The analysis has been conducted using the 13 Year Back Test with default-recommended parameters and Max Allocation: 10 (Medium-High Risk). The test was run on high quality Alpari UK data between the period Jan 2000 to Mid Jan 2013. A moderate spread of 1.5 pips was used for conducting these tests. The minimum lot size and increment was 0.1 (mini lots) and start capital = US$ 100,000. This is equivalent of conducting the test using micro lots (0.01) on a $10000 start capital which is very practical for most users.

Parameter listing for the backtest is given below:

Parameters used:
MaxPositions = 4; Max_Allocation_Per_Trade = 10; Fixed_LotSize = 0; TSL_Level1 = 75; TSL_Level2 = 150; TSL_Level3 = 250; Basket_MaxLoss = 500; Pair = 1; Force_Close_At_MaxLoss = 1; MagicNumber = 99118260; EA_COMMENT_PREFIX = "Synergy "; Friday_Trade = true; Allow_Slippage = 5

MyFxBook strategy tester output is shown below:

The logarithmic chart given below makes both drawdown and growth equally proportionate in all periods.

The 100 trade moving average (approximately 6 month period) of the equity is plotted in green. It can be see that the equity manages to stay above this line comfortably. Dips below this line indicates above average drawdowns. We see very few occasions when the equity moves below this average line, but the recover from these dips is fast. The longest drawdown period observed on the gain chart is about 4 months long.

The following information derived from the test results may be of interest:

Annual equity gains compared with returns of S&P 500 Buy & Hold strategy:

One of the main reasons for user of the system to get disillusioned within a short time is because of wrong expectation. The 5 year or 12 year backtests project the long term profitability of the EA. Although the tests show that the DD and losses are normal part of the strategy, the user in most cases are not able to handle similar drawdowns in live trading.

The figure below illustrates the above issue:

The above figure shows how our brain ignores the small kinks in the 13 year back test and it tends to focus on the equity move upwards. The net gain in millions usually makes the drawdown of 20% seem negligible. But when the same set of trades is seen in the year wise test, the drawdown appears as you would really be seeing it in real live trading.

As can be seen it would be more practical to observe the trades on a year by year basis to understand and develop faith in the system. This will enable traders to handle normal drawdowns in live trading without fear and uncertainty.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Click Here to download complete MT4 Strategy Tester Report of this test

The chart below show the number of days drawdown was in progress and the number of days required for the EA to recover from the drawdown. The red bars indicate DD period and the green directly above indicates the number of days it took to recover from the lowest Point back to breakeven.

As can be seen from the chart, most drawdown periods on historical tests have been less than 50 days long. We see four occasions when the DD was between 50 to 100 days. The DD periods were between 100 to 150 days on five occasions during the 13 year test period.

The recovery from drawdowns is also seen to be reasonably quick, with equity gaining back lost ground within 50 days most of the time. From this chart, it should be clear that the EA's strategy will involve drawdown periods that may last between 1 to 2 months on an average. In some cases, the drawdowns may extend to about 5 months. DD phases are an unavoidable and an important part of any strategy. It is very important to continue running the EA since recovery will follow at any time. Stopping the EA will during DD periods will most likely result in missing out on the recovery phase.

The chart below shows the same drawdown/recovery periods in order of occurrence during the 13 year period.

The following chart shows the 13 year backtest returns split into a monthly gain chart.

The EA has more gaining months (95) compared to losing months (61). The average of gaining months is over 7% and that of all the losing months is under 4%. We also see that a losing month is followed by a strong set of winning months. Very few consecutive losing months are seen, but must be expected in future also. The recovery from DD from such periods is seen to be quick. The maximum loss seen in a month is about 16% and the maximum gaining month brought in about 43%. Users will need to set the risk level based their level of comfort - A single losing month of 16% should not force the user to stop trading the EA. If you are not comfortable with such DD level or % loss in equity, the Max Allocation should be set to lower levels (8 or 5).

Profits are seen in almost all kinds of market conditions seen over the years - Synergy V4 can be expected to perform reasonably well in future since it can handle most price actions well.

The following chart shows monthly cumulative gains seen in the 13 yeat backtest.

We consider this to be a very important part of the analysis. The results here are derived from our internals lab tests and are not seen in the back test results.

Synergy V4 can open multiple positions in the same directions. The Ea can add to its first position which is in profit or average the price when the earlier \ positions are in floating DD. Synergy V4 employs a trade management strategy that is based on Fib levels. The EA does not place trailing SL on the broker side but tracks the closing price of every H1 bar. If the initial targets are triggered, the Trailing SL are set at hidden levels based on the baskets net gain.

The earlier versions of Synergy had very large floating gains or loss before the trade closed. This made it very difficult for most users to trade the EA. Synergy 4 has a control on the max loss the basket would be allowed to trade. The EA will close out any trade basket if the floating loss exceeds the MaxLoss set by the user at H1 close. This value is set as 500 pip in the default and is recommended.

The trailing SL is also triggered when the basket's gains at H1 close exceeds the target levels set by the user (levels 1,2 and 3). The EA uses a unique scaling up of target levels to account for the number of positions in the basket. This enables the EA to give enough room for the trade to go towards higher gains, while at the same time have a good profit locking mechanism in place.

The following charts show the floating gains and floating loss of all trade baskets that went on to close at a profit.

From the above chart it can be seen that it is very normal for the EA to be in floating gains of over 100 or 200 pips. The trailing SL gives enough space for the EA to achieve higher targets and this may at times make the EA give up these floating gains to close at relatively smaller profits. The average size of all baskets that closed in profit is about 167 pips (with a success rate of about 48%)

The following charts show the floating gains and floating loss of all trade baskets that went on to close at a loss.

From the above chart it can be seen that it is very normal for the EA to be in floating gains of over 100 pips, but go on to close the trade basket for a loss. This kind of space is required for the strategy to succeed in long term. We understand that it is difficult for some users to see a basket of trades which is in +100 pips of floating gains, give it up to move into negative. There are other strategy's and EA's which target to capture smaller targets and floating gains at very tight levels. PhiBase scalping strategy (Ray Scalper) is one such option. Synergy V4 aims for much higher gains since its success rate is close to 50%. The average gainers need to be bigger than the average loss and it is very important not to interfere with the EA's trading in any way. Closing trades to book some smaller gains will not be good for long term success.

The average size of all baskets that closed in loss is about 98 pips (with a losing rate of about 52%).

The Monte Carlo simulations of all baskets (treating each set of basket as one trade) was conducted. The results were in total agreement with the monte carlo simulations conducted on the individual trades - which further validates our worst case estimates. The absolute worst case drawdown at 100% is seen at 42%. The average of all DD's above 95% of the cases is about 25%. The Chart below shows MC simulations of worst DD's from the 100000 iterations.

A Monte Carlo method is a technique that involves using random numbers and probability to solve problems. Monte Carlo simulation is particularly useful when you want to predict the overall outcome of a series of related events when you only know the statistical probability of the outcome of each component event. This study can be used to predict the worst case drawdown that may happen in future if the price action is no longer suitable for the trading strategy.

The Monte Carlo simulated DD for the worst 32% of the 100000 cases is presented in the chart below (Max Allocation : 10):

Monte Carlo Simulations for Worst Case Drawdown using Very Low, Low and Medium Risk Levels.

The Monte Carlo simulated DD for the worst 32% of the 100000 cases is presented in the chart below (Max Allocation : 5):

The Monte Carlo simulated DD for the worst 32% of the 100000 cases is presented in the chart below (Max Allocation : 8):

Monte Carlo Simulations give a statistical prediction of what the worst case drawdown one should expect before choosing the risk level with which to trade the EA.

The EA will trade with the minimum lot size permitted by the broker which would be 0.01 in most cases. If the account balance is US$ 750, trading the EA with any allocation level will default the lot size the minimum allowed (0.01 in most cases). This would also make the money management ineffective. The risk level on this $750 account would be similar to using Max_Allocation of 15. The average drawdown may be expected to be about 20%. Maximum historical DD in the 13 year test was seen to be close to 35%. The monte carlo worst case simulation DD is estimated at over 50%.

If the account size is lower, the risk on the account would be much higher. It is highly recommended to use cent or nano accounts if you are trading with account sizes smaller than US$ 1000. This will enable the EA to operate with proper money management and risk levels.

Strategy test result comparison between v4.03 and earlier versions.
Backtest results of V2.3 and V3.2 were conducted between 2000 to Mid 2012.

Why upgrade to Synergy version 4?

Synergy V3.2 (and earlier versions) were build keeping the principles of pattern based trading at the core. Pattern based trading is slow, requires patience and lots of room for the trade to work. While Synergy v3.2 captured large pip gains, most users provided suggestions to make the EA lock in gains better, reduce DD and improve entry levels to avoid floating drawdowns.

One of the major issues with V3.2 was the requirement to avoid EA/MT4 restarts. While V3.2 took control of any open trades on restart, the EA did not close out the trades when they are in DD. It instead waits for better levels. This issue has been solved in V4 - the EA will not hold any trades beyond the Maximum floating DD levels permitted by the trade management module.

Restarts on V3.2 also caused some variations in the initial trades when compared to other accounts. This was due to the way V3.2 initialized and looked back to preceding patterns. In V3.2, The EA looked back only till it finds the last tradable pattern leg. Version 4 looks back to four pattern legs at all times - on restart and while trading continuously. All entries are based on the harmonic price patterns legs and channels derived from this. This eliminates the issue of restart - The new version 4 will be able to perform normally upon restarts.

