds;
- Accessibility:
It's a market where most brokers charge no commissions for trading on Forex. Some brokers also let the investors to open accounts with no minimum amount required, and others with minimums of around $100 or $300 only. It's possible to trade in some brokers with as low as $0.1 amounts;
- Leverage:
In the Forex markets, traders can leverage easily their investments with as high as 400/1 leverages or more (anyway it's recommended not to go beyond the 10/1 level of leverage);
- Short Selling:
Possibility of taking short positions (make profit with price falls) as easily as long ones without any worries;
- Tools:
Easy access to free tools, demo accounts and online quotes with very good quality and speed, in many places.

10. What is a pip?

The pip designation refers to the smallest amount that an exchange rate can increase. It has the same meaning to the "tick" term used on the futures markets. It can vary its size but a pip value is usually 0.0001 (like in the EUR/USD cross). As an example, a move from 1.2100 to 1.2110 in the EUR/USD cross would have been a 10 pips movement.

11. How much is a pip worth?

First we need to know how much value does a pip have in percentage. A pip's value in percentage is calculated by multiplying the cross rate's value per 100, and then dividing the leverage value by that number. So, a pip value on the EUR/USD cross that has a value of 1.2100 with a 10/1 leverage is calculated like this: 10/(1.21*100) which would give us a result of around 0.0826%, so a pip value with a 1,000 capital, would be 1,000*0.0826, that means US$82.64 at 10/1, or US$8.26 at 1/1 leverage. So at a 1.21 EUR/USD rate and with a US$1,000 investment, a 10 pips move would be worth around US$82 at 1/1 and US$826 at 10/1. There are brokers that let us trade freely any amount we like, and others where we can only trade in contracts or mini contracts with fixed amounts.

12. In which pairs does the system work?

Our systems at the moment only work with the EUR/USD cross, for being the most liquid and traded cross.

13. Will the system be giving signals for other crosses later?

We're thinking about preparing this system to give signals for other crosses also in the future. At the moment we're checking the system's performance in other crosses as well as other systems so we can check their profitability. Keep informed visiting our site for news or sign up for news (in this case signing up on our affiliate program).

14. Will you release other systems in the future?

We may think in releasing other systems to the public in the future but at the moment we're thinking in using this one, while the others are still in real-time tests. Keep visiting our site for news or sign up on our affiliate program in order to receive emails in the future about news from GFX-Trading.com.

15. How long are the positions taken by the system held?

The system's positions may be held for months, weeks, or days in the daily time frame or for weeks, days or hours in the hourly time frames. It depends on the time frame used. As this system doesn't use take-profits neither stop-losses (it's the system that decides when to enter or leave a position, although margin-calls were taken in consideration to the tests and charts exposed), trades can be held for many time (if the system decides that's the best option), or for little time if there are fast turns on the market or moves that are considered fakes by the system.

16. Does the system use stop-losses or take-profits?

Please check our system's explanation on its section "About the systems". Anyway our system decides when to enter and leave the market and as its performances are positive in a 3 years period even with a 100/1 leverage (taking in the equation the margin-calls at 80%), and as we recommend only a 10/1 leverage (beyond that is much more dangerous), there's no use for take-profits and stop-losses to achieve the system's gains, but it's always to the client and his way to use the system, to decide whether to use them or not. If you want to follow the system without any human influence, don't use them.

17. With which leverages should I use the system?

Please avoid using the system with more than 10/1 leverage. The daily system is suitable only to a 10/1 leverage maximum because it can be months without giving a new signal, and the hourly system has given profit with bigger leverages but it's not recommended to use more than 10/1 in it, check for the system's section to read more about this. Anyway for experienced traders it's up to them, which leverage to use.

18. When and how are the signals given?

Signals are given by the system as soon as it decides to open a new position or exit the current one. Those positions taken by the system are only assumed on the beginning of each hour. At that moment, the pages containing the system's signals on the restricted area will be updated, as well as emails will be sent to the system's inscribers on the same minute that the order is assumed. The system's histories of orders are also updated automatically on that same time, as well as the last orders are sent by email to the users also. The Daily, Monthly and Yearly email reports will also contain data about those orders so that the user can follow its performance.

19. Is it possible to trade at different times than those of the system?

Yes, but it would affect its performance (considering the case where you would want to follow its instructions in a 100% precise way). The daily system, as it has a good average of profits (around hundreds of pips per order), would have given profits even if we had entered on the market 50 pips late. On the hourly system, as it gives more orders, it would be dangerous to constantly keep entering the markets too late but sometimes would not affect the performances much. Anyway when someone executes one trade late, he could get a worse or better price, but it's something to try to avoid.

20. How many open positions can be held at the same time?

The system always has a position opened at the daily time frame (short or long) and can have three positions open in the hourly time frame (short, long or out). So the investor can decide to use the daily signals (fewer profits but less orders) or the hourly signals (greater profits but more orders are given). It can be used with both systems at a time to take one decision also (doing a trade only when signals on both time frames have the same position), or they can be used with two different parts of the capital to invest (having some money invested in long-term and another part of it in short-term trading). It's to the investor the decision on how to use the signals.

