Saturday, March 27, 2010

Forex Expert Advisors : Forex Brilliance an Unbiased Review

Continuing with the last few days of new expert advisor reviews, today will be the turn for a new trading system which "mimicks the way the human brain works" called Forex Brilliance. Within this post I will do my best effort to review this new trading system in the light of the evidence of profitability provided by the authors and the claims they make about the system. By analysing the trading methods of the EA based on the evidence provided on the forex brilliance website I will also be able to tell you my opinion about its likehood of being long term profitable and whether or not I consider it worth buying and testing. In the end you will know if the authors of this trading system are really able to provide enough proof to backup their claims and make the forex brilliance EA worth buying or if they are simply selling another over-hyped most likely useless trading system.

I think it is worth mentioning that the claims of these sellers are specially bold in the sense that they say that their expert trades "like the human brain" but with "no emotions". I have to say that it is extremely unlikely that any metatrader expert advisor with the present level of development will be able to achieve such claims, due to the enourmous complexity and obviously computationally superior capabilities of the human brain. However, I understand that this may simply be a marketing tactic to make people feel that the expert "trades like a proffesional" using the best attributes of analysis used my seasoned traders.

Now we have to pay special attention to the evidence provided by the authors about the trading system's profitability. The first evidence shown is completely useless since it is merely a picture of some hand picked trades and gives us no idea about the expert's overall performance other than the fact that its risk to reward ratio appears to be about 1-2:1 which of course is not relevant information unless a very large sample of trades can be observed.

Then we get to what appears to be the core of the evidence shown by the people selling forex brilliance, backtesting statements of several pairs from 2004-2009 showing very good profitability. Be very careful with these backtests. There are many ways in which backtesting can be manipulated to generate extremely profitable results including exploitation of 1 minute interpolation errors, hindsight, curve fitting, etc. It is very important here to note the COMPLETE absence of any live trading results. This is extremely important since it reflects the fact that the authors of the trading system did not trust the system enough to invest their OWN money. I remind my dear readers again that the burden of proof is on the authors NOT on your live accounts.

The fact is that the forex brilliance trading systems seems to be nothing more than yet another over hyped trading system with little real evidence to backup their claims. The fact that they show backtests tells us nothing without the inclussion of live tests with investor access to verify live/back testing consistency. As far as we know, the backtests can be terribly manipulated and bear no indication about the expert's future profitability. So it is pretty simple, until the people at forex brilliance do not add at least 3 months of third party investor access verified live testing results with a backtest of the same period of time to evaluate consistency this trading system has NO evidence to backup its claims of REAL profitability and therefore I consider it NOT worth buying an testing.

As always, I fail to understand why the authors of expert advisors invest thousands of dollars in marketing and yet they fail to invest a few hundred on live accounts which would truly help them backup their claims. However, if they are lying, then why invest in something which is bad for their business ? To add insult to injury, they do mention having tested this EA on their live accounts so why isn't this evidence shown ? I think we all now how much truth there really is to their story.

If you are interested in truly learning about automated trading and how it can become a realistic long term investment strategy using reliable trading systems based on sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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