We have begun to make the necessary adjustments to our platform and all of our back office monitoring programs.

As of Sunday May 10^th your account will not provide  some hedging capabilities.

U.S. accounts  will be are restricted as follows:

You may not hold more than 1 system per currency pair in your account. The reason being is that different system providers may have different opinions on which direction the market is going.

Traders should consider to make adjustments to your portfolios as follows:

· Select 1 signal provider per currency pair.

Before you feel that I’m talking in circles here, let me be clear that it isn’t JUST the amount you deposit that matters. SystemTraderFX has imposed a minimum account size of $5000 – with the trader in mind.

So when you open an account what should you think about?

PORTFOLIO STRATEGIES
- What kind of strategies (and how many) are going to make up your portfolio? More specifically, what currency pairs? Are you focused on one particular pair, or do you have a balance of different pairs?

MONEY MANGEMENT
- What is the leverage of your portfolio? (You can easily find this under the Portfolio tab in your account). How many contracts (lots) does each strategy in your portfolio enter each time a trade is executed? Which money management option are you using and what are you risking or willing to risk?

DEPOSIT
- After considering the above points, NOW you’re better able to know how much you ought to deposit to start with.

So whether it’s $5,000, or $10,000, or $25,000 or more, always have an idea of WHAT your goals are. Just because it’s automated, doesn’t mean that you shouldn’t pay attention.

Well the platform is tremendous, and if you have a background in Forex trading it can really be a great trading solution for you – one that you can get up and running with in a day or two. It doesn’t take much to understand it – and we’re always here to help whether it’s in getting you familiar with the platform or giving you a tip on a strategy or two to get going with.

It seems when traders go live with this, they get comfortable with it right away and they don’t feel need for anything else. They rely on the emails from SystemTraderFX.

When I think about it, it’s probably the perfect, yet heavily downplayed solution (we don’t overhype too much), for traders. Take a look, get familiar with a demo, go live, come to us for some or a lot of support and you’ll know what I’m talking about and what other traders have experienced.

Many traders have taken advantage of this, and you ought to also.

Like anything in trading nothing is a certainty and so prefer not to be too knee jerk in flipping strategies in and out of our portfolio.

That said, the equity curve, after a rocky beginning is out of this world. It is a very pretty climb.

To add to this we figured we’d add a list of the current strategies currently in our demo portfolio. You wouldn’t necessarily have this many in a live account, but we’re testing some things and it’s looking good.

Well, we just received an email inquiring about the 20 Model SystemTraderFX trading portfolios. There are various portfolios based on account size and risk tolerance – and it is broken down in explicit detail. Think of them as guide rails in auto-trading with SystemTraderFX.

And it doesn’t hurt that 16 of the 20 are in some sort of profit as I write this.

To access and track the 20 model portfolios, LOGIN to your Demo or Live SystemTraderFX account.

Once you are logged into the SystemTraderFX platform select the "Portfolio" tab along the top of the screen. Underneath that you will see the sub-navigation. There go to the far right and click on "View Top Portfolio Packages."

It will cause a pop-up to come up, so if you have them enabled in your Internet browser, please disable it to see the model portfolios. Once there, check all available choices and click "View."

All 20 model portfolios from various account balances and risk levels will display. Beside each model portfolio click on "View Details" to see all examples. We have included a couple of screen shot examples of what you will see.

Let us know if you have any questions!

You’ll notice a full website with additional support – and more that will be coming over the course of the next few weeks.

Thank you for your patience as we’ve gotten this ready and up – we hope that you find better support and further comfort with our tremendous autotrading solution.

We are focused on your autotrading success, and whatever it is we can do to assist, please let us know – we look forward to continuing our relationship with you, and for anyone new, welcome and we hope to help you realize further success in this market.

SystemTraderFX allows you to configure and build a forex trading portfolio from over 50 professionally developed trading strategies. You can now trade the forex market 24 hours per day 5 days per week!

Open a demo account from our homepage to start trading with a virtual balance of USD $100,000 and create your ideal portfolio before opening a live account.

We hope you enjoy your currency trading experience and please remember that we are always ready to assist you in any way we can. Should you have any questions, please feel free to contact us or post a question on our forum.

Bookmark and stay tuned to this blog for tips and insight from the SystemTraderFX team!

One of the benefits to trading with a system is that it removes much of the emotion involved with choosing your trades.

You do not have to worry about deciding your entry and exit points, and whether or not the strategy you created is working. Rather, you can leave these elements up to the system provider.

That said, there is still a significant amount of emotion that comes into play when maintaining your portfolio.

The best way to remove emotion from trading is to plan as much as possible in advance prior to going live with your portfolio.

Many traders unfortunately focus their energy on what happens AFTER they have started trading their portfolio. Rather, the majority of your energy should go into controlling your leverage, diversifying your portfolio, and creating a balanced account breakdown BEFORE the systems go live.

