Wednesday, May 27, 2009

Forex Expert Advisor Programming/Knowledge Course

Throughout the whole time I have worked on forex expert advisors. I have seen that most of the traders that want to be successful with automated trading systems have no knowledge whatsoever about expert advisors, expert advisors programming and what and what cannot succeed in the world of forex automated trading. I believe that in order to be truly successful in automated trading one must not only know a lot about forex trading but one must also know a lot about how automated systems work, what indicators do, what they mean, what they represent and what the limitations and advantages of different trading strategies are.

With this in mind, I have decided to start a personalized course which seeks to teach any individual willing to truly learn the ins and outs of automated trading many of the things I know about manual and automated trading systems. The course is suite to different types of traders (since I design it individually) from beginning traders who want to learn about the market and automated trading systemss to advanced manual traders who wish to automate their current trading strategies themselves. The course may cover any of the following topics, as requested by the person who wants to take the class.(these are all I can think of right now but make sure you leave a comment if you would like to know if I can teach any other content)

- Introduction to forex trading and the forex market
- Mathematical base and meaning of different indicators
- Manual profitable trading systems
- Money management strategies (what works and what does not,)
- Automated system characteristics
- Profitable automated trading strategies
- Manual vs Automated trading, what can and what cannot be translated
- Programming automated trading systems (mql4)
- Debugging and optimizing an expert advisor
- Back testing vs Demo vs Live testing an expert advisor

The course will be given in 10 hours (programmed as per the individual's request) and has a cost of 200 USD payed via paypal or wire transfer (this is extremely cheap when compared with most seminars which aren't even individual). The course will take place on Sundays or Tuesdays (2 hours per week for 5 weeks) and will be given via skype. Since this takes up my time and the course is indiviual, I will only be able to take a few people each month. If you are interested please send me an email to . Please include your available hours on Sunday and Tuesday, local time and current level of experience in the forex market and what you will be expecting from the class. I will then answer your email and send you an invoice so that you can issue your payment and start the automated trading class. Thank you very much for your attention !

Monday, May 25, 2009

The Vicious Cycle of Expert Advisor Testing

A few days ago I read a comment by someone on a blog saying that he had nothing against expert advisors but that he never participated in discussions or reviewed expert advisors because of the way they are currently being tested and commented on. I couldn't agree more with him. The way most expert advisors are currently being tested and reviewed by the general public is not only wrong in my opinion but also problematic, misleading and fruitless. After studying several community review sites and forums I came to the conclusion that there is a vicious cycle happening which people hardly ever notice. The cycle always seems to go through the following steps :

1. Discovery - A new system is discovered and people start to hype around it. This can be a free or a commercial system. People start to do backtests and to encourage the development of the system as a group. There is a high expectation for the system and the way it performs. Generally the strategies are short term profitable, with high risk to reward ratios.

2. Early Forward Tests - Some people now start to put the experts on demo accounts to see if the backtesting they have done has anything to do with reality. Generally the experts produce good amounts of profit in small amounts of time, further encouraging the hype produced on the earlier moments.

3. Failing Period and Reoptimization - A period starts when the ea begins draw down accumulation and people start to change it, introduce new parameters, optimize current settings, etc. The hype starts to go down because people find that the system did not work across all market conditions.

4. System Trashing - By this moment all the hype has gone down and people are already in the discovery phase of a new trading system. All testing of this expert advisor is discontinued and testing is focused on new expert advisors. This ea will probably go through this cycle once more when someone rediscovers the system in a year or two and becomes exited by the initial forward and backtesting results.

The problem with this cycle ? The people here lack a good understanding of how automated trading systems actually work in the long term. People tend to generalize results that are obtained in very reduced time spaces (2 months for the longest, less than a week for the shortest) and they often try without any success to modify the ea in order to prevent draw downs on those small time periods. The problem I guess, is that most of this people are not really profitable with any automated system and they are just desperately trying to find one that works, trying to extrapolate very small trading tests towards the whole profitability of the expert advisor. Their efforts are fruitless because no meaningful trading information is gathered and they also misguide people since some of the systems they trash are actually profitable in the long run but experienced a period of draw down (which can last months for long term profitable systems).

My readers should know that this is the complete opposite of how I do my testing. All of the experts I trade have their logic rigorously examined and backtested before testing, they then have extensive periods of forward and even live testing in which I know the draw down that is expected (hence I do not run if the system enters draw down). I do not trade systems with high risk to reward ratios and I always look for systems that are consistent performers in the long run (at least 10 years). I am not interested in short term profitable systems because I am interested in long term profitable systems which often have draw downs that last for 3-5 months and I am ok with this because I know, it is just the way the market works with forex automated systems.