Synergy V4.0 has been designed from the ground up - without compromising on the concept of trading patterns. The trading strategy has been made more user friendly: improved trade entry levels, lower floating DD's, excellent profit locking with Fib based trailing levels. The strategy does not wait for pattern formation, but trades every pattern leg. Pattern confirmations are also traded. V3.2 looked back on for upto 3 months using weekly and daily values/indicators. In V4.0, all analysis is based only on values derived from H1 bars. The EA walks back to upto 4 pattern legs on restart and derives all initialization parameters. This will fully address the trade variation issue faced on restart of MT4/EA.

Version 4.0 is a major upgrade and the changes/improvements implemented are given below:

• EA/MT4 restarts will not affect initial trades
• Minimize difference between broker accounts
• Increase in gain potential for lower drawdown
• Average trade holding time reduced
• Will be able to trade EURUSD and USDCHF.
• Trade management module design based on Fib Levels
• Dynamic hidden trailing levels for locking in of gains
• Trade reversal (implemented in v3.2) will be discarded in V4.0 (gives rise to differences between accounts)
• Trade entries on every pattern leg - V4.0 does not wait for pattern formation
• Harmonic ABCD pattern based entry implemented
• Improvement in success rate of first entry
• Improvement in entry for Add on/averaging positions
• ALL weekly and daily indicators have discarded and replaced by dynamic long period H1 channels.
• All patterns and channel projections calculated internally by the EA (V3.2 used the line objects on charts for deriving these values)
• Fully compliant for testing using H1 Open bars only

We are sure you will find Synergy V4.0 to be profitable, robust and a great way to trade price patterns automatically. At PhiBase, we believe that any EA, however good, is only half the work done. The other half is in the traders hands - without your trust and confidence the system will never be successful. We hope Synergy V4 will be less stressful and easier for you to build confidence into the strategy. Our team will always be there to provide you with the best support and factual information in enabling you to succeed trading with this EA.

Synergy V4 has a greatly improve trade entry strategy. This has reduced the floating drawdowns considerably. The effect of varying maximum positions is given below.

The Max Position parameter controls the amount of capital allocated for each position. When Max Allocation : 10 is used with MaxPosition : 4, the allocation for each position is 2.5%.

When Max Allocation : 10 is used with MaxPosition : 2, the allocation for each position is 5%. This would mean a significant increase in risk level for each position. If the same level of allocation is to be maintained for each trade, the MaxAllocation will need to be set to 5.

We do not find any reason to recommend reducing max positions allowed.

When Max Allocation : 10 is used with MaxPosition : 6, the allocation for each position is 1.67%. This would mean a significant decrease in risk level for each position. If the same level of allocation is to be maintained for each trade, the MaxAllocation will need to be set to 15.

We do not find any reason to recommend reducing max positions allowed.

When Max Allocation : 10 is used with MaxPosition : 8, the allocation for each position is 1.25%. This would mean an further decrease in risk level for each position. If the same level of allocation is to be maintained for each trade, the MaxAllocation will need to be set to 20.

We do not find any reason to recommend reducing max positions allowed.

Since launch of PhiBase PRO v1.23 last year, our development team has been working towards providing portfolio diversification through trading additional pairs.

USDCHF was used as an optional pair in V3.2 - Synergy V3.2 was a basic pattern traders (trading price patterns on completion or on a predictive basis).

USDCHF's high inverse correlation with EURUSD and lower noise enabled Synergy V3.2 to trade this pair successfully. We have been recommending this as an optional pair for trading with version 3.2 since patterns which could not be identified or missed out on EURUSD were captured on USDCHF price action.

Version 4 trades using a much more advanced pattern recognition algorithm - The price action is broken down in harmonic pattern legs in the form of ABCD and normalized to remove time/range/lag effects. This presents excellent trading opportunity on every leg of the price pattern since pattern leg under formation is always treated as the D leg in the ABCD price pattern. Synergy V4 also trades channels. This approach enables a much more entry opportunities for the strategy and much fewer chances of missing a trade entry. So trading EURUSD is more than sufficient with Synergy V4.

USDCHF can add to some additional gains when traded along side. But since this pair is highly controlled and intervened, the gain potential is much less than trading EURUSD. Portfolio studies indicate that the lower gain potential presented by this pair does not provide enough incentive for the increased risk. The fixed lot backtest conducted on USDCHF over 13 year data is given below:

USDCHF has been increasingly mirroring the EURUSD price action. The decrease in spreads over the past couple of years is presenting a reasonably valid opportunity to trade this pair with Synergy V4. However, the longer term studies and analysis do not support favorably due to the overall profitability for the increased risk involved. The Fixed lot backtest of both EURUSD and USDCHF shows that there the net gain in pips increases by around 30% when the two pairs are traded in the portfolio with Synergy V4. However there is increase in maximum drawdown by about 5% when compared to Max DD of EURUSD alone.

