Fellow traders, today I have the pleasure to share with you an interview I did with Hal Chapman expert advisor creator and owner of halcyonfx.com . On his website, Hal sells several expert advisors which have been subject to much testing, critics and reviews. In my own website, you can find reviews on Doubleplay and you can certainly feel my doubts about the systems as well as some of their good points. However, having done business with Hal for a while and knowing how he genuinely cares for the retail trader, I decided to do an interview in which our doubts as retail traders would be cleared and we would have a more informed view about his experts. As always, I didn't get paid for the interview, neither did I get free expert advisors, commissions or the like. This interview is an unbiased as it can be. I hope it is as informative for you as it was for me ! Enjoy it.
My first question is relatively simple. I would like you to tell us what expert advisors you are offering and what are their general characteristics.
Sure, Halcyon Forex offers 2 main type of what I call “raw” Expert Advisors. Everyday trading EA's and News trading EAs.
In addition to that, we offer what I refer to as a “Complete Solution” which includes the EA of your choice, a VPS, complete setup and Premium technical support.
The difference is that “raw” EAs are just the EA itself with the user manual. Raw EAs are intended for people who are well versed in the use of MetaTrader 4, who know how to set up a VPS and so on. The Complete Solution is designed for folks who are new to this, they are not very familiar with MT4 and wish to participate and let someone else do all the setup and configuration.
Now, within the actual Expert Advisors that we offer there are the following:
Everyday 24x5 EAs:
Trend-Tracer 1.4 build 15
DoublePlay 4.5 build 203
PipCollector 2.0
News EAs:
Condor 2.0
SimpleNEWS 2.0
2. If you were a Forex retail trader looking for expert advisors, what solid reasons would you have to purchase each one of your expert advisors ?
I would be most inclined to purchase Trend-Tracer 1.4 because:
#1 It has a high winning percentage
#2 If it takes a loss or losses, it works to get that back and get back on track
#3 While the money management becomes aggressive to recuperate lost equity, it does not do so blindly. It has a safety system built in to reset the increments in the event the account is not back on track within the allowed runway. I do not like the idea of digging deeper and deeper into a rabbit’s hole. That is why this safety is built into both Trend-Tracer and DoublePlay.
#4 So in summary, it wins much more often than it losses, it fights to get back any loss and it does all this within the safety of a framework which puts the odds in my favor as the investor.
3. In the last versions of Doubleplay and your new expert advisor you implemented a new money management system that increments lot sizes after loses. Could you please explain the reasons why you decided to change your previous money management system ?
I would be happy to.
Initially I wrote DoublePlay (version one) back in November of 2006 and throughout all of 2007 I noticed it was a good system but not perfect because it would suffer draw downs. Even though it was winning a higher number of trades than it was losing; The amount when a loss happened was many times more than the amount resulting from the winners.
I realized that I needed some way to ensure that the amount produced by the winners end up larger than the amount resulting from lost trades.
Meanwhile, I was exchanging ideas with numerous other investors, customers, money managers and Forex traders. This is how I became familiar with the Essex Money Management principle as well as the Binary Math money management principle. These higher level money management disciplines, specially Essex money management, seemed to address the limitations of the current DoublePlay and merited a further look.
I researched these doctrines and once I understood the mechanics behind them I began to attempt to automate them. What I ended up with was neither Binary math nor pure Essex money management but inspired by both and quite effective. This work was completed last summer. However, I was even then extremely reluctant to introduce it into the production DoublePlay which my customers were using at the time. I am extremely conservative when it comes to changing production software as I realize this is what folks are using to make money. A change in that is something I have to sleep on quite a bit. Even if it looks like a good change because I have learned that in Forex, many things that SEEM to make all the sense in the world somehow just do not result in real life the way they should. Also, I realized that the aggressiveness of the money management would be disfavored by many investors. And so I held back at the time.....
After more successful testing and code adjustments as well as further conversation with one of my more trusted and experienced money manager colleagues, I was finally convinced that this was the right path and I released DoublePlay with the new money management.
Why did you choose this particular incremental type system ?
I chose this system for several reasons. Number one is because it works. But more importantly, I want to make sure that the account maintains a good equity curve. If you take a loss on a regular EA and then the next trade is smaller than the one you just lost, even if you win that trade, you will still be left behind. You would have to win a lot of trades to get back on track. With the Halcyon Forex Money Management when you increase the stake and win the account gets back on track or higher than it was before with just one or two trades. Then it becomes a matter of what are the chances of winning that next trade? With Trend-Tracer, you are looking at a 74% chance or better that the EA will in fact win.
Many people are afraid of this system as incremental lot sizes after loses are associated with Martingale systems which are considered to be proved losers, blanking people's accounts in the long run. What is the difference between your system and a Martingales system and why do you consider your system better ?
Great question!
The martingale doubles your stake endlessly. You can either win a few pips or tank the entire account.
The Halcyon Forex Money Management works with several parameters: Lots, step, top and bottom. The Lots represent the starting lot value. If a loss is encountered then the lots size is incremented by the value of the ‘step’ parameter until one of 2 things happens, the account is back on track or the value of the ‘top’ variable is reached. If the lot size reaches the value of the ‘top’ parameter, then the EA automatically reduces the lot value of the subsequent trade to the value of the ‘bottom’ value and if the account is still not on track the progression begins again. Once the account recuperates any losses, the EA automatically returns to the standard lot size. This creates a type of loop that gives the EA a great deal of ‘wiggle room’ to get back on track and not go too far into a draw down.
In the past 3 plus months, anytime there has been a lost trade, DoublePlay has not reached half of its allowed runway before the account was back on track.
I want to take the opportunity to mention that this type of money management would not work unless the underlying trading system has a high probability of winning. That is why this type of money management works well with both DoublePlay and Trend-Tracer.
If you had to give a rough estimate, what would you consider to be the probability (from 0 to 100) of wiping an account using your expert advisors ?
Assuming that 100 is certain to be wiped out then I would say that my EAs have a 5 or less rating on that scale as long as instructions are followed and with the recommended parameters. (lower chance with Trend-Tracer, I would say 3)
If your system wins consistently then the above money management strategy would prove successful, however,based on the logic of your expert advisor, do you consider them to be robust enough to withstand abrupt changes in market condition, if so, why ?
Yes I do and I would have to admit that applies more to Trend-Tracer than it does to DoublePlay but both quality for a yes. DoublePlay has a healthy track record that indicates its winning percentage rate throughout the entire year of 2007 and into 2008. which affords exposure to ample market fluctuations. As far as Trend-Tracer is concerned, the EA is not based on indicators and is much more accurate altogether.
Many people consider exponential growth an important characteristic of expert advisors. As your experts currently grow equity linearly, are there any plans to implement some sort of alternate money management to increase equity growth ?
Yes, absolutely. I am working on developing a more sophisticated algorithm to do this. Several prototypes are already testing in the lab.
Finally, if you were to buy your own expert advisors, which experts would your buy, what currencies would you trade, with how much equity would you start and how much money would you be expecting to make each month ?
I would buy Trend-Tracer, put it on a mini account with no more than 100:1 leverage and at least $1,500 starting balance. As far as returns per month, it is too early to tell. The back testing of course looked amazing but I do not believe in back testing to foretell the future. Save to say that it is right on track winning and as time passes the actual per-moth expectation will become more clear.
Thank you for your very good questions and please let me know if there is anything else that I could be of assistance with.
Best regards,
Hal Chapman
Halcyon Forex
My first question is relatively simple. I would like you to tell us what expert advisors you are offering and what are their general characteristics.
Sure, Halcyon Forex offers 2 main type of what I call “raw” Expert Advisors. Everyday trading EA's and News trading EAs.
In addition to that, we offer what I refer to as a “Complete Solution” which includes the EA of your choice, a VPS, complete setup and Premium technical support.
The difference is that “raw” EAs are just the EA itself with the user manual. Raw EAs are intended for people who are well versed in the use of MetaTrader 4, who know how to set up a VPS and so on. The Complete Solution is designed for folks who are new to this, they are not very familiar with MT4 and wish to participate and let someone else do all the setup and configuration.
Now, within the actual Expert Advisors that we offer there are the following:
Everyday 24x5 EAs:
Trend-Tracer 1.4 build 15
DoublePlay 4.5 build 203
PipCollector 2.0
News EAs:
Condor 2.0
SimpleNEWS 2.0
2. If you were a Forex retail trader looking for expert advisors, what solid reasons would you have to purchase each one of your expert advisors ?
I would be most inclined to purchase Trend-Tracer 1.4 because:
#1 It has a high winning percentage
#2 If it takes a loss or losses, it works to get that back and get back on track
#3 While the money management becomes aggressive to recuperate lost equity, it does not do so blindly. It has a safety system built in to reset the increments in the event the account is not back on track within the allowed runway. I do not like the idea of digging deeper and deeper into a rabbit’s hole. That is why this safety is built into both Trend-Tracer and DoublePlay.
#4 So in summary, it wins much more often than it losses, it fights to get back any loss and it does all this within the safety of a framework which puts the odds in my favor as the investor.
3. In the last versions of Doubleplay and your new expert advisor you implemented a new money management system that increments lot sizes after loses. Could you please explain the reasons why you decided to change your previous money management system ?
I would be happy to.
Initially I wrote DoublePlay (version one) back in November of 2006 and throughout all of 2007 I noticed it was a good system but not perfect because it would suffer draw downs. Even though it was winning a higher number of trades than it was losing; The amount when a loss happened was many times more than the amount resulting from the winners.
I realized that I needed some way to ensure that the amount produced by the winners end up larger than the amount resulting from lost trades.
Meanwhile, I was exchanging ideas with numerous other investors, customers, money managers and Forex traders. This is how I became familiar with the Essex Money Management principle as well as the Binary Math money management principle. These higher level money management disciplines, specially Essex money management, seemed to address the limitations of the current DoublePlay and merited a further look.
I researched these doctrines and once I understood the mechanics behind them I began to attempt to automate them. What I ended up with was neither Binary math nor pure Essex money management but inspired by both and quite effective. This work was completed last summer. However, I was even then extremely reluctant to introduce it into the production DoublePlay which my customers were using at the time. I am extremely conservative when it comes to changing production software as I realize this is what folks are using to make money. A change in that is something I have to sleep on quite a bit. Even if it looks like a good change because I have learned that in Forex, many things that SEEM to make all the sense in the world somehow just do not result in real life the way they should. Also, I realized that the aggressiveness of the money management would be disfavored by many investors. And so I held back at the time.....
After more successful testing and code adjustments as well as further conversation with one of my more trusted and experienced money manager colleagues, I was finally convinced that this was the right path and I released DoublePlay with the new money management.
Why did you choose this particular incremental type system ?
I chose this system for several reasons. Number one is because it works. But more importantly, I want to make sure that the account maintains a good equity curve. If you take a loss on a regular EA and then the next trade is smaller than the one you just lost, even if you win that trade, you will still be left behind. You would have to win a lot of trades to get back on track. With the Halcyon Forex Money Management when you increase the stake and win the account gets back on track or higher than it was before with just one or two trades. Then it becomes a matter of what are the chances of winning that next trade? With Trend-Tracer, you are looking at a 74% chance or better that the EA will in fact win.
Many people are afraid of this system as incremental lot sizes after loses are associated with Martingale systems which are considered to be proved losers, blanking people's accounts in the long run. What is the difference between your system and a Martingales system and why do you consider your system better ?
Great question!
The martingale doubles your stake endlessly. You can either win a few pips or tank the entire account.
The Halcyon Forex Money Management works with several parameters: Lots, step, top and bottom. The Lots represent the starting lot value. If a loss is encountered then the lots size is incremented by the value of the ‘step’ parameter until one of 2 things happens, the account is back on track or the value of the ‘top’ variable is reached. If the lot size reaches the value of the ‘top’ parameter, then the EA automatically reduces the lot value of the subsequent trade to the value of the ‘bottom’ value and if the account is still not on track the progression begins again. Once the account recuperates any losses, the EA automatically returns to the standard lot size. This creates a type of loop that gives the EA a great deal of ‘wiggle room’ to get back on track and not go too far into a draw down.
In the past 3 plus months, anytime there has been a lost trade, DoublePlay has not reached half of its allowed runway before the account was back on track.
I want to take the opportunity to mention that this type of money management would not work unless the underlying trading system has a high probability of winning. That is why this type of money management works well with both DoublePlay and Trend-Tracer.
If you had to give a rough estimate, what would you consider to be the probability (from 0 to 100) of wiping an account using your expert advisors ?
Assuming that 100 is certain to be wiped out then I would say that my EAs have a 5 or less rating on that scale as long as instructions are followed and with the recommended parameters. (lower chance with Trend-Tracer, I would say 3)
If your system wins consistently then the above money management strategy would prove successful, however,based on the logic of your expert advisor, do you consider them to be robust enough to withstand abrupt changes in market condition, if so, why ?
Yes I do and I would have to admit that applies more to Trend-Tracer than it does to DoublePlay but both quality for a yes. DoublePlay has a healthy track record that indicates its winning percentage rate throughout the entire year of 2007 and into 2008. which affords exposure to ample market fluctuations. As far as Trend-Tracer is concerned, the EA is not based on indicators and is much more accurate altogether.
Many people consider exponential growth an important characteristic of expert advisors. As your experts currently grow equity linearly, are there any plans to implement some sort of alternate money management to increase equity growth ?
Yes, absolutely. I am working on developing a more sophisticated algorithm to do this. Several prototypes are already testing in the lab.
Finally, if you were to buy your own expert advisors, which experts would your buy, what currencies would you trade, with how much equity would you start and how much money would you be expecting to make each month ?
I would buy Trend-Tracer, put it on a mini account with no more than 100:1 leverage and at least $1,500 starting balance. As far as returns per month, it is too early to tell. The back testing of course looked amazing but I do not believe in back testing to foretell the future. Save to say that it is right on track winning and as time passes the actual per-moth expectation will become more clear.
Thank you for your very good questions and please let me know if there is anything else that I could be of assistance with.
Best regards,
Hal Chapman
Halcyon Forex
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