If you would like to learn more about the systems I have tester or I am currently testing 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, May 24, 2009

God's Gift ATR - Towards the Best Documented Expert Advisor

For the past year I have been developing and testing the god's gift ATR expert advisor, a modification I wrote of the original ea written by Matt Edmonds called god's gift 7c. Throughout all of my posts you may have seen how this expert advisor behaves on the market and how it performs under very varied market conditions. With each passing day I become more and more convinced of the large potential of this automated trading system on the real forex market.

Now, I don't want this ea to be the same as all the other expert advisors out there offered by the different commercial ea sellers. My compromise is with the retail traders out there who really want to be profitable using an automated trading system with real expectations and profits. For this reason what I intend to do is to slowly turn my forex automated trading ebook into a guide for profitable expert advisor trading using freely available systems. What I want to do, is to turn the god's gift expert advisor into the most documented and reliable expert advisor out there.

For this reason I wrote the god's gift manual a few days ago (included with my ebook or newsletter subscription) to start showing people exactly how the logic works and how the ea trades the market. I am also developing an extensive footage of simulated and live taken trades which show exactly how this ea both wins and loses in the forex market. I want people to know why this expert advisor trades and when and why it's logic can be really trusted.

For this same reason I have decided to trade this ea on 4 live accounts which can be seen with my newsletter subscription (along with the one year previously done forward test which accumulated more than 100% in profit). I want all the back and forward testing that has been done to be validates by the expert's trading in real, live accounts. Moreover, I will start to test this ea on several brokers once the testing of the current accounts reaches the first year of live testing in March 2010. Hopefully, god's gift will become the most documented, reliable and trusted expert advisor out there to make achievable amounts of profit in the foreign exchange market.

If you want to learn more about the god's gift ATR expert, including new versions, tests and the god's gift ATR manual 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 !

Saturday, May 23, 2009

Living From Automated Trading System - How Much Money do you Need ?

Well, since most people start trading forex to get out of their 9 to 5 jobs and gain financial independence, I decided to write an article just about that. This article will try to cover several aspects about how much money you actually need to become independent and star to earn a living from forex automated trading. You will see that is not as straight forward and easy as most people make it seem and it requires far more skills than the ones expert advisor sellers would like you to believe.

First things first. Can it be done ? Yes, I have been doing it for the past 6 months. Sure, I still work (because I love my job) and also have other streams of income like this website. Would I leave every other stream of income to live from forex automated trading ? Probably not, and there are several reasons why this is not the case.

But well, realistically, how much money do you need to have in order to maintain your living standards and quit your day to day job ? I would have to say that you would need to have at least 2 times your yearly income saved up. Any other way, you are just going to get grinded by the market or you'll not make enough money as you do now with your full time job. The reason why this happens is called market exposure. In real life, it is very difficult to make money in the forex market (that is, make money you will be able to keep) and when you put your money out there and make some, you are exposing your capital.

So what does this mean ? Well, it means that the more you make, the more you are likely to lose. In profitable systems (in my experience) this means that you will sometime lose 50% of what you will eventually make. So for example, a 25% yearly profit would have a maximum draw down near 13% (not exactly, depending on the system and other variables but sort of). So if you want to be safe, you could be making 20-30% of your capital each year but to live from this, that 25% must be equal to your current yearly income so you would need 4 times your yearly income or at least 2 times your yearly income but your capital's risk would be higher (50% profit with about 25% draw down).

Now if you are currently making 40K USD a year, do you have those 80K USD saved out there ? My best guess is that you don't since most of the people who want to live from forex are generally in debt or have a small amount of savings generally in the order of 10 to 20% their yearly income. Now you know another reason why so many traders lose money. Most of them are undercapitalized not to say undereducated (forex wise).

Why will I continue to work ? I would not consider living completely from automated trading systems since they are, after all, high risk investments and they lack continuity in the way they make money. Most profitable trading systems will have draw downs which can last for 2, 4, or even 6 months and well, I do need food every month. So I consider automated trading systems as a saving strategy towards an early retirement. I would like to have a few million in 20 to 40 years and I really do not mind if there are a few draw down periods along the way as the money that is invested is money I do not need at that very moment.

Well, if you would like to learn more about commercial and free expert advisors I use to trade, experts I have programmed, 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 !

Friday, May 22, 2009

Forex Expert Advisors : BankingFX , an Unbiased Review

Bankingfx is an expert advisor selling company which sells different expert advisors, mainly the Diamond and Ultra forex automated trading systems. At first sight, the website seems to be pretty simple without too much hype and with the testing information links readily available for anyone to see.

