FX Quant > Trading Signals

Trading signal service is no longer available. The information below can be used to better understand our trading style.

Trading plans are e-mailed once per day, in a quiet market at NY close (16:00 EST / 21:00 GMT). Hence there is no need to stay all day long in front of your computer screen. This makes our system suitable for traders in all time zones, as well as for those having a regular, full time job. Placing orders takes less than 2 minutes a day. All trades are initiated by market orders, and not by stop or limit orders. This is an important advantage, as most trading systems generate orders, which are either associated with slippage (stop orders), or they are missed altogether (sometimes limit orders are not activated by 1-2 pips on some platforms). This drastically deteriorates the profitability of those systems.

Our system is different. We don't need to rush with orders, as we do not enter large directional positions, but rather make small position adjustments. We don't read market news nor chase strong market moves. By trading in a quiet market, in normal bid/ask spread conditions, the effect of price slippage is greatly reduced and performance degradation is minimized. Our trading system does not make directional bets, but adjusts the portfolio every day. What will happen if we delay (or even omit) our daily trades? Nothing disastrous will happen. Depending on market conditions, we will miss some profit potential, but we can adjust our portfolio the next day.

The FX Quant 11 trading system generates signals based on the currency crosses, created from the basic 11 currencies. Actually, we do not trade the crosses themselves, but make synthetic positions based on the majors (G-7 currency pairs: GBPUSD, EURUSD, USDCHF, AUDUSD, USDCAD, USDJPY), plus NZDUSD USDDKK, EURSEK, USDNOK and USDSGD. For example, long GBPNZD position is equivalent to long GBPUSD / short NZDUSD etc. This way, we combine trades and reduce the bid/ask spread costs.

Below is given a trading signal example (as of Friday, March 3, 2006, generated by the Fx Quant 10 strategy):

All positions are normalized for a $10,000 net asset value (NAV) and standard risk level of 20% (month end to month end).

NZDUSD +11988 means the system is LONG 11988 units of the base currency (NZD in this case). Please do not confuse NZDUSD UNITS with NZDUSD LOTS (which consist of 10000 units or 100000 units)! Trading odd (fractional) sizes is available at Oanda. You can not trade fractional lots with most Forex dealing companies, which offer regular (100k currency units) or mini (10k) lots.

USDNOK -8496 means the system is SHORT 8496 units of the base currency (USD in this example).

In a $30,000 account, NZDUSD position would be (30,000/10,000) × (+11988) = +35964 (Long 35964 units NZDUSD), and USDNOK position would be (30,000/10,000) × (-8496) = -25488 (Short 18762 units USDNOK).

Simply: you should buy/sell as many currency units as needed to make the position size as per trading plan. For example, if the NZDUSD postion was +11716 the day before (in a $10,000 account), you should BUY ADDITIONAL 272 NZDUSD units in order to make position size +11988.

Rebalancing Portfolio

Let us assume our position (carried from the day before) is +11716 NZDUSD. If the current trading plan reads "+11988 NZDUSD", it means we should adjust the NZDUSD position by +11988-(+11716) = +272 NZDUSD (buy 272 NZDUSD units). In a $30,000 account (opening account balance) we should buy 3×272 = 816 NZDUSD units.

In this Excel worksheet you can see how positions size changed day-to-day in January 2007 (the old Fx Quant 10 system).

Patience!

Do not expect to make a fortune over night - profit generation is a very slow process.   Ideally, trading should be started when a drawdown occur, or when equity curve moves sideways for a couple of months. If interested, we can tell you what is the best time to start trading. Unless you are patient enough to trade for at least six months, you should better not start trading at all. Sometimes, the system quietly accumulates positions for months, before the profit appears. Our innovative trading model does not attempt to time the market. It doesn't care where the market moves, but extracts some profit day in and day out.

You can try our trading system risk-free in a free demo account.