It seems odd to me that it took me so long to find the forex hacked expert advisor since I regularly look into new experts on expert advisor review websites, blogs, etc. I found this EA today while looking at a "review" website that simply attempted to sell these and other experts through affiliate links. Since I had not reviewed this EA I decided to dedicate today's post to the evaluation of this expert and its claims. Of particular interest to me is the fact that this EA seems to enjoy from some pretty positive feedback from other sources so I wanted to see what it was all about.
The expert's website is actually not bad at all, straight cut to forward testing results, independent testing results on their testimonial section, absence of too much marketing hype. I mean, this certainly looked like the type of EA seller I like and definitely like the type of system I would be inclined to test. However everything changed after I started to look at their live testing results. What is this ? Not to my surprise, all the profits and expectative generated with this EA had an evil root... Martingale trading.
This "money management" technique seems to haunt me like a ghost. Why is it that people insist on the development of Martingale systems since there is obvious and ample statistical proof that definitely says they are NOT profitable in the long term and that they will FOR SURE wipe your account ? Well, it seems to be that the short term profitable results are just too appealing and people often think that large enough account sizes are enough to avoid getting wiped with this expert advisor type.
No, no and NO ! The reason why non of these strategies work is because risk increases expontentially with each lot size traded while rewards only increase linearly. For example, if you have a 500 USD account trading a determined lot size a 5000 USD account trading the same will only have about 3 times less risk than the 500 USD account while it would make the same profit. If an account wiping event happens once a year on the 500 USD account it would only happen once every 3 years on the 5000 USD account, but the wipeout on the 5000 USD would wipe out 10 times more equity. No matter how much you increase your initial balance, the strategy will always get you in the end with MORE loses.
If you think you can just "withdraw profits" you are also wrong, martingales do not show patterns of wipeout, it can happen once in 3 years then in one month 6 times in a row. So if you try to do this, eventually a series of consecutive wipeouts will take all your balance plus any new balance amounts you put upfront. Yes, you can get lucky, withdraw profits and then stop trading but chances are that if you try this a few times it will get back to you. If you want to trade a Martingale, go to a Roulette and bet all your account balance on the black ! You will have more chances of doubling your money ! trading is not gambling and a Martingale system just gambles your whole account size due to its limitless market exposure.
For this reason, this forex hacked system is definitely NOT worth buying and if I was you, I would get my money back before things turned sour (if you have purchased it). If you would like to learn more about systems with rational money management techniques and how you can trade this profitably in the forex market as well as how you can design and program your own long term profitable 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 !
The expert's website is actually not bad at all, straight cut to forward testing results, independent testing results on their testimonial section, absence of too much marketing hype. I mean, this certainly looked like the type of EA seller I like and definitely like the type of system I would be inclined to test. However everything changed after I started to look at their live testing results. What is this ? Not to my surprise, all the profits and expectative generated with this EA had an evil root... Martingale trading.
This "money management" technique seems to haunt me like a ghost. Why is it that people insist on the development of Martingale systems since there is obvious and ample statistical proof that definitely says they are NOT profitable in the long term and that they will FOR SURE wipe your account ? Well, it seems to be that the short term profitable results are just too appealing and people often think that large enough account sizes are enough to avoid getting wiped with this expert advisor type.
No, no and NO ! The reason why non of these strategies work is because risk increases expontentially with each lot size traded while rewards only increase linearly. For example, if you have a 500 USD account trading a determined lot size a 5000 USD account trading the same will only have about 3 times less risk than the 500 USD account while it would make the same profit. If an account wiping event happens once a year on the 500 USD account it would only happen once every 3 years on the 5000 USD account, but the wipeout on the 5000 USD would wipe out 10 times more equity. No matter how much you increase your initial balance, the strategy will always get you in the end with MORE loses.
If you think you can just "withdraw profits" you are also wrong, martingales do not show patterns of wipeout, it can happen once in 3 years then in one month 6 times in a row. So if you try to do this, eventually a series of consecutive wipeouts will take all your balance plus any new balance amounts you put upfront. Yes, you can get lucky, withdraw profits and then stop trading but chances are that if you try this a few times it will get back to you. If you want to trade a Martingale, go to a Roulette and bet all your account balance on the black ! You will have more chances of doubling your money ! trading is not gambling and a Martingale system just gambles your whole account size due to its limitless market exposure.
For this reason, this forex hacked system is definitely NOT worth buying and if I was you, I would get my money back before things turned sour (if you have purchased it). If you would like to learn more about systems with rational money management techniques and how you can trade this profitably in the forex market as well as how you can design and program your own long term profitable 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 !
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4 comments:
Well, it's not a classical martingale system using. So your review is pretty wrong. Tell me ONE only ONE expert advisor which is really working according to your opinon. You could help me and other traders a lot. Many thanks in advance. best regards,
Hello Mark,
I don't think that my review is wrong in the sense that it is a pretty classic martingale (in the future, please be more specific as why it is wrong rather than just saying it, I will, without a doubt, change my opinion if a strong argument is given in favor of the trading system). Trade size is almost doubled after every loss in an exponential manner (again, classic martingale behavior). Also, even trading systems that use linear lot size increases after loses are also doomed to account wipeouts because of the unlimited market exposure. As I have said on various posts, there are several reliable trading systems, the one I trust the most being the god's gift ATR which has been trading as expected in several different live accounts (you can check the god's gift ATR label for more info).
I know that the Martingale and incremental money management topic is a sensitive one since most people believe they can be profitable with them because of the very good results shown by many of these systems, but in the end, they will cost you your account. I hope this helps !
Best Regards,
Daniel
Hi Daniel
Ok, good point. I just said wrong, because I have had excellent results up to date. So I can't specify it more. Therefore you are right.
God's gift ATR? Never heard of it. How exactly can I get this one?
Many thanks in advance.
Best Regards,
Mark
Hi Mark,
It is a free expert advisor I programmed as a modification to Matt Edmonds original god's gift 7c expert advisor. The EA can be downloaded in forums and other places in the web for free . My automated trading ebook comes with testing results (both live and backtesting since 1999) as well as a detailed manual explaining the logic, the ATR adjustments and a general FAQ. The expert's live results have shown to match backtesting results and several currencies and brokers are being tested (settings for each currency are also included within the ebook or the newsletter subscription). Again, check the god's gift ATR label on the drop down menu in the left sidebar to get more info.
If you are interested in expert advisors in general and programming and designing your own long term profitable systems I would recommend you take a look at my ebook. Thank you for stopping by,
Best Regards,
Daniel
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