Wednesday, March 31, 2010

Forex Expert Advisors : StealPips, an Unbiased Review

During the past few days I have received both spam and review requests from Asirikuy members for an expert advisor which has just been released. This new trading system called Steal Pips, promises to deliver consistent long term profits with a "price action" based trading strategy. On today's post I will review this trading system; as always I will look into the evidence provided by the authors as well as the claims made on the website to see if the Steal Pips expert advisor has reliable evidence to backup its claims or if it's merely another over-hyped worthless system. Based on the evidence shown I will also evaluate the trading tactics used by the Steal Pips expert advisor and I will tell you if the system ir or is not worth buying and testing.

The Steal Pips website begins with some claims of "long term profitability" followed by a "live statement" which is supposed to show verified trading results. I have to say that this guy, which seems to be the same creator of the USDBOT (or at least using very similar marketing tactics) treats us like if we didn't know anything about forex trading. What in the world are we supposed to conclude from an account statement which is only 2 weeks long which is not verified by a third-party and which risks 10% of the account per trade ? Yes, that's right, if you look into the statement, the profits are achieved on a VERY high risk. Would anyone with any sense of sound risk management risk that much ? Absolutely NOT ! It is obvious to me that these results were obtained on a demo account (there is no proof of it being a live account, no investor access, etc) with the simple intention of showing high gains when in reality trying to achieve such results is bound to place the trader within reach of an account wipeout. Showing this result is not only insulting to people's intelligence, it is also misleading and unethical in the sense that it makes people believe they can achieve a certain result in a "long term manner" when in reality these results are the result of a mere 2 weeks of trading using an abnormal and unsound level of risk.

The when we head down the website we find some backtesting statements which show us more about this system's trading tactics. The backtests shown reveal the use of progressive money management, doubling the lot size used after a loss (a Martingale system). On a single year backtest on the USD/CAD, these progressions reached their fourth level meaning that starting with a 2% risk, the person would have been risking 16% on a single trade. If only two more consecutive loses had been reached, the owner would have been risking more than 60% of the account ! Then we also see that the backtests are limited to a period smaller than 2 years, what are we supposed to conclude from this ? Obviously 10 year backtests are not shown because the Martingale probably blows up the account on some years and the author does not want these results to be shown for obvious reasons.
I have to say that the StealPips expert advisor is a strong disappointment. Not only does it expose incomplete, unverified and extremely limited evidence of profitability but this evidence also reveals a system which is inherentely VERY risky, a system which will certainly put anyone who trades it on the brink of an account wipeout. I believe that the owner- if he is really a trader- knows that these tactics are extremely risky and that they put people's equity at a great risk. Then why does this person sell such a system ? I find it unethical and simply disgusting for someone to try to sell a product merely on the concept of "hype" without any regard for the profitability his customers will truly have in the long term.

Due to the fact that the Steal Pips system uses Martingale money management (which eventually causes a wipeout) , and the facts that 10 year backtests are not shown and that "live" testing is extremely limited, uses a lot of risk and is not verified I consider the Steal Pips system definitely NOT worth buying and testing. In the future I would encourage the author of this EA to take a deep look into what he is selling and consider the real risk his customers are being exposed to when buying his products. A person selling a product has a responsability to educate people about the risks of what he or she is selling NOT a right to take advantage of anyone's ignorance.

If you would like to learn more about what I have learned in my journey through automated trading and what I consider the best and most reliable road towards the building of wealth using trading systems made to achieve long term profitability with sound trading tactics and controlled risk 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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