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Signals Reviews

Hedge King review: An original, safe and profitable forex strategy

Aug 28 2014
Hedge King strategy is one of the most popular among Myfxbook community. The system's performance is not spectacular but very sound with its low risk and sustainable profits. It's worth a look.
The system is using leverage of 1:500, trading on MT4 platform via the CySec regulated broker IronFX. The strategy is said to rely on technical analysis.
Hedge King is listed as a mixed strategy but it is mostly automatic since the orders are opened and closed simultaneously by blocks of five. These blocks contains always the same five currency pairs –  EURJPY, NZDUSD,  USDJPY,  AUDUSD, and EURUSD. It seems like the strategy seeks to minimize the risk by diversification of the trading instruments.
Now, there is a very strange correlation in Hedge King's trades. The system is always buying or selling together the first four of the pairs listed above. However, the EURUSD pair is every time traded in the opposing direction to the other four. For example from 21 of March until 24 of April EURUSD pair was bought while the other four pairs were sold. On 25 of April the system started to sell EURUSD while the other four were bought. 
Click image to enlarge.
It seems like this is a grid strategy since sometimes we witness up to 25 open orders. What is to note is that there are rarely more than two of the five positions that are closed with a loss recorded. And even when it happens, the total pips difference of the five positions in time of closing is positive and brings profit. In other words, so far there is not a month with a loss recorded. 
This profit is, however, average. The system obviously controls the risk in a very original way but as usual low risk equals low profit. At least with a starting margin of $1000 as the Hedge King's one. The question of the sustainability of the system arises. The average profit in pips per trade is just 5. Usually this means that the system will not survive a bad market period. In this case, however, with this original risk control opposing different currency pairs it may work like a sort of hedging between currencies. Hence the name of the system one may guess.
All in all, there is only one pair, the NZDUSD, which is not profitable although its profit/loss ratio is c.a. 2:1. Overall 64% of the system's trades were profitable.
As you may expect the drawdown of the system is very good practically not exceeding 4% for the last 6 months. The profit of the system till its starting in January is 70.87% with August being the record month with 11.42%. Not bad for such a safe strategy. The very low drawdown and the fact that the system is controlling the risk via sort of hedging may be interpreted in way that even if the explored market trend ceases to exist King Hedge will not suffer heavy losses.
Click image to enlarge.
The strategy can be followed with a Myfxbook's account. For now it has up to 90 real followers and approx. 300 with demo accounts. It is not sold as standalone expert advisor at least for now.
Before following a strategy we must estimate our profit in pips taking in account the slippage due to using different forex brokers as well as the brokers' nonidentical trading conditions. Given that the average profit in pips per trade of Hedge King is only 5 pips such small details can eat our profit.
Any opinions and statements in this article are strictly subjective and should not be treated as investment advice. and all of its authors are not affiliates of any of the discussed signal providers, expert advisors and their vendors.
TAGS: Myfxbook  hedge king  signal  forex system  forex strategy 
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