August 2008:

Unlike long term swing trading, intraday trading through August was tough going, with much of the action taking place during the Asian session or as over reaction to data release, scenarios that are rightly viewed as potentially exhausted by our robot, as these positions inherently reverse the vast majority of the time, and as such we saw fewer trades than the average.

A month obviously affected by lower holiday trading volume and the credit crunch resulted in a disappointing loss of 10.24% resulting in a one year net return to clients of 25.85%.

This result means that we have incurred 3 losing months from 6 and although many would consider a 30% net profit 12 month return as superb, we consider both these facts to be unacceptable as we have our sights set far higher!

Trading through the credit crunch has been an eye opening experience which has prompted us to make a U-turn on our previous statement that our robot did not need any refinement. We have been developing new projects that have allowed us to test an abundance of complex logic; however the only change required to our existing GBPUSD intraday robot has been very subtle.

We have added logic that analyses the potential for each trend at the time of trade placement whereby instead of trading to a fixed first profit exit calculated over years of trading to be a good average the robot will look at the time of the trade, how far the trade has traveled, the trades potential momentum and calculate the first profit exit based on the recent character of the market. The robot then decides whether to either ignore the trade, where to place a first trade exit or trade the entire stake to the market close.

Gain Capital rightly have strict rules in place that prohibit us from using hypothetical back tested results on this website as we have more than 6 months of live results therefore all I can say here is that during extensive back testing the enhancement as described has demonstrated the potential to greatly reduce draw down while enhancing profit significantly.

The exiting news I can report is that once the above is proven in live trading we will have the opportunity to add new robots into the mix to either enhance trading on GBPUSD or to trade an alternative currency in parallel with GBPUSD, our latest developments on a robot to trade GBPJPY are looking very positive.

June 2008:

Accounts finished 7.96% in profit this month, however it could have been much better as our primary robot generated a profit of 12.38% but was hindered by the results of robot 2.

As such we took the decision to remove robot 2 from trade on Monday 16th June after experiencing an unacceptable losing run of Robot 2 trades.

Robot 2 was introduced to trade on May 1st to potentially enhance our current returns. We were reticent to change a winning strategy but as Robot 2 had tested so well, achieving excellent results, we decided against our better judgment to include the robot into the mix! Ultimately that action has proved to be a mistake.

The market is changing character somewhat at present, most likely due to the present economic uncertainty. During periods of this nature it is vitally important not to chase the market but allow the market to come to us, something Robot 1 has proven its does well again and again, whereas Robot 2 is more aggressive, and looks to force the issue.

As such robot 2 did not had the positive impact we had hoped. Even though we have no doubt robot 2 would do well over the course of the year, we have taken the necessary steps to put our service back on track.

Creating positive returns for our customers is our #1 priority.

I remain extremely confident in our system. We are approaching one year of live trading in September. Since we are no longer having any of the issues that we faced in the beginning stages, we remain extremely optimistic about the future.

May 2008:

A disappointing month in one respect as due to the restriction of reporting on a calendar monthly basis we must report a loss of 10.05%, however in reality there are several positives we wish to share.

Robot 1 incurred genuine losses for the first time this month, meaning there were no issues outside of expected trading practice that affected the results and that every trade that should have been placed was placed. During the month’s trading we experienced what we refer to as an orange alert, this alert or flag is generated when trade win rate is markedly lower than the norm and the staking progression is extended beyond a specific level. At times like this capital preservation becomes priority and had we caught just one trend this last week of the month then break-even was attainable.

That trend did not materialize unfortunately as the market consolidated at the upper daily trend line similar but opposite to the manner in which it consolidated at the lower daily trend line earlier in the month. The staking progression will now be reset before next month’s trading, therefore a trending move early into next month will really rub salt in the wound as it will have come that little too late for this month’s report.

We did suffer 2 market gaps that totaled 58 pips, which added to draw down, but that is something that happens at times of shock news and / or data release and is something we must expect and as such factor into daily trading.

