Forex Matrix Pro Trading System Review
The Forex Matrix Pro Trading System is a trend following strategy designed for trading the foreign exchange (forex) market. This system aims to help traders identify and follow strong market trends across different currency pairs and timeframes.
Overview of the System
The Forex Matrix Pro Trading System for MetaTrader 4 consists of several custom indicators that work together to generate trading signals. The key components of the system include:
- Matrix Volty Channel Stop (VCS) – Plots dynamic support and resistance levels and helps determine trend direction. It also provides trade entry signals.
- Heiken Ashi – Smoothed candlesticks filter out market noise and identify overall trend.
- Matrix Signal Bars – Colored histogram bars signal momentum. Green bars suggest bullish momentum while red bars indicate bearish momentum.
- Trend Alex – Arrow based indicator identifies overall market trend direction.
- FxTraderPro – Additional arrow indicator that confirms trend direction on multiple timeframes.
How the System Works
The Forex Matrix Pro Trading System is primarily trend following but it also utilizes some elements of momentum trading. Here are the key rules for trade entries:
A buy signal occurs when:
- Price pulls back to Matrix VCS support level or bounces off it.
- Heiken Ashi bars turn green.
- 20 period Moving Average moves above VCS channel midline.
- Majority of Matrix Signal Bars are green.
- Trend Alex and FxTraderPro signal bullish trend.
A sell signal occurs when:
- Price hits Matrix VCS resistance level or breaks below support.
- Heiken Ashi bars turn red.
- 20 MA crosses below VCS midline.
- Majority of Matrix Signal Bars are red.
- Trend Alex and FxTraderPro signal bearish trend.
In addition to the entry rules, traders are advised to trade in the direction of the prevailing trend on higher timeframes.
Benefits of the System
The Forex Matrix Pro Trading System offers some key benefits:
- Trend following strategy – Trading in direction of overall trend improves odds of success.
- Multiple timeframe analysis – Evaluating trend across different timeframes provides confirmation.
- Custom indicators – Proprietary indicators designed specifically for system rules.
- Pre-defined entry rules – Clear entry signals provided by indicators. Removes guesswork.
- Works on all pairs and timeframes – Can be applied to any forex currency pair and timeframe.
Drawbacks of the System
While the system has merits, there are some potential drawbacks to consider:
- Lagging indicators – Smoothed indicators like Heiken Ashi tend to lag price action.
- Requires monitoring – Needs active monitoring for trade management.
- Overoptimization – Too many optimized custom indicators. Potential for curve fitting.
- Ignores fundamentals – Purely technical system does not account for news or events.
- No exit rules – Lack of defined exit strategy can lead to giving back profits.
Performance and Backtest Results
According to the developers, backtests of the Forex Matrix Pro Trading System were conducted from 2007 to 2020 across multiple currency pairs.
The results showed winning percentages between 67% to 72% with an average reward to risk ratio of 1.2 to 1.5. The largest observed drawdown was around 20% to 25%.
However, it should be noted that these backtest results cannot be independently verified. As with any trading system, past performance does not guarantee future results.
Using the System in Real Trading
When using the Forex Matrix Pro Trading System for live trading, there are some best practices to keep in mind:
- Use proper risk management with stop losses and position sizing. Do not risk more than 1-2% per trade.
- Be selective with trades. Take only high probability setups, do not force trades.
- Consider combining with fundamental analysis to improve timing of entries.
- Actively manage trades. Move stop loss to breakeven once position is profitable.
- Trail stop to lock in profits as trend extends. Have exit strategy for profit taking.
- Monitor higher timeframes. Avoid trading against larger trend.
- Adjust for different market conditions and volatility environments.
- Start with demo trading to gain experience with system before risking real capital.
Forex Matrix Pro Trading System Verdict
The Forex Matrix Pro Trading System takes a rules-based approach to trading forex trends across multiple timeframes. The combination of custom indicators aims to identify high probability trades in the direction of the prevailing trend.
However, like all technical trading systems, it has limitations in terms of lagging indicators, lack of fundamental context, and the possibility of overoptimization. Real-world performance may not match hypothetical backtest results.
Overall, the system seems best suited for traders who are disciplined in applying risk management and who can complement the technical signals with an awareness of the fundamental drivers of forex price action. As with any trading system, discretionary elements and active management are still required for successful implementation.