FX Flash Logo
Price: $87

FX Flash

Added on March 25, 2013 07:53 AM
(4 / 5)
Trading style: trending
Currency pairs: AUDJPY, EURJPY, EURUSD, GBPUSD, NZDUSD, USDCAD, USDCHF
Time frame: M15,H1
Money-back guarantee: 60-day
NFA compliance: No
License: 1 real account

The FX Flash EA trades with a trend following philosophy that enables it to take good sized profits out of forex markets while maintaining a risk tolerance that moves in swing with the market. From the same makers that brought us the Forex Overdrive, FX Flash is a strategy built with the promise of long lasting returns. By basing the system on time tested principles, FX Flash has an advantage over systems that are only based on the latest fads, and although the bot is fairly new, live tests are showing potential.  

Method

FX Flash is a trend trader and uses a number of different indicators to find and confirm profitable trends.

Moving averages are often considered the cornerstone of modern trend following and the FX Flash EA uses them on several different time frames; to determine market direction, calculate measure momentum and determine support and resistance levels.

Once direction is decided, the Stochastic Oscillator and CCI (commodity channel index) indicators are used to calculate the oversold or overbought nature of the currency and confirm the direction. Then, the EA uses ATR (average true range) as an extra indicator to ascertain how strong the forthcoming trend is. As a final instructor, the EA uses candlestick theory to find the best point to enter a position and by doing so, FX Flash is able to pick out trends that have few whipsaws and manage to gain profits of 10-15 pips per trade.

The FX Flash EA comes with 16 versions, at no extra cost, which at first glance seems like too many. However, the reason it has 16 versions is that the bot allocates two separate strategies (15 minute and 1 hour) for each currency it trades. Each strategy is therefore traded independently on its own chart as if it is its own system. This allows independent testing and analysis of each pair.

The bot is designed to trade seven FX markets; AUDJPY, EURJPY, EURUSD, GBPUSD, NZDUSD, USDCAD and USDCHF and as noted, each market is given two strategies, (except AUDJPY and EURUSD which have three each). The aim is for a diversified approach to trend trading and for the most part it works well. It probably would have been simpler however, to combine them all into one composite system.

The EA has been optimized separately for each pair which means trading AUDJPY for example, will use completely different stop loss levels and profit targets as USDCAD.  This is a key difference that sets the FX Flash apart from its competitors. It trades the seven markets as though part of a portfolio and thus is able to capture profits through different market conditions.

Risk

By trading as though part of a portfolio, FX Flash is able to reduce risk through diversification. However, with seven markets and 16 strategies open to trade at any one point there is a danger of over capitalization and the threat of blow out. Fortunately, FX Flash EA has hard coded settings in place to make sure this never happens and limits total account exposure to a maximum of 14% of equity at any one time. This is essential and at 14%, the chance of the account being wiped out is a minute possibility.

As well as this, FX Flash allows the user to customize risk settings per currency pair with auto money management and position scaling allowed. It is noted, however, that the default settings are recommended and seem to work as well as any tried.

Past Performance

As stated earlier, FX Flash is a fairly new product but that doesn’t mean to say it has not been tested extensively on past data. Actually, due to the complexity of the strategy and the fact it can trade 16 different versions at any one time, back testing the system is a time consuming affair and better left to computers with a good deal of processing power. Nevertheless, in back testing, the FX Flash performed very well.

In a test from January 2008 to January 2013, FX Flash was able to turn $10,000 into $453,764 with a maximum account drawdown of just 3.5%. This is over a portfolio of all of the seven currency pairs.

Although all pairs showed consistent gains over the period, GBPUSD and CADUSD seemed to particularly outperform.

 

Future Performance

FX Flash is relatively new so future tests of the EA do not go back a long way. However, this is not necessarily a bad thing if the system manages to perform in a manner that it is consistent with its past performance.

In fact, FX Flash EA has got off to what can only be called an excellent start and in a future test verified by myfxbook.com, FX Flash is showing a gain of 44.9% over just 50 days. As well as this, tests from other external parties have also shown strong performance, with one test showing a gain of 24% over the last month.

Taking a closer look at the stats, FX Flash has performed extremely well over the past 50 days with a profit factor of 2.36 and expectancy of 5.6 pips. Expectancy is an important statistic and 5.6 compares very well with the top EA’s on the market.

The average trade is six hours in duration and therefore consistent with the manufacturer’s trend trading philosophy and average win is respectable at 10.9 pips

A glance at the average win percentage reveals a very high 90% rate which is spectacular and is even higher for CADUSD which is 100% after 15 trades. This percentage is bound to come down as the system proceeds, but still offers positive guidance to the future profitability of the bot.

Conclusion

Sometimes, trading comes down to a matter of philosophy and the fundamental dynamics of markets. Are you a scalper who believes in efficient, mean reversion type markets? Or do you believe in long tail events and markets moving in long term trends?

The FX Flash, like many before it, believes in the latter and this EA does a good job of capturing those trends. So far, the EA is unproven on a long term horizon, but if recent performance is anything to go by, this bot looks good. Traders should be quick to take advantage of this, since outperformance like this rarely lasts long once the cat is let out of the bag.


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