While the AutoTrader platform will do 90% of the work for you, it is still your responsibility to do the other 10%, which is to choose the right trading strategies and money management for your portfolio. Choosing the right strategy for your portfolio is a very important strategy in itself and can make the difference between losing big and winning big. We care about your long-term success and that's why we have dedicated an entire page to this subject. 

How to Evaluate Strategies:

Since we do not understand the mechanics behind the strategies offered by other signal providers, it is difficult to recommend any specific strategies other than our own. However, the techniques below will help you evaluate them all for inclusion in your portfolio. Following are the most common methods used to evaluate a trading strategy: 

1. Average Profit per Trade: We feel this is one of the quickest and easiest ways of spotting the best overall trading strategies. If a strategy has a high average profit per trade, this not only means it has been profitable in the past, but we believe it means that it's able to make back losses more quickly.

2. Profit Factor: Strategies with a high average profit per trade usually have a high profit factor as well. This value is the profit generated by profitable trades divided by the losses generated by losing trades. A value of 2 would indicate that twice as much money was made from winning trades than was lost from losing trades. In our view, strategies with a profit factor of 1.5 or higher are considered ideal.

3. Profit vs. Max Draw Down: The Max Draw down is an important statistic but only when compared to the amount of total profit the strategy has made. In our opinion, strategies with a high profit factor will usually have a very good profit to max draw down ratio so looking at the Profit Factor alone is a quick way of finding strategies that have small Max Draw Downs relative to total profit.

Risk/Money Management

For accounts under $20,000, we recommend that you never risk more than 2% - 3% of your account value per trade and don't trade more than 1 strategy for each $2,000 in account equity. To know the amount you are risking per trade in the AutoTrader platform, generate a historical trade log in the Portfolio Builder and look at the largest loss taken on each trade within a specific strategy and multiply it by the number of MAX positions the strategy can open at a time. The Max Positions is listed under "Available Systems" in the "Portfolio Builder" section of the platform. For example, our EUR/USD strategy risks 105 pips per trade (with spread & commission) but it usually opens 2 trades at a time, each with a different profit target. Therefore, this strategy actually risks up to 210 pips per trade (105 pips x 2 positions = 210 pips risk). Trading our Short-Term EUR/USD strategy with a single 10k lot means you are risking $210 per trade or 2.1% per trade on a $10,000 account. A $5,000 account would be risking 4.2% per trade, which exceeds the 3% maximum risk recommendation. Accounts with less than $10,000 equity should avoid trading strategies that risk more than 150 pips total per trade with the Max number of positions opened on each trade. For example, if a strategy has a 150-pip stop-loss and opens a maximum of 4 positions, this is a 600-pip risk. Therefore, small accounts should avoid trading strategies that have a Max Position of more than 1 or 2 (depending on the size of the stop-loss). In addition to this, your MAXIMUM risk exposure on all trades combined (with open trades on every strategy) should never exceed 10% of your account equity. Please note that due to slippage or technical difficulties with the software you could lose a lot more then your desired stop loss. See our risk disclosure below.

Money Management Strategies

In the AutoTrader platform, you have the option of using 3 different Money Management strategies. These are Fixed Lot, Fixed Ratio, and Fixed Risk. Here's a brief explanation of each...

1. Fixed Lots: 

This is the simplest of all available money management options. We recommend this option to anyone who is new to Forex or Money Management. With this Money Management option, you set the number of lots you would like to trade "per position" for each strategy. No matter how much your investment decreases or increases, you will still trade this fixed number of lots per position.

IMPORTANT: Keep in mind that if a strategy has a "Max Position" of 6, this means it can open up to 6 positions at a time with of your selected number of Fixed Lots. For example, if the Max Positions for your selected strategy is 6 and you set it to trade 20k lots,  then it can open up to 6 positions x 20k, which equals $120k in combined trade volume at any given time.  Many of the strategies on the AutoTrader platform will trade their maximum number of positions a majority of the time so pay special attention to each strategy's "Max Positions", which you can view in the performance section Portfolio Builder. This applies to all 3 types of Money Management Strategies on the platform.

2. Fixed Ratio: 

This is more complicated and flexible Money Management technique. We recommend using this option only to advanced traders.

With this option you set how many lots you would like to trade for every x amount in your brokerage account. This simply means that you will be able to increase or decrease the lot size in accordance with your account performance (profits or losses)

Example: $10,000 and wishes to increase the lot size by 10k every time the account shows a $2000 profit. So when the balance reaches $12,000 the lot size changes to 0.2 (20K) and so on.

PRO’s: Excellent for large account trading multiple and complex strategies whereby the account is prone to adverse and volatile balance swings.

CON’s: Not suitable for smaller accounts trading small number of pairs, client can manage positions and leverage more efficiently through Fixed Lot method

3. Fixed Fractional: 

Fixed Fractional method is another advanced Money Management option. This is a complicated method for beginners, so we advise using it with caution.

Fixed Fractional technique allocates a percentage of available account balance that could be risked on any particular trade.

Important Note: The stop loss of the trade needs to be predetermined for the software to calculate the lot size to apply to the trade.

Example: The Fixed Fractional setting only calculates the leverage* based on the stop-loss you enter for each trade but it does not account for the max number of positions. Therefore, if the strategy has a Max Position of 4 with a 100 pip stop and you want to risk a max of 1% per trade with all 4 positions open, you will need to enter 400 as the stop-loss for the proper calculation. That way you are only risking .25% per position but 1% when all 4 positions are open.

PRO’s: Gives more flexibility of managing available balance compared to Fixed Lots technique.

CON’s: Needs to have predetermined stop-loss and does not account for the max number of positions.

Note: The demo accounts only offer 1 type of money management strategy, which is Fixed Lots. When trading on a live account with real money, you will have all 3 money management strategies to choose from.

Watch and Wait!

Once you have added your chosen systems to your portfolio and pressed APPLY, the trading platform will now automatically execute trades according to the systems you selected. Realize this does not mean the minute you apply a strategy you will be in a trade. You must wait for the next open position to occur, which could be several hours or several days depending on the system(s) you have selected and what positions those Systems are currently in. The next time any of the systems you have applied to your portfolio trigger a new buy or sell signal, this position will be automatically opened in your Brokerage Account.

ProSignal Strategies

ProSignal's Short-term strategies were added to the platform in August, 2007 and the others were added in September, 2007. However, the real-time performance of our Short-Term strategies, prior to being added to the AutoTrader platform, can be viewed by generating a performance report on our Premium Charting Software.  The ProSignal-ShortTerm EUR/USD strategy on the AutoTrader platform is a combination of our 1-Hour Scalp and 30-Min strategy, which is why it takes up to 2 positions simultaneously. With a mere 35-pip profit target and 100-pip stop-loss,, the EUR/USD strategy takes advantage of intraday market noise. Most often, market noise alone will trigger our profit target even if general market direction is wrong.

ProSignal Stop-Losses

To accurately calculate your risk per trade, the ProSignal strategies use the following stop-losses, which include 5 pips for the dealer's spread. Please adjust your leverage and risk exposure accordingly: