Friday, March 27, 2009

Tick Volume Charts, The Story They Never Told You !

Most of the people using the metatrader and other trading platforms use what we call "time based charts". On this type of charts, price is graphed as a function of time with a certain amount of time filling each price candle. So for example, on a 5 min time based chart, each candle represents the price movement during a five minute period. What is exactly wrong with this type of trading ? The problem is that this time based charts often go flat when there is a very small amount of trading during a certain period of time. For example, if only 5 trades happened during the past 2 hours, then all those candles would look very flat. This is translated in having a lot of whipsaws on systematic trading. 

For example, when you are trading an EMA cross on time based charts, the EMA simply goes flat with price and you get a lot of false croses, etc. The way to avoid this on time based charts is to introduce another ton of indicators which can filter out the bad signals generated by the indicator laying flat on quiet trading periods.

The solution to this problem, which is something that is used by most succesful manual traders out there is volume based charts. On this type of charts, each candle does not represent a fixed amount of time but a fixed amount of volume, represented in ticks. That way you would have a lot of candles when there is high volatility and fewer candles when the market goes flat. However, even when the market goes flat on time based charts, it does not go flat on volume based charts because the lack of trading just makes the chart become halt, no orders executed, fewer candles drawn.

This type of chart makes almost every simple trading system work. For example, trading a stochastics cross on time based charts is not profitable because of all the whispsaws you get when trading on flat periods. When you change to volume based charts, the profitability of this simple systems just sky rockets. You can trade things as simple as moving average and PSAR color changes profitably on volume charts while it is almost impossible to do so on time based charts.

If you would like to learn more about profitable mechanical trading systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Thursday, March 26, 2009

Forex Rising Unbiased Review, Forex Expert Advisor

Recently someone called the Forex Rising expert advisor into my attention. This expert advisor found at seems to be a simple EUR/GBP scalper. The website creator however has offered both backtesting and forward testing resultst showing the expert advisor's perfomance over several past years.

I always grow suspicious about expert advisor creators that do not show backtesting data back until at least 1999 which is the last year from which we can get metaquotes data. However I know that for crosses realiable data cannot be found until 2005, so that may be the reason why backtesting results seem limited (although it does not seem convincing at all). 

When you look at the expert's results it again seems like a pretty regular scalper, with a takeprofit of about 2 times the spread and a win to lose ratio of 4 to 1. This is in fact no so bad for this type of experts for which you often find risk to reward ratios of 10:1 or even 100:1. The expert only trades during the Asian session something that seems wise to do in order to avoid highly volatile periods which may increase the spread significantly.

As a matter of fact, the profits made by this expert advisor could be significantly hindered by spread changes on the EUR/GBP because it's risk to reward ratio makes it highly suceptible to cuts over it's profits.  My opinion with this as with almost all other EUR/GBP scalpers is that if they are profitable, they will only be for a short time, after they start to be massively traded during the Asian session, spreads will start to widen and they will start to lose profitability.

For all the reasons mentioned above, in my opinion, this expert advisor is not worth buying since it does not fulfill my criteria for a long term stable forex expert advisor which can brind profits for the following years to come. 

If you would like to learn more about profitable free and commercial expert advisors I have tested and reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Wednesday, March 25, 2009 DTS-1 Expert Advisor Unbiased Review

I have been following developments for the past two years and I have more often been impressed than not by their expert advisors. Their system Pointbreak has been traded and reviewed by me before (see links on the left and ebook) and their new DTS-1 trading system could be no exception.

According to their website, the DTS-1 or Dreambuilder FX expert advisor seems to be like a version of Pointbreak on steroids. Pointbreak is a sort of grid trading expert advisor that uses, hedging, pyramidying and other useful tecniques to stay on top of the game and always return the account to a profitable return. If you have read my ebook you know the draw downs and possible profits you could be facing with Pointbreak but it seems that the DTS-1 expert advisor has been an improvement over that.

The dreambuilder-FX expert advisor claims to have some new feautres over Pointbreak's logic which eventually translate into accounts with lower draw downs and more profitable returns. When you see the back and forward testing results on website, the results seem a lot like those you would expect from Pointbreak. You get several open draw downs at some points with the account eventually getting eveything back up to profits. The amount of those open draw downs is the subject of interest here. 

I am now familiarized with this type of cycle trading systems and I would consider the DTS-1 expert advisor worth testing, as it seems to have reasonable risk to reward ratios with also reasonable open draw downs. Newsletter subsribers will receive investor access account number and password as well as access to the forward trading results (updated every 4 hours) on my ftp server.

If you would like to learn more about Pointbreak and this type of systems in general as well as other free and commercial profitable trading systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Tuesday, March 24, 2009

Why You Should Move Away From Metatrader 4

For the last two years, most of my efforts have been alocated at the finding of new and profitable automated trading systems for the metatrader 4 platform. After trading mt4 and several metatrader brokers for the past two years I have to say that serious traders should be moving on from the metatrader platform and it's brokers.

Don't get me wrong, the metatrader platform, along with all of it's programming glitches and limitations, is one of the most versatile trading platforms I have used during the past few years. My problem is not so much with the platform itself but with what using the platform implies. 

As you may know, metatrader brokers have to have a dealing desk because this is a requirement of the metatrader platform. Moreover, having a dealing desk implies that there can be significant broker manipulation of your price feed and that there can be very bad things happening with your order executions. There are a lot of horror stories out there about metatrader brokers failing to execute market orders, filling orders at ghost ticks, etc.

In my experience, dealing with a metatrader broker is most of the time dealing with a bucket shop and what a bucket shop would definitely hate, is you making money. So long story short, making money on metatrader brokers is pretty hard with anything but long term strategies because on the short timeframes they have an arsenal (bordering legality)  which they can use in  order to make your trades go wrong, even if your system is indeed a profitable one. 

The alternative we have is to simply move away from metatrader when handling large amounts of money. We can of course go to ECN brokers that use Trade Station and code our automated trading systems using the Easy Language, something which would be far better than using the metatrader broker's likely manipulated data feeds. However, fxdd has recently launched a metatrader xtreme platform which seems to be an ECN adaptation of the mt4 platform. I may try it during the following months and see how it works ! Despite all of this, the regular metatrader platform is still a very easy and convenient way to use and test automated trading strategies using small accounts.

If you would like to learn more about free and commercial automated trading systems to run on your mt4 platform please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Monday, March 23, 2009

If We All Used The Same Forex EA ...

I know that many of you may have asked this question one or several times. What would happen if there was a mainstream succesful forex expert advisor and we would all buy it to make ourselves profitable in the market ? Let us say that the ea was backtested since 1999 and forward live tested from a period of 5 years, we all want to buy it because it seems so profitable, then what happens ?

I have given this question a lot of thought because it is the basis of what would happen when large mases tried to use the same piece of automated software. Since the software has a fixed logic, the first thing we would find is that too many people would want to enter the market at a certain price level. This has some real effects if the orders are truly executed on the market and not run on bucket shops and even if they are run on bucket shops the provider is sure to do something if he wishes to stay out of bankrupty. So what are these effects?

The first thing that would happen is that the market would lack enough volume to fill all the people at the same time, if 30,000 people want to trade one lot of currency at exactly the same price at exactly the same time then the market wouldn't have the liquidity to deal with those orders. If there is no liquidity to deal with the orders then the price obviously goes up or down after the market gets saturated filling the orders. Then of course, holding the asset has become valuable and the people who would  sell it are going to hold onto it while the people who buy it are going to pay higher and higher prices. This has the obvious effect of widening the currency spreads because there is way too much volatility on the market. 

The second effect comes from people overloading the market liquidity at that price, this of course would cause massive slippage on most of the people trading the system. Indeed, manual traders would start to trade the moves caused by the automated trading community because what happens can be somehow predicted because the system is absolutely systematic. Now, the golden question is, would all of them be profitable ?

