! How does the Software work? Which strategies can you use?

What are the Main Risks in your trading strategy and how can you possibly mitigate those?

Trading Strategies PowerScalper Expert-Advisor Profit-Management Bot
Where does the main risk in trading actually lie and why do around 80% of all traders lose money if you look at the disclaimers on the websites of the various brokers?

Here is one possible theory.

As we all know, the markets are unpredictable because it is a collection of emotional moods, pre-programmed algorithms, sudden events, big whales that have certain ways of manipulating them, and so on.

Although we now live in the age of artificial intelligence, nobody can tell us exactly what the price of gold will be in 10 minutes, an hour, 4 hours or at the end of the day.

When you receive your newsletter in the morning or at lunchtime, it is not uncommon for 3 different analysts to have completely different opinions on where the price should go today.

So what to do? Let's just take a closer look.

At first glance, the price trend of an instrument is very complicated because we simply don't know where it is going.

But if you take a closer look and analyze it, you realize that there are situations that keep repeating themselves all the time.

Let's take gold CFDs (XAUUSD) as an example. Gold is very liquid, is traded worldwide from Monday to Friday with all brokers and is extremely volatile. On extreme days, the price can now rise or fall by up to USD 100. Fluctuations of 10 to 30 dollars are possible at any time. Much larger increases or losses are possible over several days.

This opens up very high profit potential and at the same time harbors enormous risks.

In the past, we have often found that there are essentially only 4 situations in which the entire complexity of the price trend can be categorized.

1. Ranges, also known as a box. Here the price moves up and down like a sine curve over a certain period of time. Sometimes over and over again. This may only last 15 minutes, but can also last several hours. The size of the box is crucial for us, because the PowerScalper can handle boxes with a bandwidth of around USD 2 very well. If the price oscillates back and forth in a 2 dollar box, the PowerScalper makes good profits with the right settings and regularly collects its take profits using the zig-zag method.

2. Trends/breakout. At some point the price leaves the box and a trend breaks out. An upward staircase or a downward slide is formed. Such trends very often last 30 to 90 minutes before the price stabilizes again and returns to a box. One of the really big risks lies precisely in the breakout of a trend. Imagine the price climbs up a staircase by 7 dollars within 45 minutes. If the trading bot has not recognized the transition from the box to the trend and has opened a short position when the trend breaks out, then after 45 minutes it is in a drawdown with a price difference of 7 dollars. Let's say the trader trades with a risk of 1 lot, then at this point he is in drawdown with 700 dollars. If the price rises by 12 dollars, he would be in drawdown with 1200 dollars. This is therefore one of the main risks in automatic trading. Opening a position against the trend. We call these positions orphans. The primary objective is therefore to prevent the opening of orphans.

3. Events. These are planned events that occur regularly. The most important of these are the so-called 3-star news, which reflect the economic environment, for example unemployment figures or house sales in the USA, or interest rate increases or reductions for bonds, or a president of the FED, ECB, etc. announces something. All these events can cause major price fluctuations. In gold trading, it is easy to say that the correlation between gold and the USD is such that if the events weaken the USD, for example if there are more unemployed people in the USA, then the gold price will rise and vice versa. Unfortunately, this is not always true, because if the actual result is better than the analysts' forecast, then the opposite often happens. So, if there are more unemployed than in the previous month, the gold price should rise and the USD should fall. However, if there are fewer unemployed than the analysts had forecast, then the gold price falls, even though the US economy has deteriorated, but not as badly as originally assumed. That should mean: Events are not for beginners. If at all possible, it is better to stay out of it and stay out of the market, because the whole thing is quite a game of vabanque.
If the 3-star news comes out when the Asian market is already closed, which is always the case when the news is announced in the US evening, then there is usually a so-called replay effect at midnight when the markets in Asia open again and the price jumps of the previous day are repeated at the Asian market opening. So be careful. Do not start trading directly at midnight. PS: all described from the EU time zone.

4. It's not a box, it's not a trend and it's not an event. There are simply days or periods when the price has absolutely no idea where it wants to go. For example, you see price jumps of several dollars within minutes, but they are not a breakout because they revert and jump back the next moment. However, so far or so high that it is not a box. The best thing to do here is to stay out.

Let's summarize. There are boxes, trends, events and indefinable states.

We actually only want to trade in a 2 dollar box. In principle, we want to avoid all the rest because the other situations simply involve different risks.

It's always good to work out what you want and what you want to avoid. That creates clarity and that was reason, why we built a box into the Expet-Advisor.

This explains pretty much, what had to happen. We needed an Expert Advisor that was not opening trades based on the typical chart timeframes M1, M5, M15, M30, H1, H4 and so on.

It is obvious that if an EA opens trades fixed to a certain time corset it will produce orphans sooner or later. The smaller the timeframes the more orphans are created. These orphans have to be maintained via other trading strategies like hedging, stop loss, Martingale or different. This creates stress, losses, high blood pressure, bad mood and so on.

Nobody needs a trade opening on the full hour when set to H1 if the market is not ready for it, no matter which indicator might be behind it (Bollinger, Moving Average, Supertrend, CCI, Stop and Reverse or whatever else)

We need to find the ideal point in time to open the trade, when the market is ready for it. That's what PowerScalpers box does. It uses a trading speed like M5 but it brings it together with further quality conditions, so that the trade is being opened when the right conditions come together and not when the clock shows that it is 09:05 example given. Orphan avoidance together with further intelligent settings of Trailing Stop, Martingale, DNPT or others can lead to very smart trading strategies.

Now we need to configure the PowerScalper in conjunction with the Monitoring + Control Bot so that the above strategy can be tested in a demo account.

We will do this in another blog article.


This is not an instruction manual, but merely an explanation of how the software works. As the manufacturer of the software, we want you as a user to better understand how the software works.

We are not saying that you should use this functionality with real money. Think very carefully about whether you want to use the functionalities mentioned in the text at your own risk and what risk you are taking.

If you decide to use these functions with real money, you should have tried out how the whole functionality works and what can happen with a demo account for a sufficiently long time beforehand. This is the only way to learn to independently assess the real risks and potential profits.

This is absolutely necessary in order to deal with the risk with foresight. As the manufacturer, we accept no liability if money is lost at the broker due to the functions mentioned in the text. The above-mentioned functions of our software offer you excellent opportunities to make profits, but with the acceptance of the risks that the markets always present.

Every PowerScalper license offers one demo and one real trading license to you. This is our contribution to you, so that you can learn to trade riskless as long as you want, before you are using real money.