Advanced Users

What are Short Cycles?
You will notice that Forex Envy offers a verity of Modes to choose from. Some of these Modes are known as Short Cycle Modes. This simply means that the settings open and close trades on a much smaller time frame compared to our standard HV, NV, LV and Power Long Cycle Modes.

For example: If there is a 100 pip movement in one direction Short Cycle Mode may open a basket totaling ten levels while the Standard or Long Cycle pairs may only open up a basket totaling three levels. This may give you the impression that Short Cycle settings carry more risk. This isn’t quite the case. Short Cycle Modes close their baskets much sooner than a Long Cycle basket will, this results in an increased chances of closing out the Short Cycle basket for a profit from a small retrace in price movement.

Most of the Short Cycle settings only need a retracement of 18 pips while the Long Cycle may require a retracement of around 65 pips. In fact Short Cycle modes are fairly stable in a twelve year backtest using uninterrupted testing data.
So why do Short Cycle mode need discretion?
To avoid volatile market conditions than can create large fluctuations in currency price value.

If the market is volatile and your broker “slips” or “is busy” for Forex Envy’s entry point by let’s say 10 pips, there is also a good chance when your basket of trades closes, they will do so for a net loss as oppose to a net gain. The bigger the slippage or busy error your broker hands you, the larger the potential loss could be.

This is especially true if the slippage occurs in a larger basket. This is not the case with Long Cycle settings because the larger take profit can absorb the slippage and still maintain profitability. For this reason we need to use discretion choosing when to use Short Cycle Mode.
Trading through the weekend
Weekend Gap is usually heard on traders slang, it refers to difference between the closing price at the end of a trading week, with the opening price when market wakes up the next week. Gaps can create a situation where short cycle pairs will close a basket for a net negative. For this reason we recommend activating the Freeze After TP Scheduler to automatically engage the Freeze After TP function 6-8 hours before the market closes on Friday.

You can leave the Short Cycle pairs to trade over the weekend, however to be on the safe side we recommend closing your open positions. It is important to note that Short Cycle mode is much more susceptible to large spikes caused by breaking news or panic than Long Cycle currency pairs. This is especially true for the EURUSD and GBPUSD pair. These two pairs are the most venerable to extreme volatility and spikes in the market.

For example: in a twelve year backtest of the EURUSD Short Cycle pair there are a few instances where a large amount of drawdown was created due to a large short-term spike that potentially could cause a margin call. Whether or not your account would have been able to withstand this anomaly depends on the amount of equity in your account and leverage used. Either way, we do not want to gamble with our earnings account(s).
Setting up your Short Cycle pairs
First open the following 30 minute charts:envy chart

Now select the appropriate Short Cycle mode you would like to run starting with the EUR/USD pair. Make sure to choose a unique magic number for each currency pair. If you have the “User News Filter” to “True” you will notice that we have programmed (under the title “Weekend Gap Avoidance”) your Freeze After TP Scheduler to turn on before the market closes and to turn off when the market reopens on Sunday to resume normal trading.

If a large event is coming up that will result in high market volatility we recommend setting the Scheduler to automatically shut off the Short Cycle currency pair(s) at least five hours before the event to avoid possible losses. If there is a significant chance of a government intervening in a specific currency we recommend shutting down the affected currency pair(s) until conditions normalize. In today’s currency market there is a never ending number of scenarios that can jolt the markets and we will not be able to avoid every event that occurs. The best we can do is try our best to avoid foreseeable hazards and keep moving our winnings into our Savings Account.
Growing your Earnings Account
If you have transferred enough money from your Earnings Account into your Savings Account to cover your entire initial deposit, you may want to grow your Earnings Account. Doing so will be virtually risk free because your Earnings Account (Forex Envy) has doubled, and all of the capital currently in your Earnings Account will be winnings. We do not recommend jumping to the next size of set file until you have transferred all your initial investment from your Earnings Account into your savings account (doubled your money).
Backtesting settings for improved results
Team Envy uses uninterrupted data to test our settings accurately. Unfortunately the data you can download for Metatrader is full of gaps that make accurate backtesting shoddy at best. If you would like to actively search for better settings with us to help improve our results we recommend joining Asirikuy has a host of useful forex tools as well as high quality backtest data that work quite well for testing Forex Envy. They also have some expert advisors on the site that you may want to use at low levels of risk for your Saving Account. Further discussion about backtesting and strategies for safely raising the capital in your Savings Account can be found in our Forum.

Peace and Profits, Team Envy

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