Forex Ambush Review
Update – 15 March 2011
Please note: Due to repeated complaints from customers about poor performance and support, Forex Ambush is not one of my recommended forex products. This system has a high success rate, but there is always a real risk of larges losses that will result in a margin call. See the Top 5 Forex Robots page or sign up to my weekly newsletter to the right of this post for my latest recommendations.
My Original Forex Ambush Review
Forex Ambush has recently become one of the most popular signaling services online. The Forex Ambush website claims you will never have a losing trade if you follow their signals and they provide some impressive live account statements to proof it. [Click Here to Visit the Forex Ambush Homepage Now]
Forex Ambush
Normally I’m not very interested in ssignaling services, but this product certainly seems to offer something unique and because many of my readers have asked for a review, I decided to do some research and see what Forex Ambush is really about.
The question I wanted to answer was – if the Forex Ambush signals really are 100% accurate, then why isn’t everybody using them? The answer to this is the most important thing you need to understand before deciding to try this product..
Firstly I have to say that there is nothing false about the claims made on the Forex Ambush Holmepage. Since their signaling service was launched in September 2008, they have had a 100% success rate with no losing trades. However, the problem lies in in the way this 100% success rate is achieved. In order to have success with this system it is essential to understand the risks involved.
[Click Here to Visit the Forex Ambush Homepage Now]
Drawdown And Floating StopLoss
The Forex Ambush system does not make use of a fixed stop loss per trade. Instead it uses a narrow floating stop loss of 5 pips. What this means in lamens terms is that once your trade has moved into profit by 5 pips, it can never turn into a losing trade again and the worst that can happen is that the trade can be stopped out at breakeven. The Forex Ambush signals are very accurate and most of the time this 5 pip target is reached very quickly, but not always..
The problem with this system occurs on the rare occasions when the trade does not immediately achieve the 5 pip target and goes into drawdown. Drawdowns happens with any Forex system, but because Forex Ambush does not implement a fixed stop loss, there is nothing in place to limit your losses when a trade turns against you. The fact that no stop loss is placed on drawdowns is exactly the reason why this system has a 100% success rate, because a trade will stay open until it turns a profit, no matter how long it takes or how large the drawdown.
If you follow the Forex Ambush trading rules exactly, your account should be able to handle a drawdown of up to 600 pips, but according to their FAQ, the maximum drawdown they have experienced was only 200 pips and the average drawdown is somewhere between 5-40 pips. So far this system has a 100% track record, so their trading strategy is certainly very sound, but unfortunately there is always a chance that a large drawdown of more than 600 pips will occur. When this happens, many Forex Ambush customers could have their accounts wiped out by margin calls. This does not mean that Forex Ambush is not worth investing in, but it definitely means that you need to put some measures in place to manage this risk. (See recommendations below)
Conclusion and Recommendations
The fact that Forex Ambush carries a one time fee only and not a monthly subscription makes it unique and much more affordable than most other signaling services. In my opinion this product is one of the best signaling services out there and it is well worth the investment, provided that you understand the risks mentioned above and come up with a plan to protect yourself using one (or more) of the ideas below -
- Safer Lot Sizes and Account Balance
Forex Ambush recommends that you use 1 mini lot per $500 for mini accounts or 1 lot per $5,000 for full accounts. To be safe I would use only 0.5 mini lot per $500 mini account ot 0.5 lot per $5000 full account, which means you can handle a drawdown of over 900 pips before a margin call is hit. - Implement a Fixed Stop Loss
According to the Forex Ambush FAQ, the maximum drawdown they have experienced is 200 pips. This means that you should still have a 100% success rate if you use a fixed stop loss of about 250 pips. Sure, this could influence the 100% success rate, but at least your risk is limited and there is no chance of a margin call. - Exploit Drawdowns to Make More Profit
One way to deal with drawdowns is to use it to your advantage. Let’s say you open a long trade with 0.1 lots and the trade goes into a 50 pip draw down. With the Forex Ambush signals being so reliable, you can be fairly certain that price will eventually return to the initial level and hit your first profit target of 5 pips, so if you open another long position while the trade is 50 pips down, you will eventually earn 55 pips on this second trade, in addition to the profit of the original trade. Read more about this on the Forex Ambush FAQ.
Lastly, don’t rush into anything. This product comes with an 8 week money back guarantee, so take your time and test it thoroughly on a demo account for at least 1-2 months before you even consider trading with real money. Forex Ambush also provide an automated trading option now, so don’t forget to check that out as well.