Their expert advisors are what you would usually expect from a commercial expert advisor these days. They trade the EUR/GBP and EUR/USD respectively and they aim for low profits and high winning percentages. Their backtesting results are of course excellent with very high profit ratios and amazing amounts of winning trades. Obvisouly, the risk to reward ratio of their experts is very high with almost 10 winning trades needed to overcome one single losing trade.

What I like about this company is that it is a perfect example of how this type of expert advisors completely fail to perform on the real market. The profit you see on the backtestng resports is absolutely based on the one minute interpolation erros of the metatrader strategy tester program. The proof of this ? Their own forward testing results ! When you look at the forward testing results for the ultra expert advisor you will find out that the ea does not perform as it does in backtesting, it had huge loses which it wasn't unable to recover from because of it's high risk to reward ratio. The picture below was taken from their forward testing which was for some reason stopped in November 2009 (I bet you can guess why !).
Compare that to the backtesting chart shown below. The ea clearly changes a lot between forward and backtesting because the one minute interpolation errors have huge impacts when you have low take profit values and very high risk to reward ratios. It is also very worth noting that the forward testing for the Diamond expert advisor have been completely removed ! (pretty strange, right ?).

This expert advisors are definetely not worth buying but they are a very good example of how the profitability of an expert advisor can change in a very dramatic way between back testing and forward testing and how strategies with high risk to reward ratios are not profitable in the long run because their profitability is based on market randomness which changes amongst different market conditions. If you would like to learn more about other free and commercial expert advisors I have tested and reviewed as well as how to chose and evaluate automated 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, May 21, 2009

Expert Advisor Piracy, It Will Cost you Money

During 2009 many things have changed within the expert advisor and automated trading industry. We have seen many commercial expert advisors surfacing like megadroid, fap turbo, robominer, etc ; we have seen an incredible increase in strategies with very high risk to reward ratios and of course, we have seen an increased number of people losing money in the automated trading industry. Another very important development within the industry is the surfacing of many expert advisor decompilers for the ex4 files compiled with the metatrader editor.

Of course, the consequence of having a widely available decompiler is that many people started to decompile commercial expert advisors to get a look at their trading logic. This is by no means wrong or illegal as US law and most other countries laws allow someone to decompile software to see it's inner working unless a specific EULA preventing this is signed (this is not the case for most expert advisors). My main concern is with the later use and distribution of this code for free for other traders to use.

The distribution of copyright material without permission from the authors is unlawful in every country. Most people say that if they had to buy every expert advisor they would go broke and that is the reason why they prefer to download the full versions for free, illegaly. Well, the fact that you can't buy every car model does not justify going out there and robbing cars, doesn't it ?
The fact that some expert advisor creators are dishonest and are just after the customer's money does not also justify software piracy.

What you need to know is to really know how to evaluate an expert advisor and use it. The fact is that if you knew how to do this you would not buy 99% of the experts out there. It makes no sense to get this experts illegally and use them in your live trading accounts. If you do not have a good understanding of automated trading systems you will just lose your money, your trading money, just like if you had bought the original useless software. My advice is that you learn, read, program and know everything you can know about trading and automated trading systems. Do not go out and break the law, just because it fits your lazyness, I tell you, it will cost you a lot of money.

If you want to learn more about free and commercial expert advisors I have bought, 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, May 20, 2009

Forex Expert Advisors : ForexGridBot Unbiased Review

Another expert advisor that was brought into my attention by one of my customers is the forexgridbot expert advisor. I have to say that the website is as typical as what you could regularly expect for a commercial expert advisor. The picture of the box with the cds (why the hell do EA marketers think that you are more likely to buy something that has a box with a picture on the website ? no idea), the same regular claims about freeing you from your day job, using the same system as the big dogs, etc.

Now, for a small change, we seem to have live account results. Ok, there seems to be some progress on the EA market then, an expert advisor with live trading results ! But wait a second, where are the rest of the regular testing results ? Backtests anyone ? It seems that the authors of the forexgridbot for some reason decided to omit the backtesting results. Well, I have absolutely no problem with that as long as the live testing results are worth anything. Are they ?

The forexgridbot live trading results have several problems. First of all, the results are only one month old. Do you expect us to believe that your system is profitable with just a month of live testing ? Your kidding me, right ? One month is just too little to say anything, you cannot say the system is or is not profitable based on one single month of testing results. Maybe it was a bad month in the middle or maybe the best month ever ? Maybe the system will wipe an account if market conditions change slightly ? Who know. With one month of live testing it is impossible to know.