The answer is the obvious, no. Massive usage of an automated trading system would render it useless because of all the facts explained above. If everybody starts to try to enter the market at the same place, they have changed the inherent dynamics of the market for which the ea was built, hence, the ea does not work anymore, because the market at that point is no longer based on human psychology but in computer logic. 

In fact, trading an ea is like droping a rock in a water pond. The effects of your ea are the ripples on the pond while the pond is the market. If the ea is like a small pebble, the market will not even notice it and continue behaving as it has always done. If the effects of the ea are like those of a boulder, then the market dynamics would definetely change. Anyway, the 9:1 rule will in the end prevail. In the end, 90% of forex retail traders will lose their money, there is no way to change that. 

If you would like to learn more about commercial and free (non mainsteam) automated systems I have used and reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Monday, March 16, 2009

Forex Automated Trading : Using Common Sense

My grandmother used to say that common sense was the least common of all senses. After trading the forex market for a few years and carefully watching how commercial expert advisor sellers market their products and how people buy them, I have to say that she was totally right. I even did an experiment with a sociology freshman this week to see if I could get him to buy several of the expert advisor products people sell online. I actually convinced him to buy all the five different products I offered him ! (imagine if I had affiliate links !) Then I made him reflect upon his offers and the products and he realized he had made 5 mistakes.

There are some simple common sense rules that have to be followed when looking for automated trading systems. These rules will simply protect you from being ripped off if you lack a real understanding of the forex market and why an automated trading system in particular will not work. In analogy, you don't need to know why fire burns in order to keep yourself away from a fire, it is just "common sense".

The first rule is my personal favourite and the first one that gets killed when people become blinded by greed. If it is too good to be true, it probably is. You knew that already ? So apply it ! The main problem with this rule is that the limits of "too good" get stretched when people believe that they are ignorant of what "too good' actually is.

Commercial ea sellers usually focus their marketing in such a way that people feel like their missing out on something that they did not know which is not offering "unreal results". For example, if I told my mother she could make 40% a year in the forex market with no risk she would feel that it is too good to be true because most risk free investments are below 7% a year. I could push her into it by telling her that it is a matter of she "not knowing" it can be done. Do not fall into this ! When I change into a more realistic setting and tell my mother that she can make 40% a year with a 20% possible draw down and 0.01% chance of total equity loss, then we are singing to a different tune. Risk now seems realistic for an investment with that profit setup.

The next thing is that the burden of proof is on the ea creator. You should not believe a word the testimonials or the ea sellers says, believe the hard evidence, live accounts with investor access, nothing more, nothing less. If the ea seller claims he can make 10% average a month, then demand to know how many months he took that average from and where you can find proof of that. No proof beyong reasonable doubt, no purchase, that simple.

Finally think about the ea seller claims and think if it is possible for all the people that bought his system to achieve those results. Can we all make 1000% a year on the forex market ? No ! where will the money come from ? Apply your common sense ! 90% of the people in the forex market have to lose money, it is an essential characteristic of the market. Can a 100 USD product turn 500 USD into a million in five years ? Obviously not ! Then why do people buy them ? They are not using their common sense. If you do not want to second guess your choices and battle your greed then start by increasing your education level, fear and greed are removed by having understanding.

If you would like to learn more about choosing commercial and free expert advisors as well as read reviews of commercial and free expert advisors I have bought and traded please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Sunday, March 15, 2009

Why Trading With Expert Advisors Requires More Education Than Trading Manually

Reflecting upon all the different aspects of both manual and automated trading systems I realized that educational factors are some of the most important topics of both forms of trading. In fact, most traders lose money in the market when weak psychological factors couple with a lack of education and knowledge about both the systems and the inherent nature of financial markets.

First of all, there is a tendency to think that the forex market can be traded with an automated system without any knowledge of the market or trading. This is totally wrong, and specially for automated trading systems because not only do you need to know how to trade and how the market works but you also need to know how automated systems behave. Now I know you may be asking yourselves "why do I need to know all that information if the system trades by itself ?", well, it is obviously not that simple.

While most people believe that trading an automated trading system requires no knowledge of the market whatsoever I am going to say the complete opposite, it requires even more knowledge than to trade manually. Why ? Because of several psychological and rational factors. First, you need to choose an automated trading system. What is your criteria ? If you have absolutely no knowledge of the forex market your criterias will be wrong. Let me say that again, they will be wrong.

Why do you think commercial sellers tarket their systems the way they do ? They show high risk to reward ratios with high winning percentages, to the inexperienced person with no knowledge about forex trading it looks like a great deal. Why do 30,000 people purchased FAP turbo although it has, in my opinion, the characteristics of an unprofitable system ? that is because most people that bought it have a very shallow understanding of the market and automated trading systems, coupled with a deep desire to earn high profits in a short time.

Now, let's suppose you manage to get a grip on one of the few profitable systems out there. If you have no knowledge about the forex market or how automated trading systems work but you have seen the testimonials that most commercial ea sellers bring up then most probably you will think that your system just does not produce enough capital. Well, for me more than 40% a year is outstandng, most new traders looking for automated trading systems are expecting that every month ! Unrealistic. Sadly this feeding of greed is carried on with enthusiasm by most ea sellers out there shoving unprofitable systems down people's wallets.

Then you have other factors, maybe your profitable system will only win 1 out of every 10 trades and that will be enough to make it very profitable but you are ignorant of this because you lack an understanding of how the system trades so you psychologically feel like a loser after 5 consecutive loses and decide to stop trading the system.

As you can see, almost all of the problems associated with people buying and losing money with unprofitable trading systems is based on people being ignorant and this is a direct consequence of people wating money without effort. Well, as someone said once, if you think education is expensive, you don't know the cost of ignorance. If you would like to learn more about choosing expert advisors as well as commercial and free expert advisors I have reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Friday, March 13, 2009

The Risk to Reward Ratio, Randomness vs Logical Thinking

In the world of forex automated trading, we usually find several types of expert advisors. The most common, at least amongst the commercial automated trading community, seems to be expert advisors which have very high risk to reward ratios . This type of experts risk a much higher amount of money on each trade than the amount of money they make on any given profitable market move. Usually the risk to reward ratio of most commercial systems that use this approach stands at 10:1 or 5:1 but on some ocassions it can be as high as 100:1 or 500:1. Now I will try to give my opinion on this type of trading and why it is the most commonly followed approach of most forex commercial automated trading sellers.

First of all, it is simply a matter of probability. The higher your risk to reward ratio is, the higher the probability that the mean reversion theory will work in your favor. This theory states that the market tends to go several times through the same price levels so if a price level has been hit, it will most likely be hit again sometime in the future. One way or another, this usually transaltes in systems with higher risk to reward ratios having much better winning percentage. This, I have seen, is completely independent of the trading system you use, hence, this type of systems are working using market randomness, which is specially important when you try to capture small amounts of profit.

Nonetheless, these systems are generally not profitable because all of their gains and equity get wiped out when the market faces a worst case scenario. The systems may remain profitable for a certain amount of time but will then quickly return all profits and turn towards draw down once the market starts to go strongly against one or several of their open positions.

Then we have systems which work the opposite way, systems which have very low risk to reward ratios and try to compensate many losers with a winner. Of course, this strategy is much less marketable and it also is far more difficult to program since you need to capture a very large amount of pips on a single move. These expert advisors usually have long periods of loses, then recover everything and win with a single or a couple of trades. This systems tackle fundamental aspects of the market, therefore they have long term profitability.

You can now see that programming the first type of expert advisors is easier and also much easier to sell and market because people are winning almost all the time (although they eventually will lose money due to the inherent characteristics of these systems), while the second category is much more challenging to program because it requires a good understanding of how the market works and not just merely basing the trades on price randomness.