Robot 2 finished the month at break-even, however due to some unexpected integration issues break-even is not a true reflection of how the second robot would have performed as a one winning trade was missed and one losing trade would not have been placed had our initial integration be set up correctly.

To summarize trading the GBPUSD this month was tough going, confirmed by our ‘orange alert’ (Historically months that have experienced an Orange Alert have been followed by a month offering solid profit) yet for us the positives gained have ensured that we have never been more confident that the robots in place and the combined strategy they offer are ready willing and able to trade GBPUSD aggressively for maximum profit.

Addition (Added June 02nd 2008):

The 1st trading day of June and we finally caught the trend we were waiting for during the last week of May, that would have comfortably taken us into profit. It is frustrating that due to the constraints of reporting on a calendar monthly basis the genius of the staking progression will not always be maximized but hopefully these months will be minimal in comparison to profitable months.

April 2008:

There was unavoidable disruption to live trading during the final few days of the April as we enhanced the opportunity on offer. Given that accounts were 14.81% in profit, we assumed you would forgive the interruption.

We successfully added a new dedicated backup server, a process that required additional programming to ensure that all trade logs on both servers update simultaneously, allowing for seamless transfer between servers as required.

We also added our latest robot to the overall trading strategy, designed to complement our existing robot as it trades potential reversals to a trend.

The new robot is fully tested and very robust. However, contrary to our existing robot, the new robot utilizes a simple 2000 point bank, non reductive staking strategy, whereas our first robot utilizes a complex progressive staking strategy.

If you were to imagine our 2 robots as twins, the new robot would be the responsible slightly dull twin while our existing robot would be the flamboyant slightly wacky genius - You will note we have carefully avoided any reference to which twin was male and which was female ;-).

The above was completed successfully and tested thoroughly in plenty of time for the start of May's trading.

March 2008:

Through March both the robot and the Gain Capital service functioned perfectly, and monthly profit should have been in double figures, though we have ceased trading for the month at virtually break even - average loss of 0.88%.

The reason for this action is that on the 24th March new funds were added into trade, that were NOT to be traded until April 1st. In the short period while we waited for these funds to be removed from trade the robot was turned off, unfortunately missing a trade that would have generated 90+ pips profit, automatically closing the present staking progression and locking in serious profit.

Mindful that the staking progression was being falsely extended we manually placed a break even stop loss during the run of a Buy trade initiated by the robot on the 25th. The market reversed momentarily closing the trade at the break even stop loss by just 1 pip before pushing on to what should have been additional profit in excess of 120 pips.

If we had simply left well alone, all clients would have been delighted with results; however, as an error had been made on the 24th, we felt the need for added caution and ultimately we were trying to cleverly outmaneuver the market to rectify the overall position, at minimum risk to client funds - Ultimately we missed out by 1 pip!

Given that 2 strong moves have now been missed in the past few days, either of which would have locked in due profits and reset the staking progression, and that the staking progression has become falsely overextended it would be foolhardy and unprofessional of us to chase missed profits. Capital preservation therefore becomes priority, hence our decision not to trade the last 2 days of the month.

The reason incorrect funds were added into trade was, in hindsight, due to a lack of detailed information on our part. New clients and Gain Capital were not at fault. We accept responsibility for the confusion that caused the disruption in trading and the ultimate disappointment of missed profit. As such please note the following:

DO NOT SUBMIT your Power of Attorney document until the day you wish your funds to enter trade, only YOU have the power to decide when funds enter or are removed from trade by submitting or revoking the Power Of Attorney. We do not have back office functionality that allows us to allocate individual account funds in or out of trade.

Given that these details have been made clear, the above scenario should NEVER affect trading again.

July 2008:

Nothing much to report this month other than we finished over 8.25% up (Net of all fees) for the month, 40.2% (Net of all fees - That's profit in your account) since inception in September 2007.

The system performed flawlessly in a month where many individual traders and managed account services reported difficulties, and in many cases, extensive losses.