Second of all, the live testing results offer no investor acces so as far as we know, they could just be made up using photoshop in the same manner as they say on their website that other EA creators forge backtests (do you really need to forge backtests with the benefit of hindsight ? I think no one does) . Again, commercial expert advisor creators should provide live accounts with investor access so that people can really know that the results are coming from an actual account. I will not settle for anything less than that.

As far as the trading logic of this expert advisor seems to go, I have to say that there is too little on the live testing statement to even get a grasp of how this EA trades. The only thing that can be said is that the expert does not have any stop loss and that the trades seem to be closed by an internal mechanism within the ea. Another things is that the forexgridbot seems to grow profits too quickly (100% in 2 weeks) something which tells me that it's market exposure is just too big and that it will blow an account sooner or later (let's see if they remove the live statement then !)

For now, I would have to say that the forexgridbot is not worth buying but the fact that they want to provide live account information is encouraging. I would tell people to wait for at least a year of forward testing and we will see what the market does with this EA. By that time we should also request an investor password to really see if all the information does match or if there have been any alterations done on the statements. Anyway if you would like to learn more about 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 !

Tuesday, May 19, 2009

Forex Expert Advisors : Dragonpips Unbiased Review

My search for forex automated trading systems continue and with it the finding of several new commercial expert advisors. Last week, while looking at my website's statistics, I found out some people came here by searching for ¨dragonpips ea". I decided to look a little bit more into it since I had never heard or read about this commercial trading system. After spending a few seconds on google, I found the expert's webpage and decided to write a small review with my opinions about this expert advisor. As always, I try to be as unbaised and accurate as possible only taking into account the evidence showed by the authors and my experience.

First of all, the webpage is pretty unproffesional (not a bad thing perse) with several blunt typos. The expert advisor authors claim that the ea is very profitable, something which can be infered by the phrase "$1,000 Exploding Into $78,352,326". Now, turning one thousand dollars into a million is pretty hard, do this people honestly think that they can get through with those claims ? Well, they sure do !

The EA creators show absolutely no evidence of profitability with only backtesting to prove their claims. They also offer a money back guarantee if your back testing does not match theirs. What ? If your backtesting does not match theirs ? This is absolutely ridiculuos. You do not buy a trading system so that you can reproduce backtests, you buy it so that you can profit from the market. Again, what are this people thinking ? Trying to tell us a trading system with no real testing evidence and telling us we can turn one thousand into 78 million dollars.

Excuse me, but this expert advisor, the dragonpips EA, is NOT worth buying or testing until they can provide forward testing and live testing statements (with investor access) that can backup their claims. Please, do not fall for their (bad) marketing schemes. Many expert advisors can make that and even more in backtesting. You can do that if you cleverly exploit certain faults of the strategy tester provided by metatrader 4. Sometimes I really wonder how much money could have been saved if the metatrader team had invested a few more thousand dollars on developing an efficient strategy tester.

If you would like to learn more about free and commercial expert advisor systems that have forward or live testing statements 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, May 15, 2009

The God's Gift ATR Manual

As many of you may know, for the past several months I have been developing and testing a new version of the God's Gift ea I coded called the God's Gift ATR. This version of the God's Gift ea contains the original logic with position and market order size management adjusted as a function of the Average True Range indicator. These modifications ensure that the ea remains adjusted to current market conditions and effectively makes the expert's equity curve much more linear than with the traditional version of this expert advisor.

However, many traders are a little bit skeptical about the expert's logic because it seems rather complicated and obscure. They are right to be skeptical ! The god's gift ea logic is not very simple to understand and therefore it became very important for me to create a manual that could explain the inner workings of the god's gift expert advisor. My utmost concern is that traders can trust the trading system they trade and become profitable with real expectations in the world of forex automated trading.

Another very important problem that the manual addresses is the description of each one of the variables within the god's gift ea. Many people are confused by the many different settings that can be adjusted within the ea so the manual also explains what each one of these variables does. In the end I hope that the manual can provide a very good insight into the expert's entry and exit logic as well as the variables contained within the ea and how this can affect the way the expert advisor trades.

The manual is included within the new version of the ebook which is available from today and is also included in the newsletter subscription package for my expert advisors live and demo results. If you would like to learn more about the manual and this and other free and commercial expert advisors 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, May 14, 2009

Short verus Long Term Profit Expectations : Why Expert Advisors are So Deceitful

One of the most common critiques made towards me and my website by several people is that I often make evaluations of expert advisors that contradict what people experience during short term periods. Le me explain myself a little bit better, sometimes I say that an expert advisor is not likely to be profitable or is not worth buying and then I get some comments telling me "oh, I have made money with this ea, you are not right". Well, to err is human, and I would be very happy if one of the expert advisors I have reviewed that I first said was not profitable turns out to be an incredibly profitable trading system but those are not the odds.

