What we liked
SimplicityRepetition is the mother of all skills. After a little practice we were able to execute the strategy effortlessly, and with precision, over and over again.
The trade set-up can be done in a matter of seconds. This relates both to the original set up to await an entry signal, and the set-up to exit a trade.
Although the underlying theory (Fibonacci numbers, etc) is quite complex, its practical application to the strategy is simple and straightforward. We conclude that the strategy is understandable and feasible to the average trader, provided he already knows the basics.
To those who, quite rightly, have a need to understand the theory underpinning the strategy, an entire chapter is devoted to just that … to present the scientific research supporting the strategy. We found this very useful, boosting our confidence in the strategy.
Our back-testing confirmed the result of every single trade presented in the promotional material as proof of the strategy’s profitability … all 35 trades.
Not only did we confirm the number of pips profits (and losses in some cases) on a trade-by-trade basis, but also the specific entry price and time, and the exit price and time, for every trade presented as evidence.
But we did not restrict our back-testing to the evidence presented. We back-tested data for an entire two years. The results were consistent with the results of our initial back-testing.
Our demo trading and live trading, though limited, produced results that were comparable in profitability to the back-testing results. But in the process, we ran into some real practical limitations.
Consistency
The strategy promo claimed that when the market behavior changes slightly or even drastically, as often happens in times of political and financial crisis, the strategy is still able to make profits. This is what consistency of a strategy means.
Based on our testing, we concur that the original strategy is consistent, producing decent results despite market volatility. We believe, however, there are some inherent flaws, which, once fixed, would make for a more powerful strategy.
