Saturday, January 2, 2010

Forex Expert Advisors : Sidewinder M8 Pro an Unbiased Review

I want to dedicate the first review of the year to an expert advisor that has been around my mind for a while. This expert advisor is called M8 Sidewinder Pro and is made by an EA programmer called Hal Chapman at The reason why I believe it is important for me to write this review is because many people believe I recommend this expert advisor because of an interview I did with Hal last year. I never say on the interview that I recommend this EA but the fact that I never reviewed it may seem misleading to some people. Well, today I am going to write a review about the Sidewinder M8 Pro expert advisor, within this review I will evaluate the trading system and talk about the way in which it trades the forex market. In the end I'll give my opinion about this EA and its potential for long term profitability and whether or not it is worth buying or testing.

I have always thought that Hal Chapman is a good programmer and in my mind he always seems to have the traders in mind when developing his trading systems. At least this is the impression I had last year when I did the interview with him. I believe that Hal is selling what he believes is a good quality product that can bring profitability to the people in forex automated trading.

For me, his trading systems have always had mixed performance results. Trend tracer and doubleplay, systems developed in 2007 and 2008 respectively, delivered a terrible dosage of mixed results, with non of them fulfilling my requirements for long term profitability. I have traded both systems on live accounts and I was never profitable with both. As a matter of fact, trend tracer nearly wiped an account. After all my experience and research in automated trading I believe that non of his systems have any potential for long term profitability.

To me things started to go sour as Hal decided to implement a progressive, D'Alembert money management system, which increases lot sizes linearly instead of exponentially like a Martingale. The results are that you increase your market exposure terribly as trades start to go the wrong way. The use of progressive money management techniques is always the failure of sound trading. When programmers cannot find a reliable money management technique that works, they often go to this type of unsound money management techniques. Are they safe ? No. As I say, trend tracer nearly wiped a live account (on lowest risk) and doubleplay came close to risking 20% capital on one trade. This is crazy. I mean, who in their right mind would take such a huge risk in one single trade ?

Sidewinder M8 Pro is nothing more than a continuation of this trading mischief. The so called "second stage defense" is nothing but a more aggressive risk in equity. You can see on the expert's page that lot sizes go up to even 1.7 from the original 0.1. A more than 170% increase in risk. What happens if trades go wrong when you are on the second stage defense ? Your ruined, that is pretty much what happens. Is there any defense against this ? No. The possibilities are real and the numbers are real. If you reach those high lot size numbers and you lose, you'll lose big.

In my opinion Sidewinder M8 Pro is nothing more than an equity death trap. It is definitely an attempt to try to salvage a weak logic with the inclusion of an extremely unsound money management strategy. I would advice Hal to go away from this trading techniques and into sound money management techniques with money management that adapts to both risk, equity and market volatility, this is the only way towards reliable long term profitability without such unsound and large equity risks. As you have seen, in my opinion and due to the incredibly large risk in which this EA puts equity in risk I would say that it is NOT worth buying or testing.

If you would like to learn more about adaptive money management techniques and how to develop sound and long term 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 !

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