The objective of this post is to tell my readers and future visitors why I will most of the time receive these comments and why they do not contradict or invalidate my opinions about the different expert advisors. This situation arises mainly because most commercial expert advisor systems are designed to give short term satisfaction. That is, most of the people who buy commercial systems such as robominer, fabturbo, megadroid, etc, are looking to be rewarded almost as soon as they put their expert advisors to the test.

The consequence is that the ea market has adjusted to this demand and created a lot of expert advisors that trade very frequently and take profits very easily. That is, they are aimed at taking advantage of the market on low time frames to give the trader instant gratification. Since the probability of losing is small, most ea customers will start to trade the system and will feel very good about their new strategy to make money. This also has the advantage of creating a very high customer satisfaction on a very low time scale. Therefore, most of the people who buy the ea will make some money from it in the short run and will not ask for refunds since they are satisfied by their expert.

The problem comes when you look at the systems that are long term profitable and the ones that are not. Systems that tend to exploit short market movements with a low probability to lose tend to have very large risk to reward ratios and are, all the time (in my experience), unprofitabe in the long run. So yes, people buy the system, they get maybe 3, even 6 months of profitable results, then their accounts are wiped out by the ea starting to cash on it's market exposure.

This is logical and sound, no succesful trader I know has ever done so with a strategy that has an unfavorable risk to reward ratio. All of the good traders I know that have been making money for a long time do so with long term strategies based on reliable market logic, not on short term movements with huge risk to reward ratios. The appearence of this unprofitable long term experts is mainly a consequence of the people who buy them, the market just offers what people want, and this is what people buy right now, unprofitable trading systems that offer short term rewards.

So it is your decision, I will not try to sell a long term profitable expert advisor, no one would buy it since no one wants to experience the reality of profitable trading which most of the time includes a low winning percentage, a very favorable risk to reward ratio, opening very few positions each week, or even each month. I interpret these facts as the way the market preserves the 90:10 rules in a system were people are using automated trading systems. Ninety percent of the people focus on the commercial, short term solutions while only ten percent focus on the long term trading strategies that offer realistic returns with adequate risks and the rule remains true, 90% of retail forex traders using automated trading systems lose their money.

If you would like to learn more about 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 !

Tuesday, May 5, 2009

Why I trust the God's Gift ATR Expert Advisor

I have always said that one of the main requirements to succeed with an automated trading system is to be able to trust the system and trade it through all market conditions with the assurance that the system will be able to recover from temporary loses. Trusting and knowing how a system works also enables you to know your system's strengths and weaknesses, something which makes trading with it much easier.

One of the systems I have been working on and testing for a while is the God's gift ATR expert advisor which I programmed based on the original God's Gift 7c programmmed by Matt Edmonds. Now, after being involved and watching this system trade live for more than 2 months I can start to say why I certainly trust this expert advisor. So why do I exactly trust the way the God's gift ATR expert advisor trades ? Well, because the expert's traiding fulfills some of the most important aspects any profitable trading system should (at least in my opinion).

Adjusts itself to the market : This ea uses the ATR indicator in order to adjust it's position sizing and market orders to match a certain percentage of market volatility. This somewhat guarantees that the expert will remain profitable under many market conditions since it is able to adjust itself to the different amplitudes of market movements.

The trend is your friend : The god's gift ATR expert advisor is able to follow trends when they develop by using a trailing stop which lets the expert take advantage of very long trending markets without getting stopped out.

Cut your loses short, let your profits run : The ea is able to cut loses by using an internal closing mechanism which follows many different indicators. This lets the ea exit the market before hitting the stop loss either when the price goes against the trade or when the stop loss is trailed after that price has moved in favor of the trader. This has the clear effect of increasing the ability to follow trends while minimizing the loses generated when the market is not with the trader.

Realistic Profit Expectations with Adequate Risk : The god's gift ea is able of producing 50-100% a year with a draw down not exceeding 20-50% (per back and forward testing results), this is a realistic profit expectation which reflects the conservative way in which the expert advisor trades. The equity curve generated by the ea is globally linear with a neat increase in equity under very varied market conditions.

I consider that the above reasons make the god's gift expert advisor a very unique and sound trading system. The ea has up until now proved to be robust and consistent, something which is a must have for a long term automated trading system. If you would like to learn more about this and other free and commercial expert advisors 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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