Click Here to download complete Combined (merged) Startegy Report of this test

A much better combination is found when trading Ray Scalper along with Synergy EA. A much higher net gain is achieved for reduced/same level of drawdown when trading Synergy EA and Ray Scalper in the portfolio.

Synergy V4 is a pattern based strategy with good potential to profit in the medium to long term. PhiBase has developed Ray Scalper which is a safe, broker independent scalping strategy with potential for short term gains. Ray Scalper is designed to provide good portfolio diversification for members running Synergy EA. The two EA's work very together. The following portfolio studies provide more details on the benefits of trading the two EAs.

The 13 year backtest conducted with Synergy V4 on default parameters and allocation 10 is given below:

The 13 year backtest conducted with Ray Scalper on default (4411) parameters and allocation 8 is given below:

Synergy V4 and Ray Scalper V1.9 trades provide for excellent diversification. The results of the portfolio when the two EA's are run on separate accounts is presented below (NFA compliant brokers will require EA's to be run on separate accounts). In this study, the account balance increase/decrease does not affect trade size of the other EA.

Click Here to download complete Combined (merged) Startegy Report of this test

If the two EA's are run on the same account, the effect of compounding will be much greater.

When the two EA's are run on the same account, the effect of compounding is astounding. The maximum drawdown in the combined portfolio is seen to be 27%, but the net gain increased exponentially (3.3 Billions!). It is impossible to fully benefit from the effects of compounding and attain such trading lot sizes in real live trading. The results must be only used to find the effect on CAGR, drawdown and stability of the portfolio.

Results of the portfolio with very low risk levels of MA 5 for Synergy and MA 4 for Ray Scalper is presented in the chart below.

We strongly recommend running Synergy V4 and Ray Scalper V1.9 in your portfolio since the two EA's can work very well together to increase potential gains without much change in maximum drawdown or MC worst case estimates.

The advantages of running Synergy and Ray Scalper is clearly seen in the historical drawdown periods charted below. The longest drawdown period is reduced to just about 80 days (less than 3 months) even over a period of 13 years.

Synergy V4 and Ray Scalper V1.9 will provide a fantastic combination to provide short, medium and long term gains for your account.

The equity curve of any trading strategy will never be smooth for the simple reason that no strategy can guarantee 100% success rate. Although the equity curve moves up and down, a good system profits by its ability to have an edge in having comparatively larger upward movements. Synergy EA has a definite edge to being profitable this way.

Someone may start trading during one of the upmove and record gains right from the start. Some others may have started when the equity curve was just about to or when it is moving down. In this case the user may go into drawdown initially. It would not be possible for judging the EA based on these initial set of gaining or losing trades.

Synergy EA has a very good distribution of gaining phases. The losing phases are smaller than the gaining phases. It can be see that irrespective of the period of starting the EA, the account will not be in DD for long on a monthly basis. There is an equal possibility of getting started on a gaining phase or a losing streak due to success rate of close 50%. This should not be a cause of concern.

The following chart shows the 13 year backtest returns split into a monthly gain chart.

The EA has more gaining months (95) compared to losing months (61). The average of gaining months is over 7% and that of all the losing months is under 4%. We also see that a losing month is followed by a strong set of winning months. Very few consecutive losing months are seen, but must be expected in future also. The recovery from DD from such periods is seen to be quick. The maximum loss seen in a month is about 16% and the maximum gaining month brought in about 43%. Users will need to set the risk level based their level of comfort - A single losing month of 16% should not force the user to stop trading the EA. If you are not comfortable with such DD level or % loss in equity, the Max Allocation should be set to lower levels (8 or 5).

Profits are seen in almost all kinds of market conditions seen over the years - Synergy V4 can be expected to perform reasonably well in future since it can handle most price actions well.

If you find our refund policy to be deterrent in making you purchase decision, we recommend you to study the statistical analysis presented on this page. Some traders claim refund on seeing some losses in the account, while this would just be a normal drawdown and part-parcel of the strategy. Such refund policies actually cause more harm to traders by making them opt for a refund instead of continuing to run the EA. Purchase decisions are made without fully understanding the strategy and with expectation from the system. In most cases the trader loses money because they stop the EA the while in DD and miss the recovery.

We want to see our products work successfully on our member accounts. This is only possible when the user has good understanding and confidence in the product. We aim to increase your confidence in our products by providing technical reports, detailed analysis, factual information, transparency and good support. The refund policy is mostly a marketing gimmick to enable the prospective buyer to jump in without any delay. PhiBase will not follow such methods to sell our products - We will instead trust our development efforts, information and performance to convince you to take a well educated decision.