If you would like to learn more about commercial and free expert advisors of each of the above categories please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Sunday, March 8, 2009

M7 Sidewinder Pro by an Interview with Hal Chapman

I was very surprised earlier this month when Hal Chapman, creator of, decided to launch his new automated system called M7 Sidewinder Pro . Since I have bought almost all of Hal's products, I decided to offer him an interview about his new expert advisor which shows some features and claims I am very intrigued about. I have always believed Hal to be, besides an excellent coder, a true dedicated expert advisor creator who puts his customers profitability first (not to mention that he is one of the few willing to answer my blunt questions openly). Now, with great pleasure I will now show you our email interview which will most likely inform you very well about his new expert advisor system, M7 Sidewinder Pro.

1. So Hal, I understand you have a new expert advisor system called M7 Sidewinder Pro. Could you please describe your new system for us ?

Yes, of course. The M7 Sidewinder PRO is an advanced automated Forex trading environment. which consists of four separate EAs (referred to as EA modules) which can be used individually or in any combination including all 4 at the same time. Although it is highly suggested new users begin trading a single module first before attempting more delicate multi-module configurations.

Each module has independent money management logic providing complete money management to each module and full money management isolation from the other 3 modules. This enables the Sidewinder to trade up to 4 currency pairs at the same time without polluting the money management sequence of any of the individual modules.

Sidewinder is an adaptive system in the sense that it can tell what situation it is in and can choose how it will respond based on that information. The system has the capability of trading under one of two modes depending on its current trading situation which it keeps track of. Overall I believe Sidewinder is a leap forward towards stable returns over time with controlled risk and state of the art technology.

2. What makes this system different from TrendTracer and Doubleplay ?

This system draws on the lessons learned over the past couple of years with DoublePlay and Trend-Tracer. What makes this system different? The short answer is that it is more profitable because it is the first one to intelligently deploy a compound 2-stage money management system and has a much improved market entrance logic.

Also remember that DoublePlay was written in November of 2006, Trend-Tracer was developed early 2008 and now Sidewinder was just released to the public on February of 2009. Significant time has passed between each release and all of that time translates into more experience trading and programming all of which is manifested in this latest system.

Another difference that many will appreciate is that Sidewinder can be made to work properly in much smaller accounts than both DoublePlay or Trend-Tracer can.

3. One of the few comments some people have, me included, about Doubleplay and Trendtracer is that even though they indeed made profit in the end, these two experts took accounts through important draw down levels, sometimes even 50% or more of the account's balance. What does M7 Sidewinder Pro do to prevent this ?

At this juncture I would like to point out that the multiple-module configurations are subject to higher possible draw down than single module configurations due to the fact that you are trading one currency and not 4. That is why each individual user may benefit from a different Sidewinder configuration depending on the size of their available trading equity, risk appetite and ability to handle potential draw down.

Having said that, I will tell you that Sidewinder certainly does more to fight serious draw-down than any previous system that I have written. That is precisely the reason why this system is here today and that issue in particular is that the 2 stage defense against draw down addresses. Unlike any of our previous systems, Sidewinder is the only one which adapts as the in-profit/in-draw-down situation changes to fight draw-down and it is very effective at it.

I am not trying to say that there will not be drawdown with Sidewinder. Of course there will be. But what I am saying is that this system has tools to fight against draw-down that none of my other systems ever had. Some things are best seen in action rather than explained and while I am trying to do my best at explaining this I fear this may be one of those things. When you see how it trades and you understand the system you will see that it is designed to deal with draw down situations much better and it has the tools needed to get the account back on track and far into profits. What tools are these? The 2 stage money management, the way that wins/losses have been thought through and soon (currently testing) a two-stage trailing stop to be deployed during the level 2 alert stage of the money management system.

Have I done away with draw-down altogether? No. Of course not. But I have dealt a major blow against it with this system and that means money in Sidewinder user’s pockets.

4. What is the main difference between the two money managment systems integrated within M7 Sidewinder Pro ? Could you please explain the "second line of defense" in more detail ?

The main difference between the two money management systems is that the first is in the form of position sizing and the second is in the form of trade characteristics management. Let me explain.

Position sizing dictates the lot size of the next trade and is the core of the money management system that has been used with DoublePlay and Trend-Tracer as of late. This is also implemented in Sidewinder. However Sidewinder is the only EA in which this position sizing based system is combined with a second system based on the strategic management of trade characteristics.

Trade characteristics are basic things about any given trade. For example the stop loss and profit targets are trade characteristics. The “second line of defense” is essentially when the software detects that the account continues to be in a state of drawdown after a given number of trades and as a result of that changes the characteristics of the subsequent trades that it places by replacing the profit target with a trailing stop (soon, a 2-stage trailing stop). Of course this does not guarantee that the very next trade will return the account to profit but it does set up the subsequent trades for maximum profit potential. Add to that the effect of the improved market entry logic and it is not long before a trade is carried well into profit by the trailing stop and the account brought out of draw-down.

5. What happens when the "second line of defense" fails ? What would the draw down be in this situation ?

This would be the proverbial worst case scenario and would represent significant draw down. We cannot promise this will never happen. No one can really. You must understand that yes, it can happen with this or any other trading system. However, the system we provide arranges things such that it puts various layers of odds heavily in favor of the investor. That is all any good system can hope to do.

6. Some of the claims you make are pretty "hyped" for an ea with a forward testing period of less than two months. What makes you so confident about this expert advisor's profitability ?

I designed and wrote the system and I know how it works inside and out and that is why I am so excited and confident. Having said that, I think it would be best to let the EA actions speak for themselves. It is a solid system and I am extremely happy with it.

7. Please Hal tell us what you would consider the best quality and the worst defect of your M7 Sidewinder Pro ea?

Let me start with The worst defect. This is that Sidewinder can be confusing to set up optimally by different users. I mean, it’s 4 separate EAs that can be used all at once or one at a time or 3 at once... etc. There are more than one way to a correct setup depending on if you want more or less risk or faster/slower profit accumulation. So in summary, it can be confusing to harness by someone who does not have moderate understanding of MT4 and EA operations and does not understand this particular system.

The first step to combat this is advising new customers to begin testing with a single module which is evidently far less confusing to a Sidewinder newcomer than attempting to run the EA system at full throttle with all 4 modules.

The second but equally important step is to maintain a very good flow of communication with the Sidewinder customer base to make sure they are properly set up which I fee we are dong a good job with so far.

Now for the best quality - It is extremely effective and profitable. Specially when used as a single module. It is fast, does not make you wait much. It is smart, it adapts to it’s environment and gets the job done. I love waking up in the morning and looking at my live account. There is always a pleasant surprise waiting there. I have a “punching bag” version of this EA installed on my desk top and I run it improperly (on purpose) on a demo account to see the results. The EA still manages to keep that account profitable! (I shut it down every night and I reboot the MT4 several times during the day which shakes up the money management sequence.)

8. What is the expected influence of spreads and broker feeds on your expert advisor ? Do you expect results to change significantly between different brokers and spreads ?

I don’t expect the spreads to affect it as much and the EA can handle both the standard and the 5 digit pricing feeds which covers most MT4 brokers out there.

9. Hal, please tell us, to the best of your knowledge, what the minimum capital, recommended broker, expected draw downs and monthly profits are for this new expert advisor ?

This is a difficult question to answer as there are so many ways to configure Sidewinder on the same account and all have different outcomes. I will answer this in the perspective or a single module trading on a single pair.

Unlike my other EA, this one you can use on a mini account as small as $100. Don’t expect to get rich from the $100 overnight, but it does work and it maintains itself and moves the account forward with the appropriate settings. You can expect better than 10% per month return with this EA. You will likely see much better than that but drawing on my experience in this field that is all I will commit to. Starting with $100 of course does not make sense other than for a live test where you do not want to risk much or gain much. Best forward movement is seen with a standard account and $10K balance trading one module to full potential

9. Finally, we have seen time after time that expert advisor creators offer a "refund policy" that then gets "taken out" for some reason such as "abuse" by customers or other random reason. How do you plan to prevent this and are you planning to keep this "refund policy" indefinetely ?