Worst Case Scenario

Before you go live with a portfolio, you should fully understand the potential losses of your system.

Imagine that you have 3 systems in your portfolio, one with a -500 Max Drawdown, the other with a -300 Max Drawdown and the third with a -600 Max Draw down.

Though unlikely, you should not be too shocked if your system has a -1400 draw down at one point in
time. Furthermore, a conservative trader will always expect that the worst draw down is ahead of them. So if your system with a Max Draw down of -600 goes to -700, it should not be entirely unexpected.

It is also a good idea to look into the maximum consecutive losses that your system has endured.

If your system has a Win % of 50% and typically opens 12 positions at a time, then you should not be shocked if the first 6 trades that the system generates are losing trades.

To get a better idea of what to expect, you can check the System Performance page and sort through
the most recent trades placed by the system. Here you will actually see what the previous trades have been.

If you see that in the past month there was a period of 4 consecutive losing trades, you can mentally prepare yourself for a similar occurrence.

You can prepare yourself for the worst case scenario by always reminding yourself that the worst draw down could very well be ahead of you.

By mentally preparing yourself for these potential losses, you are far more likely to weather a draw down without manipulating the trades or immediately changing the systems in your portfolio.

Stepping Back

As a general rule of thumb, anytime you feel like your emotions are getting the better of you, take a step back from your trading to try and prevent making rash decisions like closing a trade prematurely.

When you do find yourself getting frustrated with the results of your system, it is helpful to take a look back at why they were unsuccessful.

Did you select a range bound system on the EURGBP right around when the pair started to break out?

Is the GBPJPY trending system you selected performing badly because the market is moving sideways?

Once you have identified logical reasons for the portfolio’s draw down, you should then ask yourself whether or not you believe that these market conditions will persist.

All too often traders will remove funds from a system after a draw down, only to miss the rebound. The key here is to avoid chasing the market.

Markets are naturally cyclical. Your system may be designed to perform well when the market is breaking out. If you add such a system, you will have to keep in mind that 80% of the year the market is going to be range bound.

Greed

If there is one emotion above all others that can quickly hurt a trader, it is greed.

As soon as greed enters the equation, you can find yourself making poor trading decisions.

A few good trades can raise your confidence and can lead to carelessness. For example, if you see that
one system in your portfolio has been outperforming the others, you may be tempted to remove some of the underperforming systems and/or allocate a higher percentage of your account to the more profitable (and often more volatile) system.

It is important to remember however why you chose the Account Breakdown that you did.

Trading is an emotional roller coaster. You go from the highs when you are profiting big, to the lows when you are down.

It is always best to do yourself and your account balance a favor and control these emotions.

A good resource is the trading psychology podcast - The Mind of a Trader.

Once you have built a portfolio, you will need to set up some rules as to how to maintain it.

SystemTraderFX should be thought of as an investment that you do not necessarily want to modify every few days.

You want to avoid a reactionary response to negative returns that you may see on your portfolio. After all, if you are trading a trend based system, it is only natural that it will have draw downs while the market is moving sideways (and vice versa).

A proactive approach would be to only make small changes to your portfolio that are not necessarily influenced by the system’s recent performance.

System Cut Off Point

Typically it is recommended that you do not modify your system by adding your own stops and limits.

These actions will inevitably change the system’s performance and nullify what you have spent so much time back testing. Nevertheless, systems typically do have a life cycle, where after a period of time they become ineffective and obsolete.

To prevent yourself from becoming a victim of this, some traders will put manual stops that are 2 or 3x the historical maximum draw down. This protects them in the event of a worse case scenario failure of the
system.

Portfolio Reevaluation

Before you go live with your portfolio, you may want to commit to a reevaluation calendar.

While you do not want to tamper with your system too much, it is a good idea to reevaluate it once a month or once a quarter. Markets go through trending and consolidating phases, and you will want to take this into account by making sure that you have systems that are best able to take advantage of the move.

For example, if you anticipate that for the first quarter of the year the UK will be in a tightening cycle, you may want to choose trending GBP system that is best able to take advantage of these moves.

If you think that the interest rates will be held steady for an extended period of time, you could opt to refocus the portfolio on the range bound systems.

You can easily form an opinion of the markets by visiting the Online Trading Classrooms by Trading Post Brokerage or the currency rooms on DailyFX.

Taking Profits

At a certain point, you will want to withdraw profits from a profitable system. This is after all the motivation for investing.

Before you do so however you will want to consider the impact that such a withdrawal will have on your portfolio.

Whenever you withdraw funds you should consider two things:

1. Overleveraging
   Withdrawing funds can lead to overleveraging an existing portfolio. For example, imagine that you have a starting balance of $5,000 and are trading 10K fixed lots on two systems that specify 4 maximum positions. This would put your exposure at 80K. Therefore your leverage would be 16:1 (80,000/5,000). By withdrawing just $1000 from your account, you would be raising your leverage to 20:1 (80,000/4,000).
2. Consecutive Losing Trades
   Now imagine that you were merely withdrawing profits from your account. You have a balance of $5,000 and are trading a system with a 50% win record. Let’s imagine that in your first week of trading, you have 20 consecutive winning trades that yield a profit of $2,000. You decide to withdraw these profits, which will put you back at your starting balance of $5,000.

   On the surface you would not think that you are putting your account at any greater risk than when you started. However, because your system had a 50% win record, you might be putting yourself at risk for 20 consecutive losing trades to follow!

   20 losing trades could cause an equivalent loss of $2,000, which would reduce your balance to $3,000. A $3,000 balance on 80K of exposure would result in a highly overleveraged account 26:1. This could ultimately put you at risk for a margin call. In other words, avoid withdrawing profits after experiencing a brief winning streak.

With SystemTraderFX, you can add multiple systems to your portfolio.

While this can increase your potential profits, it can also increase your potential losses at any given time.

However, if you create a balanced portfolio you can potentially limit such losses in your account.

For example, if you have 3 systems that are moving against you at the same time, you will most likely get frustrated with your portfolio.

If however you have one system that is in your favor, one that is moving against you and the other that is flat, you will probably be more comfortable with the overall performance.

In this section you will learn how to best balance a portfolio.

Correlations

Once you have narrowed your list down to a select few systems that you are comfortable with, you will then need to verify that none of the systems in your final portfolio have similar strategies.

The first step will be to split your list into two groups: systems that are trend following and systems that are range bound.

The easiest way to acquire this information is to select the “System Performance” link under the “Support” menu at the top of this page.

Click on "System Performance" under the "Support" menu

If you click on the “Performance” link, you will be presented with a list of all the available system on SystemTraderFX.

Click on the "Performance" link

Clicking on the “Info” button will provide you with information that the provider is willing to disclose including: pairs, average stop/limit, average profit, the frequency of trades, and most importantly the underlying strategy.

Click on the "Info" button to display information for the system provider

Another way to get an idea of when the system performed best is by simply pulling up a graph of the system. You can do this by clicking on the “Curve” icon.

Click on the "Curve" button to display the PE Curve for the system provider

If a system performed well in August 2007, you can then pull up a graph to see what the price action was like during that time.

For example, the following GBPJPY system had very impressive gains in August of 2007. Please keep in mind that past performance is not indicative of future results.

If you pull up a graph you will see that the GBPJPY sold off dramatically falling nearly 5,000 pips in one week during this time frame. So it may be safe to say that this particular GBPJPY system does well in trending and/or volatile conditions.

While you may want to include this system in your portfolio, it would be a good idea to match it with another system that has historically done well during range bound market conditions.

What you definitely want to avoid is having two systems with a similar premise on the same currency pair.

For example, adding two GBPJPY trending systems may lead to substantial profits, but it could also lead to large losses.

Once you have grouped your systems, you should then eliminate currency pair duplicates.

For example, if you have two trending systems on the EURUSD, simply pick the better one. You should also take into account the correlations between currency pairs.

DailyFX.com offers a weekly report on currency correlations that you can read. As you can see below, the EURUSD has a very high negative correlation with the USDCHF.

Therefore, adding two trending pairs on the EURUSD and the USDCHF would be similar to putting all of your eggs in one basket.

Account Breakdown

Selecting the systems in your portfolio is only half the battle. You must also consider the account breakdown.

If you are starting with a modest balance, you will only want to allocate the minimum to each system. If however you have room to allocate more than 10K per system, you may want to consider a pyramid strategy.

The knee jerk reaction is usually to allocate most of your resources to the best performing system to maximize profits. However, often the best performing systems also come with larger draw downs.

To create a balanced portfolio you will actually want to allocate the better part of your system to the lower risk systems, and a small portion of your account to the higher risk systems.

This pyramid strategy for your account breakdown is typically a good method for capital preservation.

Risk Pyramid Strategy

1. The first step is to rank all of your systems by their maximum drawdown so that you can
   evaluate the risk.
2. Then you will determine your account size and the maximum draw down you will be willing
   to accept per system in dollar and percentage terms.
3. You can then divide the maximum dollar loss that you are willing to take by the max pip
   draw down to obtain your ideal position size per system.

For example, imagine that you have a starting balance of $50,000 and are only willing to take a 5% draw down on one of the more volatile systems; the max dollar draw down would be set at $2,500.

Now assume that the maximum draw down on this system has been 300 pips.

This would put your maximum position size at 8 10K lots (80K) (2,500/300).

Keep in mind however that the system already specifies the maximum positions that it will open at any given time. To calculate the final position size you will need to divide the number you derived from the formula by the maximum amount of positions that your system can take on.

For example, if the system allows a maximum of 4 positions at a time, you will then put in 2 mini lots (20K) for this high volatility system (8/4) = 2.