This post is intended to warn people about "Forex Investing" or "Currency Trading" as it is also known as. It is directed first at a company named Compassfx whom I have recently gotten involved with and their trading method known as "Synergy".
The "Synergy" method was developed by Dean Malone, who worked for Globaltec as an instructor for their products. Globaltec being the worst company in the industry in ripping people off that I have seen. I have tested the method for several months, and live for about 1.5 months as of April 10. I thought it was going to work well but found it doesn't.in fact it is no better than Globaltec's 4X Made Easy, which for the most part, everybody who used it found it to be useless.
The method uses a chart with a different type of candlestick patterns called the HeikenAshi_DM. This is Dean's version of the HeikenAshi candlesticks. On the chart he uses a 5 period moving average of the low and a 5 period moving average of the high to create a band on the price chart. His theory being when the candles are going up and have closed outside the bands to go long or short when the opposite condition exists.
The trade is then confirmed by an indicator he developed that is only available on the Metatrader Platform. The indicator has a band similar in nature to a Bollinger Band and three lines of different colors. The yellow line being what he calls a Market Base Line, the red line being what he calls a Trade Signal Line and a green line he calls a RSI Price Line. The indicator has three lines across the chart. One at 32, one at 50 and one at 68.
Dean says that when the candles indicate a long trade, if the green line is pointing up, and is above the 50, and above the yellow line, and above the red line, and the longer and shorter time charts are in agreement a highly reliable trade can be made. He says to never go short when the green line is above the 50 line and never go long when it is below the 50 line. For a short trade the candlesticks must show a downtrend with the green line pointing down, be below the 50 line, and below the yellow line, and below the red line. He has other rules he uses that are contained in the basic video training video found on the Compassfx website.
Dean recommends setting stops at or just beyond the opposite moving average band of the direction of the trade. The problem with that is getting a decent risk to reward ratio. Which was the same problem with Globaltec's 4X Made Easy program which he has apparently patterned the Synergy method after, as far as I can tell. If you have to use a stop that gives a negative risk to reward ratio when you lose you lose big. So big in fact one trade can lose more than many good ones can gain, therefore producing an overall losing trade ratio.
I hoped to be able to trade a swing trade style on day charts as I don't like to sit and stare at a computer screen hour after hour which is required if an active or super active trader. I started testing it on 1 hr. Charts but I was losing on those so I moved to the day chart applying the methods Dean says to use, which was also not successful. I put my stop like he said to. When I traded on the hour charts I was setting a limit of 50 pips. On a 4 hr. Chart I was setting a limit of 75 pips and on a day chart a limit of 100 pips. With all these limits I was at a negative risk to reward ratio, which as anybody who trades knows is not good enough to produce an overall winning condition in trading.
I am not going to waste any more time on this method, as I am not able to be successful using it. While Dean claims, of course, it will work, I am not able to so in the end I have to conclude it is no better than 4X Made Easy which I tested more about 1.5 years trying to find a way to use it successfully with no success.
You cannot change the colors of the candles and have them stay, nor the lines on the Traders Dynamic Index. When you change chart times or close the program they revert back to the layout Dean developed them as, when you reopen the program.
Since he developed it on the Metatrader platform you need to be aware of the pitfalls of using that platform. The first being your trailing stop requires your computer to be on, connected to the Internet continuously to reset the stop as the price moves. Other poor features of the platform are the period separators make no sense. You cannot set the clock, which requires you to make all kind of conversions to make sense of your trades. There are no 8 hr. And 12 hr. Charts, which it ought to have. The margin level percentages make no sense for most people, which should be easy to read and understand so you don't over leverage your account.
And finally the platform allows the brokers to lie about how much they collect. They claim it is only 2 pips on the EUR/USD and 3 pips on the USD/JPY but because it uses a bid and ask price they really get 2 pips going into a trade and 2 pips going out of the trade on the EUR/USD for a total of 4. And of course the same ratio on all the other pairs as well. If they used one price line and took their pips either going in or going out then it would indeed be 2 pips or 3 pips as they advertise but that is a major lie. Actually all platforms I have seen use this method so none of them are any different, but what they say is simply untrue.
I don't know what method might work yet, but so far my best success has been with John Person's methods which uses Pivot Points, combined with moving averages, and six specific candle patterns to predict successful trades. I have only been able to use it as an "active" trading style, which I don't want to do. That is why I have been looking at other methods that are said to predict good swing trades but I have not found one as yet. So it's back to the "drawing board" so to speak as I lost about $4,000 since I opened my live account using the Synergy method.
Good luck, and test any method extensively before you trust it making live trades. Even then continue to paper trade along with your live trades so you can really figure out what works and what doesn't.
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