As you may know, I have had a no refunds policy for years now and the only reason why I am making an exception this time for this product is because #1 I am 500% confident in my system’s performance and #2 Because I am so excited about this system that I want everyone to have it.

The money back guarantee is meant to send a message to the honest guy out there who is thinking of purchasing an automated Forex trading system; that their penny is safe here. That if they buy my product they can rest assured it will not turn out to be junk or they don’t have to pay for it.

However, to be completely fair, the refund policy is tied to performance. This is not an “I don’t think I like this system for no good reason, I want my money back.” type of guarantee. You must allow the system a chance to do what it does and you cannot get a refund if the system is performing well of if it is not properly set up. (We offer free email support to anyone who needs assistance setting it up properly.) You have to be able to demonstrate that you tried the system, configured it correctly and ran it properly for a fair amount of time (one month) and ended up with negative performance. If that is the case, fair is fair. You get a refund. But that is the only way to get a refund. Moreover, we are more than willing to provide technical support and setup/configuration assistance to anyone who needs it.

Now, will the policy remain? Well Daniel, I will be honest with you, I hope the refund policy stays too because as I mentioned it is a clear sign of my high degree of confidence in this system’s ability to please most intelligent Forex investors. But if you are asking me to limit my possible reactions in the face of uncertainty then I would reply by saying that making such commitment would be foolish on my part. I do hold out hope that the bad apples not ruin this for everyone.

Finally, before I go, I would like to thank you Daniel for giving me the opportunity to respond to the insightful points you bring up and thanks also to all of the Halcyon Forex customers out there who make it possible for me to keep constantly working towards finding a better and safer way to increase your Forex trading returns.

Thursday, March 5, 2009

High Profits Expert Advisors an Unbiased Review of these Forex Expert Advisors by (

In my quest to find more commercial and free expert advisors I have stumbled upon the website and it's range of automated trading systems and products. Given the fact that I had never seen their website or their expert advisors I decided to take a deeper look into them and analyze whether they are worth buying or not.

I have to say that I am extremely skeptical about any trading system whatsoever. Several years of experience have taught me that the world of forex expert advisor is filled with things that seem to work that really don't. When I arrived at the forex-expert-advisor website, my attitude was no different. The website has a sort of unclean look (in my opinion), something which is usually the mark of someone who does not have a very large budget for website development (or is very cheap).

When I started to see the expert advisors with the little "software box" drawings and the like I felt I was going to find some clearly unprofitable trading systems however I was surprise to find no cheesy marketing techniques, no testimonials, etc. The only thing that appeared to show where the expert advisor descriptions and the backtesting supporting information, no excessive publicity or hype it seems.

I then began to look into the backtesting results and the general trading mechanics of the expert advisors, to my surprise, the author was very cautious with the backtesting and the analysis of the software. All the experts seem to be backtested down to 1999 and some of them have several backtests showing the ea being profitable under several win to loss ratios, even when the take profit is larger than the stop loss. It is quiet hard to find profitable expert advisors with very low risk to reward ratios, when this happens it usually means that they tap into a fundamental quality of the market (e.j trend following).

However don't get too excited. The lack of general forward testing in the whole website seems a tad suspicious to me. Why would such a profitable, short term money making expert advisor author not show explicit forward or live testing of his experts ? Well, there can be several answers for this. Generally I would think that an ea with low risk to reward ratios and a TP and SL as high as 50 are not very prone to common errors in backtesting such as one minute interpolations, for me the suspicion arises because such a wide range of different setups are profitable. This could mean that the ea taps onto a backtester programming issue, such as using the close price of bars in order to trade (this often leads to those pretty equity curves, because of course you are trading knowing the future).

Well. in general, the expert advisors seem to deliver, at least in backtesting, and show linear, achievable equity curves (although with excesively low draw downs, something which also seems suspicious and may point to the explotation of a metatrader tester issue). Nonetheless, this could all be just me being excesively skeptical about these trading systems so I decided to contact the author and offer him an email interview so that he can better explain his systems and why there is such a lack of actual trading information. Once he gets back to me I'll write another post with his answers. Up until now, I would recommend you abstain from buying the expert advisors until we gather further information.

If you would like to learn more about other free and commercial expert advisors I have bought, tested and considered likely profitable please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Monday, March 2, 2009

Forex Tracer Unbiased Review, Forex Expert Advisor

A little bit more than 5 weeks ago I decided that I would start reviewing as many commercial expert advisors as I could in order to potentially save several people from wasting their money on most likely unprofitable or bad expert advisor systems. One of the systems that I have been asked to review is the trend tracer expert advisor.

Well, I have something very simple to say, in my opinion, this is as bad as it gets. The expert advisor is sold in the classical cheesy website used to trap novice forex retail traders and shows a bunch of "testimonials" and backtesting information so as to prove to the buyer that the system is profitable. The system claims to increase an account balance 10 times in the course of two years.

Looking a little bit closer at the forex tracer back testing information one can quickly realize several things. The first one is that the expert's testing is conveniently narrowed to a two year period which is tarted oddly in June 2006, why didn't they start the backtesting in January ? Or do the test since 2000 or 2004 ? The answer to this questions is most likely what it always is. The expert advisor fails to show a pretty equity curve during those periods and including them would most likely be detrimental to the expert's sales.

The Forex Tracer expert advisor is also evidently a scalper with it's outrageous risk to reward ratio of 10:1. This is the absolute mark of a system that will eventually wipe an entire account out. The expert advisor needs to win 10 times in order to recover from a single loss. Of course, this does not deem the system as unprofitable but in my opinion, this trading tactic is used to cover for a system that has very bad entries. When you enter the market and want a very small amount of profit you can greatly benefit from random market movements, hence, expert advisors that have very poor logic often have very high risk to reward ratios.

Their "forward testing" is also a joke with just a few positions showing on a metatrader history screenshot. What expert advisor in the world does not have a winning streak eventually ? This is absolutely no evidence of profitability, what a person needs is extensive back and live testing with access to a live account with investor password.

I would consider this expert advisor not worth buying as the author does not provide enough evidence to even consider the expert advisor profitable. If you would like to learn more about which commercial and free expert advisors I have tried and reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Sunday, March 1, 2009

RenegadeFx, Chameleon Forex Expert Advisor Review

I have been asked by some of my newsletters subscribers to take a good look into renegadefx's Chameleon expert advisor trading system. Of course, this is not the first time my eyes have shifted to their expert advisor website but I had refrained from reviewing them until they showed enough information so that I could issue my opinion about their system.

The first thing I noticed abou the Chameleon expert advisor is that it is really expensive. Now, this has nothing to do with it's profitability but it's price is far superior to the average ea which is between 100 and 400 USD. Creators that put such high prices on expert advisors usually consider that they are offering something much better than what the competition is selling. However, if the ea is actually profitable, their price would not be so high to pay.

When starting to analyze the way the ea trades according to their back and live testing I realized that most of the trading strategies used by this expert advisor often hold large amounts of open draw down. You can see that most of their trading strategies hold open draw downs far superior to their already adquired profits. The most profitable strategies, such as the martingale, is based on taking huge amounts of risk at certain times so it is obvious that it is highly prone to blow an account.

In my opinion, having such a large amount of acumulated draw down is an excesive "transparent" risk. The thing with this type of experts is that the true maximum draw down is "hidden" as it is never actually realized. Nonetheless, the experts are at some point or another losing very large chunks of capital. For some of the Chameleon strategies shown in live testing this can be as huge as 10 or 15 times the amount of already realized profits. Another interesting factor is that backtests are conveniently cut to one year. I have never considered this a good sign as it often point to previous years being unprofitable with the same settings.

I would not consider this ea worth buying as there are several lower priced expert advisor which offer more trading evidence and less suceptibility for the accumulation of high open draw downs. If you would like to learn more about automated trading and other free and commercial expert advisors I have bought and reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

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