According to the company's literature, the FAT Forex System's goals are:
- FAT-Profits-v2 indicator shows trading session range
- Gives breakout price levels for BUY and SELL trades
- Helps to determinate the right Stop Loss price level
- Alerts you with sound when a new breakout price detected
- FATv2 Trade Robot does almost everything automatically
- Easy to use: quickly install and trade
- One Time Payment - Updates included - No monthly fee
- Works on any account type, standard and mini accounts
- Works On All Brokers
The document also runs through an example using GBPUSD on a 15-minute timeframe, but the software supports any Forex pair on any timeframe.
FAT Forex System offers a template which is available on a right-click on a MetaTrader chart. The template clearly details the Buy and Sell Breakout level on the chart for your selected product. For example, the current picture for GBPUSD on a 15-minute timeframe is with a price buy stop of 1.60367 and a sell stop of 1.59805.
According to the author:
This system works with an automated alert component designed to sound an alarm when a breakout is imminent. Not only does this give you more freedom, and let us face it that is why we trade Forex anyway. It cuts down on the time that you need to spend studying charts and technical analysis.The Price Buy Stop also acts as Stop Loss level for Short trades and the Price Sell Stop level is the Stop Loss level for Long trades.
An Alert is triggered when a Breakout level is hit. The Breakout levels also adjust as time passes. For example, the GBPUSD Buy Stop adjusted from 1.60367 down to 1.60147.
However, it wasn't all plain sailing. Unless I had my configuration wrong, the price cross of the Sell Stop did not generate a warning Alert or record an Alert in the log. I would also assume the hit of the Sell Stop would offer a new Sell Stop price; but this was not the case as shown below:
Although it did record the Sell trade in the Trade Log.
Note: A New Sell Stop was generated after a new bar was added
The Help document does offer guidelines on how to use the system.
The system builder recommends using this system on days there are a large number of economic news releases to maximize market volatility. Breakout systems like this do work best when there are powerful directional trends to guide them.
The author recommends placing two Buy Stops and two Sell Stops. If these values change and you have no filled orders then your Buy or Sell Stops should be adjusted to the new values. If you have filled orders, then the adjusted Buy or Sell stops are ignored in the direction of the trade (although the flip side protective stop is adjusted accordingly).
There are two profit targets to take profits (for your two lot trades). The first profit level is set at the same distance to the stop loss and the second profit level is 4 times bigger. The profit targets are marked on the chart as a hashed red line.
When a trade reaches its first profit target the first of the two lot position is exited and the remaining lot has the stop raised to breakeven.
As the trade develops, the trailing stop may offer 'locked' in profits as it surpasses the breakeven price. However, in this environment it may be more prudent to exclude an order to switch to a counter trend trend when there is strong momentum in the primary trend. It is in such areas a trader's discretion is advised.
As shown above and in the examples given in the author's help document, for situations where price falls outside of one of the defined Buy or Sell stops then the cue to set an order at the exceeded price is ignored. So in the GBPUSD case above where 1.59805 was exceeded to the downside there would be no Sell Stop order set until the 1.59655 level was defined.
The final point of the system is to sell all positions (in GBPUSD) at the end of the regular trading session - effectively the beige highlighted area in the chart.
The system offers a cheat sheet of steps:
1) Check if there are any economic news on trading day for GBP
2) Wait for European/London session to begin
3) Place and manage STOP orders at Breakout levels
4) Once in the BUY trade, dont place BUY STOP anymore
5) Once in the SELL trade, dont place SELL STOP anymore
6) Move Stop Loss with the opposite Breakout level
7) Set new Take Profit levels when Stop Loss is changed
8) Close all trades at the end of European/London session
The Robot component automates many of the aforementioned processes EXCEPT it won't know when news announcements are expected or close a trade at the end of a trading session. The author recommends not entering a trade twice in the same direction on the same day, although I would think in a strong trending market it would be preferable to trade in the direction of the trend rather than take a counter trade (Or perhaps limit to just one trade per trade per currency pairing?). The author also recommends to use the system on the M15 timeframe, probably to ensure sufficient historic data is feeding into the analysis.
Other recommendations including starting the EA about 15-30 minutes before a big news item to reduce false breakout levels and increasing the risk of whipsaw.
The EA includes as part of its settings a slippage variable to increase the likelihood of order fills and the capability to adjust the Profit Target settings from x1 and x4.
Conclusion
Because of the structure of this EA it wasn't possible to run a cross-comparison with the other Meta Trader EAs. However, the system does offer a very clear process and interface which will appeal to breakout traders.
I like the systems lack of hoopla or disguised risk-to-ruin stop losses (like Aver4Sto or GPS Forex Robot); everything you need is presented on the chart and the robot component handles all entries and stop adjustments bar the end-of-the-day trading session exit. This is a system is designed to encourage good trading behavior rather than offer a silver bullet profit system; it works off swing highs/lows as the basis for trade entries or exits and it executes well in this regard.
At $47 it's certainly one of the better value EAs out there. As someone who likes to trade equities I could see a stronger application for this system on equities, but this falls outside the remit of a typical MT4 trader. All-in-all, I liked this systems' approach.
You can grab a copy here.
