Well here we are again already, since our last report we’ve had the EUR about to fail only to be saved by yet another bailout package which caused the biggest rally in equities for 2 years, the EUR went up, Gold and Silver went down. As I sit here writing this, I note that Gold and Silver are on the up again with Gold breaking 1500 and silver above 35 while the EUR again turns down, I can only presume that the uncertainty about sovereign debt is again becoming a factor in the run to the safe haven of Gold.

Just what the right thing to do seems to be changes on nearly a daily basis and is one of the primary factors that drives managed FX as an alternative investment vehicle, typically aimed at achieving positive returns irrespective of the bull, bear markets or the currently rather sideways nature of the stock market for some time now.

In this post, we’ll again be mostly covering our in-house project accounts and then a review of the pre-release programme of our Pendulum EA. We decided not to post out a review of the accounts in our Managed FX Introductions Portfolio last month for reasons that will become more obvious upon a review of the managed FX intros page – yes they had one of their toughest months yet after a somewhat stellar run.

NMi Managed Accounts Moving Forward

Behind-the-scenes R+D on several promising managed accounts and EA systems continues as always: Please keep in mind that none of these are official Managed Account offerings as yet; we just want to provide you with a look see of the front-runners ahead of time for when and if they do make it to that stage. It looks like they may well make the grade very soon though with some strong performances this past month, albeit with just a little refinement required.

NMi Gridder EA Review

• Live AUD forward-test demo

  This month posted 10.73% ROI on balance (keep in mind this system runs continuous open positions)

Now considered as our ol’ faithful, this is a medium-risk fundamentals-based grid-trader swapping USD, EUR’s, JPY and some GBP’s for AUD’s. I was running my own live account at reduced-risk to keep a little more reserve “in the bank” to buy and hold the big dips, BUT it so rarely sees a significant pull-back and the opportunity to do that, so I’ve actually increased the risk on my live account. When the market turns against my position I have two options – hedging or else simply adding more money to the account. More money simply being Swiss Francs ready to be deployed if necessary.

Currently the AUD remains a resilient currency and that continues to play into this systems favour, but I’m always on the lookout for the start of the next rot, so to speak. On the subject of rot – during the last bout of EUR weakness and Greek debt woes the AUD/USD posted a signifciant low – just below the lowest swing low of recent times and right about where I had a protective hedge in the waiting which unfortunately was picked up by about 12 pips (or just over 1/10th of cent) which I am still carrying until I see an opportunity to dump it a better price or else wait for the AUD/USD to come back down again. The rest of the pairs trade didn’t pick up any hedges (although the AUD/JPY came close) and this serves to offset the negative overall affect of the hedge on the AUD/USD.

In review I didn’t really need to hedge and I outsmarted myself a little, I still had more gas in the tank ready for a bigger fall but just misjudged by a small fraction where the bottom should be. With an official offering of such an account, a more robust longer term trade setup would be employed which would have negated the need to even consider hedging so soon. Anyhow this is why we run project accounts for a good long while first so that any faults and deficiencies can be addressed well ahead of any official offering.

Total cumulative return has been 83% since November 2010, and of that 14% is overnight interest on open positions. This is also inclusive of an earlier $1100 hit, care of the Japanese earthquake which brought a big EUR/AUD rally, tripping 2 big stops.

NMi Mirror Account Review

This was very nearly a much better month again than we finally saw, but for a mistimed manual hedge release, it’s the story of my life sometimes but thankfully it didn’t cost much except the gains generated by the practice in the first instance. I stepped aside from any further manual intervention and let the EA do its thing to post a 2% return for the month, now currently running with just under a -2% open position and poised for the next move.

• Live MIRROR forward-test real money

  This month posted 2.01% ROI on balance (keep in mind this system runs continuously open positions)

As mentioned previously this is a trend-following grid-based EA, currently running at low risk on LIVE real money accounts. As I’ve always stated – it won’t set any records in the ROI department traded in the manner it does – but it’s a very easy to live with account (for account holder and trader!) in that drawdowns are very low and of that I’ve made certain. It’s extremely unlikely the system will ever see a significant negative month nor high volatility/drawdown, but the trade off is a lesser return.

NMi Pendulum EA Development

While the Never Ending Story continues. I was and still am at my limit, running and testing the following three separate configurations as outlined last month:

1. The original concept, which we’re now calling the Micro Configuration;
2. The second concept, which we’re calling the Nano Configuration;
3. And, finally the latest Scalper Configuration, which has backtested at 100%+ monthly ROI when trading just one pair, the highest return of these configurations.

More recently I developed another configuration which is based on a much bigger grid size, the trades of which play out over days and sometimes weeks somtimes in the hundreds of pips- which I refer to as the MACRO Configuration – versus the typcially intraday nature of the EA development thus far. It provides added confirmation that no doubt this EA has plenty of potential. At the same time it consumes so much time to fully test and develop each SET file for each new version in each configuration on multiple currencies, that I’ve decided to just focus on finishing the EA to its final level of functionality (for now!) before developing further SETs.

Each month I expect that this should be it, but one thing tends to lead to another – so now I have drawn a line in the sand and listed down on a document which the coder and I share between us, all that’s required to finish the EA. We have been working harder than ever this past month – and are very close now – but no sense in rushing anything at this late stage.

We periodically do dedicated Pendulum EA updates on our blog so be sure to check in from time to time if you’d like to keep an eye on the progress. I sure hope my next update is one where I can announce a completion and some exciting release details – we are planning to do another small pre-release to test the final version of not only our EA, but also the manual and forum support that comes with it so keep an eye out.

That’s all for this months report, except to remind you to keep an eye out for our Managed FX introductions update to follow in a week or so, and to check back at our website for breaking news on our Pendulum EA or other new account options. And to say that, as always, if you’ve any questions please feel free to ask by leaving a comment below, or via the contact form if you need to reach us directly on any of the above mentioned items. Either way we’ll always aim to give you a quality response by the next business day.