21. Is it possible for the system to invest my money automatically?

It is really possible for the system to invest alone in a 100% automated way, through our software, created specifically for that effect. Using our software, it's enough for the user to install it on his machine, and he could let his own computer invest his own money in a 100% automated way, even when he is at vacations, and this way have the approximate results as those of the system without having to act manually. To know more about it, click on the "AutoTrading" option at left, or click here.

22. How does the system know when to give signals?

To understand better this question, please refer to the "The System" section of our website.

23. Is there any kind of over-fitting risk on this system?

No. There is no kind of over-optimized or over-fitting risk on the system. These over-fitting problems occur when some trading system developers search the best values in many variables in a past historical data, in order to have the best results possible on a trading system and present them thinking the system would continue this way in the future. There can't be anything more wrong than that. Curve fitted systems only work well for the past but doesn't have predicting capabilities for the future.

It's easy to make a trading system giving profit in a past historical data, because those best values would be searched, but naturally in that case the system would fail in the future. Our systems are based not on specific behaviours of some crosses or part of their historical data, but in mathematical and technical analysis and methods, and for that reason, the same system works without being changed in its programming, very well for any cross or time frame.

As an example we can give our system at this moment. The same system is used nowadays for the EUR/USD daily and hourly time frames without being modified, and it will be applied in the future for other crosses also (requiring yet some testing first to be fully operational).

There is only one difference between those 2 systems; it's the system's parameters. A system can't work with the same parameters for those 2 time frames so they had to be found with tests.
Now, the tests made on system performances are made like this: In each of them there was a period of data in which the tests were made. In daily tests were made between 2001 and 2003, and in hourly candles between February 2002 and July 2003. Values were found there and since 2003, the system is working until nowadays with those values found on that 2001-2003 testing period, being until now with profits as can be seen on the system performance section without any other kind of recent optimization. We are planning to do an update maybe in 2006 to keep it working the best way possible. So as can be seen, the system is giving those signals in real time without any kind of optimization.

24. Is the system 100% mechanical?

Yes, the system is 100% fully mechanical. It's a pure 100% mechanical trading system. It is based on Technical Analysis only without any kind of human influence. So the influences of human emotions like the famous Greed, Fear or Hope are removed from the trades. The system can even look too cold sometimes but it's an automated system so it's natural for it to work that way.

It's not a mechanical group of instructions that a group of people may interpret and use to give the signals or even filter. That would put the possibility of human failure on the equation. The system is working non-stop 24 hours a day, 5 days a week, analysing data at the second, so when it decides to open a trade, it will update in a fully automated way our website's database and results table, so that clients may get access to them. The only role of humans in this system is to check if it's working well and avoid possible problems on our servers like connection problems and others, so we can direct our human resources to clients' questions in case there is some unexplained question in this FAQ or other matters.

25. Is the system based only on last day's market behaviour?

No, it would be bad to take a decision based only on the last day of trade. If it is difficult already for investors to predict future moves with big historical data sources, doing it with only one day would be impossible to achieve good performances even in mid-term periods. The system is based on Technical Analysis, and it's not based only on last day behaviour but in determined periods of past days behaviour on the market, studying of course also the last value to decide its positions.

26. Is the system composed of regular indicators or methods?

No. This system is using some unknown and new methods developed by GFX-Trading.com as well as some of their indicators developed also by GFX-Trading.com. So it's impossible to find the exact entry and exit points of this system with those indicators known to us all like stochastic oscillators or moving averages, etc. If regular indicators and methods would give these kinds of performances, all people would have a trading system with these performances and would not need to search for one on the Internet in the first place.

27. Does the system have trades with negative results?

Yes. There is no trading system or man, capable of doing trading everyday without losing sometimes. For that it would be necessary to be able to predict the future with 100% accuracy. This system has its bad trades, there are times where the market becomes erratic for a while, and during those times the system may tend to fail more. The purpose of a system is not to have only good trades but to give profit in the mid to long term. It has a positive, good results and balance with time; it's not intended or possible for it to give profit everyday without bad trades. So if sometimes the system may seem to have given a bad trade, remember, that after the trade being happened, it might be easier to think it would be avoidable than at that time it was decided, but there's always that point: it's not possible to predict the future, so this system has also its bad trades like any other, but what counts are the end results.

28. Do I need to follow the trades exactly as the system gives me?

No. If you want to eliminate human emotions from trading to try to have better results and less stress, you should follow the system signals by the prices it gives you (or better prices). You can try to follow the system but entering in better prices but that could make you lose good entry points (imagine you would want to wait until it falls a little more before entering a long position and it would rise and you would lose a good entry point and have less pips in that order profit later). On the other way, it could increase a lot your profits if you entered with an advantage of only 3 pips in each trade. You can use the system in a third way: for consulting purposes. Imagine you do daytrading, and want to be on the side of a system that usually does the right trades. Then you can do your day trading trying to be always on the system side, eliminating that way much more bad trades on your daily trading. Of course this way your results could be much more different from the system's performances.

29. Do I need to open a Forex account with you to get the signals?

No. There is no need for that to happen, neither it would be possible nowadays to put the trading systems managing directly the inscribers money. The signals are given and the client decides where to use them, and how to use them (in a 100% mechanical way or for consulting purposes only).

30. Do I need to buy programs or have charting services?

No, GFX-Trading.com provides its clients all they need to invest: the signals. Clients can check our signals and behave accordingly with them, they can use the charting their brokers provide there is no need of additional software or services.