Wednesday, April 1, 2009

Forex Avenger Case Study: Profitable Trading System Improved To 789%

I recently took the very popular Forex Avenger trading system and put it though its paces using a Forex trading system software. I first wanted to prove to myself and my readers that Forex Avenger was a profitable trading system. Then I wanted to see if I could split test the system to make improvements for even more profit. And the results were nothing short of spectacular.
The Advantage Of Forex Testing Software

The problem with testing mechanical Forex trading systems, where you have to trade manually, is the time involved. Doing the testing on a DEMO account in real time takes forever... especially if you want to test for an entire year like I did! So, using a testing software was a great option.

Using the software, I was able to use real, historical Forex data to simulate trading for the entire year of 2008. And here is the great part... then I could test a variation of the trading system for the SAME time period to see which way was better. You just can't do this with demo trading.

83% Profitable Out Of The Box

The first Forex Avenger test I did was "out of the box". I traded the system exactly as David Curran taught it for the entire year of 2008. My account grew from $10,000 to over $18,300... for about 83% profit. So, the first test was successful... Forex Avenger made money during the test.

279% Profit In Second Test

In the second test of Forex Avenger I made some slight changes. This is the advantage of trading a system fast using the software... it exposes patterns or variations worth testing. And while the success rate when down from 60% to 49%, the profit went up from 83% to 279%. In dollars, the test account grew from $10,000 to over $27,900. Pretty substantial improvement I would say.

789% Profit In Third Test

I still felt I was leaving profit on the table, so I made some further changes. It actually took me various tests and tweaking of the system to get this to work. But the effort paid off, because the profit rose to an astounding 789%. In dollars, my test account went from $10,000 to over $78,900.

Basically, by split testing slight variations of the original Forex Avenger trading system, I was able to make about $60,000 MORE over the same year of trading (2008). This not only shows that Forex Avenger is profitable as is, a credit to David Curran, but that profits can actually be improved.

Let's keep some perspective here. Coming up with a profitable Forex trading system like David Curran teaches with an in-depth trading manual and 22 videos is no small feat. As a matter of fact, it took him YEARS of testing, tweaking and risking his own money to come up with this system. And he is nice enough to share it with us.

But now, with Forex system testing software that let's use use real data to manually test systems over and over again using the same time period, the possibilities for improvements exist. In this case, my Forex Avenger case study was a success. I not only tested the original version and found it profitable, but was able to make adjustments that raise the profits from 83% to 279% and then a staggering 789%. I'm looking forward to putting what I learned from the case study into practice while trading this system.

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