The Forex Autopilot system is a trend following method, that uses a Fibonacci formula, which picks out the most advantageous time to enter and exit a trade based on market conditions.

Forex Autopilot is applied directly onto the Metatrader platform, and the trading robot automatically opens and closes trades without any kind of human interaction. the manual covers how to tweak the parameters to match your trading personality.

Its ideally a trend following system, so it is always trading with the current momentum of the market, never against it.

Marcus Leary claims to have generated $6006 from trading the system in less than 3 weeks on one of his trading accounts.

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The way I handle the question is by providing a template that includes three technical indicators: the stochastic oscillator, MACD indicator, and a relative strength comparative line, creating what I believe to be the best visual for evaluating a price chart. The combination of these three indicators provides a confidence-building directional bias in trending and non-trending markets, something a single indicator could not achieve as easily.

1. The Stochastic Oscillator

The stochastic oscillator is a common technical tool that sends an overbought or oversold message, particularly helpful in a non-trending market. Trading ranges typically have neutral momentum characteristics, so we must turn to an overbought/oversold indicator to aid in identifying low-risk entries and exits. We have found the 12-3-3 stochastics to yield a desirable number of signals, registering an oversold reading (or “buy” signal) when the two lines that comprise the oscillator crossover below 20%, and an overbought reading (or “sell” signal) when they crossover above 80%. The stochastics do not lose validity in a trending environment, but their interpretation becomes more subjective.

2. The MACD Indicator

The MACD indicator sends objective trend-following signals that work best, naturally, in a trending or momentum-driven environment. Using the standard 12-26-9 parameters, a bullish crossover occurs when the signal line crosses above the MACD line in a lagging indication of a turnaround, and vice versa for a bearish crossover. Oftentimes, the stochastics have signaled a turnaround before it is confirmed by the MACD indicator, making them complementary indicators. The best “buy” signals seem to occur when momentum is positive based on the uptrending nature of the MACD indicator, and the stochastics are near oversold levels.

3. Relative Strength Comparative Analysis

Once a directional bias is derived from the stochastics and MACD indicator, relative strength comparative analysis can be used to provide additional confidence. A relative strength comparative line is simply a price-to-price ratio, often applied to a stock relative to a sector or major index (i.e., CELG versus the BTK). The line can be evaluated in the same way as price, using trendlines or simple moving averages. An uptrending relative strength line would add confidence to a bullish bias, suggesting the underlying financial instrument is poised to outperform the index it is being compared to, and vice versa.

Katie Stockton is a Chief Market Technician at MKM Partners LLC. Prior to joining MKM, Mrs. Stockton worked as a trader

for New York-based hedge fund Ulysses Management and was a publishing analyst for Morgan Stanley’s technical strategy group.

If you take few indicators and combine them so one confirms signals given by other you can say you have an indicators system. How much it is worth? This depends on wide statistical studies done on it which are including testing on historical data (back testing), random data tests, demo market testing and in the end live trading. Most of combinations are failing at some point, especially those which aren’t adjusting to current market situation. Good system need to be updated frequently, trader need to change parameters according to changing market. There are few basic rules in making technical indicators systems.
Rule 1
Different approaches

While combining indicators to work together best results give choosing different indicators which are processing market data in much different ways. This makes confirmations more reliable. For example joining few moving averages will give worse results than joining average with RSI oscillator.
Rule 2
Limited number of indicators

There cannot be too many indicators in system. More than 3-4 will make system fogged and difficult to operate. 2-3 is optimal number, at least for me.
Rule 3
Look at big the picture

Many traders and wannabe traders says that you need to follow your system signals blindly. They can’t be farther from reasonable approach. You need to take under consideration whole market situation including economic data, formations, trends, supports and resistances and so on. Your system is a tool, not magic wand. If you follow it blindly you will hurt yourself just as carpenter using his saw with closed eyes.
Rule 4
Test before you trade

Huge advantage of technical analysis is that it can be easily tested. Historical testing although it’s not very best way to see if system is worthwhile gives wide selection of parameters which provides basic information about the system such as number of transactions made, drawdown, exposure, profit/loss ratio and hit rate. Profit/loss has limited importance as it can be easily adjusted by optimizing parameters of systems indicators. Test system to find where problems are not how good it could be. Try to make it fail – this way you will see how reliable it can be.

Most important thing is distance and reasonable approach to technical analysis systems. You need to be aware that mechanical following any technical system will surely cost you money. If it would be otherwise who would need traders when having computers…

We’ve gathered few interesting systems and strategies in our E-books section. Feel free to check it out [ here ]

Author: Piotr Surdel Forex Education www.forexscience.com