Forex Combo System v6.0 Review

Metaquotes History Center Data Backtests

The spread was set to 1.5 for EURUSD and 2.0 for GBPUSD and the GMT offset was 2 with DST enabled for all the history center data testing. As most of you know, some data during 2011 - about 3 months - is missing from the Metaquotes history center, so this will be missed from the backtests too.

EURUSD history center data

The maximum drawdown is better kept below 20%, it's here a little higher but the risk of 2 fits enough. While the previous backtest results look great, running a fixed lot backtest could lead to a more comprehensible representation of the balance curve progression through the 12 year backtest.

This seems more pronounced than the previous balance chart and this is enough encouragement to upgrade the EURUSD EA to 3.0 which has a lower drawdown and better returns than the first version 1.42 given the backtests of both versions.

Here is separate tests, one for each strategy to compare them in detail:

In fact, it can perform the work when it is alone. Certainly is not a miracle strategy, but it is profitable and integrates with others excellently.

GBPUSD history center data

In fact, in spite of this backtest looking a bit better than that with the previous version of the EA, it's really not. The drawdown is more worse, is 32% and the end profit also decreased.

Here is a fixed lot backtest for GBPUSD too:

The highest drawdown looks to be found in the beginning of the test, so you needn't concern about the figure mentioned above - the market had great changes since 1999 - 2000 - but a drawdown over 30% can't be simply ignored especially with the cautious risk settings were applied.

Here is also separate tests, one for each strategy for GBPUSD history center data:

So interesting! apparently, it isn't really the EuroRange strategy responsible for all that nice GBPUSD work, it looks like much worse than the other three strategies. What could even wonder you is why it was added to the GBPUSD too while it needed to be configured to the recent market conditions, starting from 2007-2008, so here is a 2007-2011 history center data backtest to verify that supposition.

Actually, this seems to be true. This backtest appears to be much better and its drawdown is below 12% while it exceeded 40% in the 12 year backtest.

Dukascopy tick data backtests

For the tick data backtests, the real (variable) spread and a commission of 0 was used.

EURUSD tick data

Here is a backtest for the whole four strategies:

Despite the relative drawdown of the whole four strategies is a little worse, the profits are much higher due to compounding. It seems that the EuroRange is not just a welcome addition to the EURUSD EA.

Although it's expected that this one would look just like the history center data backtest, it doesn’t. If you'd check the trades most of them would match but - for some reason - there would be missing trades in both.

GBPUSD tick data

As noted Forex Combo System performed better by running all its 4 strategies on GBPUSD, the same as on EURUSD, but not as high as it, it was just slightly better.

Like EuroRange strategy EURUSD backtests, this doesn't really look much like coordinate in the history center data. Here you'd also find missing trades in both backtests when compared those with history center data backtests. The overall outcome of this test using tick data isn't preferred, so the more prominent review factor will be the forward testing.

The previous backtests tick data was created with GMT 0 and no DST, the backtests below are using GMT+1.

The outcome appears to be more profitable than running the same with GMT 0. Peculiarly, as shown below, the 2 backtests depending on the GMT offset were not really better, but most likely a synergy effect was applied and boosted the profitability.

As it turns out, the notice regarding the different GMT offset no longer stands. This is not considered much better than the one with GMT 0.

As EuroRange is another strategy relying on the GMT offset, here is a backtested for it with GMT+1 to distinguish the effect.

EuroRange, didn't show a better nor worse performance than in the backtest with GMT 0. Its GBPUSD implementation wasn't a good idea to begin with and it remains at the same level.

Trading Strategy

Forex Combo System integrates four entirely separated strategies:

• A scalper strategy that seeks to snatch small market movements. It sets to take profit at 21 pips, but it decidedly early closes the positions if the market doesn't go with it, and this may result in less than 21 pips profit or even a small loss. Its stop loss is at 300 pips that may be appear huge, but it almost never gets hit – the EA usually closes the positions a long distance before getting there.
• A breakout strategy A breakout strategy based on the "average true range" or ATR indicator. In short, if a price surpasses some given limits a breakout takes place; in many situations, these breakouts continue to move in the same direction as the price. The ATR indicator measures the average range that a currency has during a given period, that is then coupled with the current market data, giving a dynamic upper and lower limit. So, the breakout strategy is dynamically adapts to the market conditions and monitors the starting trends, using a trailing stop for its positions and a take profit target of 500 pips, that is reached occasionally, although the trailing SL tends to close most trades. In contrast to the scalper strategy, the initial stop loss of the breakout strategy is very strict that is 30 pips, typically leading to a big win following several losses in a row, that win more than recoups the losses.
• A reversal strategy in which a market channel is determined and the price is expected to reverse and start a new trend once it reaches the channel limits. Th stop loss of this strategy is 70 pips and the take profit target is 160 pips, but all the positions going into profit are sporting a trailing stop. This may generate some losses as could be expected, but it also generates some wins, gaining a well positive result after all is completed. You should note that this strategy only operates between 22 and 01 GMT (aka only opens trades).
• EuroRange Strategy which is a very simple system, during the European session it tries to capture the - rather large - price movements by identifying an existing trend and opening a position - long or short - at 7 AM GMT, with a relatively tight stop loss of about 50 pips for EURUSD and 60 pips for GBPUSD which gets a trailing stop once it start profiting.

Every strategy parameters could be modified, but this is not recommended as they perfectly performs well as they are set.

Parameters

The EA settings are extremely versatile and the may cause confusion to a new user. However, it's perfectly good to leave the defaults as they are, modification of the money management parameters is the only required setting modification.

The manual manages to be brief and in target. The installation instructions are explained in a few pages, then the EA parameters are discussed, with a range suggestion for every numeric parameter. The effects of parameter changing on the operation of the EA are not clarified and if you insist changing any of them, I suggest backtesting thoroughly.

You should note that the EA supports fixed lots in addition to dynamic money management, using a percent of the account available margin, so you should take in consideration that if you'd run another EA on the same account beside Forex Combo System, the lots traded by the later would have been lower if the other EA has open trades.

If you are a very conservative risks supporter, then you should limit the dynamic money management to 2 for each system.

The money management is clarified quite thoroughly in the manual recommending not to trade it with less than $1000 accounts and to choose your trading volume taking in consideration that 5-6 consecutive losses of 60-70 pips is possible to encounter. This is just how the EA behaves in a way that you should be prepared to receive some losses before gaining the big wins, while in most cases losses caused by one strategy will be compensated by wins of the other strategies.

Practically, you can trade it with less than $1000 accounts by using cent accounts, like those available at LiteForex or FXOpen (micro).

Official Website

Concerning marketing evaluation, I consider Forex Combo System homepage a woolly. It just shows a few backtests lasting for 6.5 years, a three minute video of a slightly over leveraged visual backtest and a forward test, in addition to the results and trading privileges verified by myfxbook. Here is a myfxbook up to date balance graph, looking quite outstanding at the time of this review posting, about 1 year after its launch:

The Bottom Line

Obviously, the most profitable strategies is still the EURUSD scalper and breakout, in addition to the GBPUSD scalper, next to them is the EURUSD reversal, then the GBPUSD breakout and EURUSD EuroRange. Finally, GBPUSD reversal and EuroRange seem to be the worst ones.

The final word, Forex Combo System v3.0 is a nice upgrade. Recommendations are summarized in using the default settings with 2.0 risk for each strategy, keeping all strategies enabled is not a good idea; for GBPUSD, the Reversal and EuroRange strategies should be disabled.