Thursday, April 15, 2010

Forex Expert Advisors : Forex Dynasty an Unbiased Review

Today I will be revieweing another new expert advisor which came out during last week. This new trading system, called Forex Dynasty, promises to deliver very large profits in a very small amount of time. As with all my other reviews I will first go through the expert's evidence and I will compare it to the claims made by the author to see if the forex dynasty system has enough proof to validate the claims provided. After analyzing this evidence and its reliability I will then analyze the trading system's tactics to evaluate its like hood of long term profitability and finally, after all this analysis, I will be able to give you my opinion about whether or not the forex dynasty trading system is or is not worth buying and testing.

The forex dynasty website greets us with what seems to be a misleading and meaningless claim of being able to make more than 100K in under 20 minutes. First of all - as I have said several times - saying that you can make X profit without mentioning the risks involved or the capital needed is absolutely pointless. Sure, a system can make 100K with a 1 million dollar investment in under 20 minutes with a moderate (yet high) account risk, I can assure you that. However saying that a 10,000 USD account is able to make more than 100K in 20 minutes is simply VERY misleading, sure, it could be possible under very volatile conditions and an EXTREME risk but achieving such a feat would be a one-time success based on luck rather than an achievement based on sound mechanical trading. So, the claim made simply doesn't say anything, it doesn't mention risk or initial capital, it is simply worthless.

Moving on we see that the evidence presented to backup the system's profitability is limited to a single backtesting statement which gives us a LOT of evidence about this trading system's tactics. First of all, we can see that the system trades the EUR/CHF on the 30 minutes chart. I have to say that the historical data for the EUR/CHF is not very reliable (diverging significantly from sources of reliable tick data like Dukascopy or Oanda) and I am inclined to think that data before the year 2006 is actually pretty much useless so there is a very limited usability for a 10 year backtest. Moreover, backtesting on the EUR/CHF seems to generate extremely profitable results with an astounding frequency, without these results ever being reproducible in live trading. I have to say that the profits made on the backtests are not realistic and a simple consequence of backtesting faults inherent to the use of the 30 minute charts, the EUR/CHF and probably the experts trading technique.

Looking upon the trading tactic used by the EA we realize that the forex dynasty system has an unfavorable 4:1 risk to reward ratio, meaning that you need to win 4 times to make up for a single loss. This seems to be quite common for EUR/CHF systems and in general for systems which generate an equity curve similar to this one in backtesting. As always, you simply CANNOT believe the backtesting results presented by commercial EA sellers because there are simply too many things which can be done to aritificailly generate very profitable tests, evenmore, some of these problems may be present without knowledge of the EA creator, programmer, since sometimes these programmers are not very knowledgeable regarding metatrader backtester limiations and they are merely eager to get a profitable equity curve.

One good thing I can say about the forex dynasty trading system is that there seems to be an honest effort to present demo trading results verified through myfxbook. Although FAR from ideal (since a live account is always mandatory), the fact that the currently losing results are not being removed points that the creator is willing to be honest - if only to a small extent - with his or her audience. The forward test is currently too short but my best guess is that the large difference between demo/back testing results will be shown clearly within the next few months.

Now what I absolutely HATE about this website is that the creator of the system is lying the whole time. The story is - in itself - the way in which the author hangs him or herself and shows his or her dishonesty. The creator points out that with this very system he or she was able to gather a 17K profit from the market. Why in the world does this person NOT show live tests with these results ? Moreover, why didn't this person take 100 USD from this 17K and fund a live account to test the EA ? Obviously this story about the origins and initial trading of forex dynasty is simply an unecessary lie to increase the hype around the system. If it was true, then why not show all the evidence which would naturally arise from the story ?

Overall, I can say that the forex dynasty trading system currently lacks evidence for long term profitability and its claims are therefore not proven. The backtest shown is not validated by live trading evidence and the only forward testing evidence presented is a demo and not a live test. For all this reasons I consider the forex dynasty trading system NOT worth buying and testing since there is simply NO reliable proof of profitability. If the author provides a 2-3 month live test coupled with a back test of this same period to gauge back/live testing consistency, I'll be glad to redo this review.

If you would like to learn more about what I have learned in automated trading and how you too -through effort and knowledge- can arrive at long term profitable trading using automated trading systems 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 !

No comments:

Daniel Fernandez's Expert Author Email Alerts
Sign up to receive email alerts of Daniel Fernandez’s latest articles from!

Email Address: