Sunday, April 11, 2010

Forex Expert Advisors : Reservoir Pips, an Unbiased Review

On my weekly search for new expert advisor releases I found a new trading system called Reservoir Pips, this trading system guarantees long periods of 100% (no loses) with a very high profitability which is bound to bring great profits to any trading account. Withint today's post I will write a review about this trading system. As always I will focus on the evidence shown on the trading system's website comparing it to the claims made by the authors of the EA. After looking at all this information I will be able to give my opinion about this trading system's long term profitability and whether or not I consider it worth buying and testing. Will the reservoir pips trading system be up to the task or will it show us to be another over-hyped useless trading system which is not able to backup its claims ?

I have to say that the company from which this EA comes does not help it at all. The Next Generation FX Trading company has been characterized by its dishonesty and chessy marketing tactics. They have always tried to sell their systems using pure hype and limited back and unverified live testing information with an obvious willingness to hide information which would help their customers purchase their products. It is obvious to me that these people make expert advisors to sell, not expert advisors to trade profitably in the long term.

I would like to say that the reservoir pips trading system is the exception but sadly this is not the case. What the website reveals is a trading system which has an extremely high risk to reward ratio with the average profit being many times lower than the average profitable trade. How much ? Since they only show backtests which are limited to only profitable trades it is impossible to tell but by the only loss they show they seem to work on a more or less 10:1 risk to reward ratio. Since the trading system does NOT setup any Stop loss it becomes impossible to know the exact value (or if it is even fixed at all). What I see is a stuborn EA which is unwilling to accept loses and which has very large open draw down values (check the relative draw down values on the backtests). Add to that the fact that the backtests are carried out on 15 minute time frames and you have backtests which probably grossly overestimate profitability, in virtue of the small TP taken by the EA it is also worth saying that one minute interpolations may also have a GREAT effect in the overestimation of profits.

Now, a week ago there was a one week live account statement on the website but, oh surprise, it is not there anymore. Of course, this forward testing account (cannot say if it was live or demo because there was no investor access) was trading at a very high risk level which without the use of a SL would point out that this EA simply risks 100% of your account per trade as it simply does not seem to close losing trades or closes them by an internal logic on a VERY unfavorable risk to reward ratio. I am surprised at how this people can be SO unethical. Why do they place a live test to encourage the use of very high risk and then remove it when ti wipes the account ? Of course, this people don't give a damn about the profitability of the people who buy the system, they only care that the people will buy the system, it doesn't matter to them if they then wipe their accounts.

I have to say that it definitely makes me sad that there are people who are willing to sell their customers any piece of software without any testing or reliable evidence to backup their claims. The truth, as I said, is that these people simply don't care, they want to make people believe something is possible when there is simply NO evidence to backup any of this system's claims. They also post live tests which they later remove to hide that fact that the account was probably wiped. Can people be more dishonest ?

To sum it up, the reservoir pips trading system is NOT worth buying or testing, it is an over-hyped piece of software which has no reliable evidence to backup its claims. In order to redo this review I would need to have the authors publish at LEAST a 10 year backtesting report with a 6 month live test (investor access verified) of the system to show its true face. Probably they will NEVER come up with this evidence since their systems are simply not designed to make people profitable in the long term, they are designed to be sold on cheesy and dishonest marketing techniques.

If you would like to learn more about automated trading and how sound trading techniques can work in the long term to help you become profitable with expert advisors 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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