Strategy

strategy

Using a discretionary approach, trades are entered both manually and automatically when a combination of historically proven technical indicators being met. The goal of this strategy is to make conservative trades with the aim of providing the investor with a monthly profit of between 10% – 40%.

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A minimum of three different technical indicators are used in most cases to determine market entry levels. Strict Money Management rules are used while Stealth Stop-Loss and Limits are automatically set and adjusted during trading using ATR indicator settings.

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Terminologies

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Risk / Reward ratio (R/R) (above 10):

1:2 risk reward ratio means that your potential reward is two times bigger than your riskProfessional traders recommend a 1:3 ratio for obvious reasons. Faida Forex aims to deliver a R/R of 1:10

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Profit Factor (above 2)

The Profit Factor is a quality index of trading. It assesses as a figure the relationship between the risk taken and the results.

If a trading is good, the profit factor will be greater than 2. Faida Forex aims to deliver a Profit Factor of above 2. Below 2, the trading needs to be reviewed, even if you generated a profit. In effect, a Profit Factor less than 2 indicates that the risks taken to increase your capital are too high. In the medium term, a trader with a profit factor less than 2 is statistically damned, as the risks are too high to generate a profit. This therefore means that losses will at some point take over and you will not have the opportunity to recover. With a profit factor greater than 2, you are safe from extinction.

Profit Factor = (sum of profits) / (sum of losses)

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Draw Down (DD) (max 40%):

A maximum drawdown (MDD) is the maximum loss from a peak to a trough of a portfolio, before a new peak is attained. Maximum Drawdown (MDD) is an indicator of downside risk over a specified time period.

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Trading profiles: Normal / Conservative / Aggressive

Target Risk per trade: < 3%

Target Account max draw down: < 40%

Target monthly ROI: 10 – 40%

Target Profit Factor: > 2.3

Target Risk / Reward ratio (R/R): 10

Pairs traded:

AUD/CAD, AUD/CHF, AUD/NZD, AUD/USD, CAD/CHF, EUR/CHF, EUR/GBP, NZD/CAD, NZD/CHF, NZD/USD. USD$ pegged pairs are “mostly” avoided.

Trade Timeframes / Charts: 1 Day, 1 Week

Avg trade length: Two (2) days

Trade frequency: approximately between 5  – 20 trades per account per week depending on market opportunities

System type: Automatic / Manual trading system

 

Risk Control:

1. We use automatic Stealth Stop Loss (SL) for each order and we control the max loss per trade under 3%.
Actual for most order the SL is under 0.5%-1%.

2. We control the total max account drawdown under 40%.

 

Risk Preferences:

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Normal Accounts: max dd < 20% and 10-20% profit per month

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Conservative Accounts: max dd < 30% and 20-30% profit per month

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Aggressive Accounts: max dd < 40% and 30-40% profit per month

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In volatile market conditions, losses may still occur but the account drawdown will not exceeds 40%. Positions are kept open until such time as either a protective stop order is triggered guaranteeing a safe predefined loss, or a trailing stop/limit order is triggered thus locking in profits.

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NB: It should be noted that in extremely volatile market conditions stop/limit orders may not be triggered. This is the nature and risk/reward of any leverage trading. View our disclaimer.

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Strict money management methods are incorporated in order to preserve capital and produce the maximum return for investors.

 

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