We could not be more pleased as we approach our first anniversary of the service and we remain very excited as we look forward to our second year, our aim is to vastly out perform the returns we generate in our first 12 months of trading. The Forex System Research automated trading system has been enhanced continuously through our first year and we now feel that it is complete without the need for further enhancement.

As the 31st of this month is a non-trading day, for us at least, we are taking the last 3 days of the month off while we move the backup servers to a new data facility, thus the reason for the early update. If anyone is considering adding additional funds, we feel that now is a good time to do so in order to get your additional funds into trade for the 1st of the September.

For new clients we shall increase the account minimum to US$10,000 upon joining, as of our anniversary, Sept 1st 2008. Existing clients whose account balance is below that minimum will obviously be grand fathered in, without any requirement to deposit additional funds -We appreciate the faith you have shown us during, this the first year of our service.

Best wishes and hopefully very profitable trading!

June 2008:

Accounts finished 7.96% in profit this month, however it could have been much better as our primary robot generated a profit of 12.38% but was hindered by the results of robot 2.

As such we took the decision to remove robot 2 from trade on Monday 16th June after experiencing an unacceptable losing run of Robot 2 trades.

Robot 2 was introduced to trade on May 1st to potentially enhance our current returns. We were reticent to change a winning strategy but as Robot 2 had tested so well, achieving excellent results, we decided against our better judgment to include the robot into the mix! Ultimately that action has proved to be a mistake.

The market is changing character somewhat at present, most likely due to the present economic uncertainty. During periods of this nature it is vitally important not to chase the market but allow the market to come to us, something Robot 1 has proven its does well again and again, whereas Robot 2 is more aggressive, and looks to force the issue.

As such robot 2 did not had the positive impact we had hoped. Even though we have no doubt robot 2 would do well over the course of the year, we have taken the necessary steps to put our service back on track.

Creating positive returns for our customers is our #1 priority.

I remain extremely confident in our system. We are approaching one year of live trading in September. Since we are no longer having any of the issues that we faced in the beginning stages, we remain extremely optimistic about the future.

May 2008:

A disappointing month in one respect as due to the restriction of reporting on a calendar monthly basis we must report a loss of 10.05%, however in reality there are several positives we wish to share.

Robot 1 incurred genuine losses for the first time this month, meaning there were no issues outside of expected trading practice that affected the results and that every trade that should have been placed was placed. During the month’s trading we experienced what we refer to as an orange alert, this alert or flag is generated when trade win rate is markedly lower than the norm and the staking progression is extended beyond a specific level. At times like this capital preservation becomes priority and had we caught just one trend this last week of the month then break-even was attainable.

That trend did not materialize unfortunately as the market consolidated at the upper daily trend line similar but opposite to the manner in which it consolidated at the lower daily trend line earlier in the month. The staking progression will now be reset before next month’s trading, therefore a trending move early into next month will really rub salt in the wound as it will have come that little too late for this month’s report.

We did suffer 2 market gaps that totaled 58 pips, which added to draw down, but that is something that happens at times of shock news and / or data release and is something we must expect and as such factor into daily trading.

Robot 2 finished the month at break-even, however due to some unexpected integration issues break-even is not a true reflection of how the second robot would have performed as a one winning trade was missed and one losing trade would not have been placed had our initial integration be set up correctly.

To summarize trading the GBPUSD this month was tough going, confirmed by our ‘orange alert’ (Historically months that have experienced an Orange Alert have been followed by a month offering solid profit) yet for us the positives gained have ensured that we have never been more confident that the robots in place and the combined strategy they offer are ready willing and able to trade GBPUSD aggressively for maximum profit.

Addition (Added June 02nd 2008):

The 1st trading day of June and we finally caught the trend we were waiting for during the last week of May, that would have comfortably taken us into profit. It is frustrating that due to the constraints of reporting on a calendar monthly basis the genius of the staking progression will not always be maximized but hopefully these months will be minimal in comparison to profitable months.