Thursday, May 27, 2010

Forex Expert Advisors : 4x Cash Compounder, an Unbiased Review

One of the most recently released trading systems is the 4x Cash Compounder expert advisor. On today's post I will write a review about this system which will first analyze the evidence provided by the authors and then compare this evidence with the claims made on the website to see if the 4x Cash Compounder can actually prove its claims of profitability. After analyzing if the EA does have enough evidence to backup its claims I will analyze the soundness of the trading tactic used by the system and give you my opinion about whether or not this trading system is worth buying and testing.

In the beginning of the website we have very common - yet rarely proven - claim. The website clearly states "A Robot that Works !". Is this actually true ? Does the 4x Cash Compounder has enough evidence to say that it will provide you with profits for a long time into the future ? The website says that the EA works day in and day out, month in and month out. Could all this be true ?

And then, reality kicks in. What evidence do the people at 4x Cash Compounder give us ? Almost nothing. The author of this EA only gives a very limited five month backtest on his website that reveals several problems with this trading system's stratedy. First of all, the backtest is done on 5 minute charts, which has an inherently lower modeling quality and second, the tests are limited only to the past 5 months. Morevoer - and most dangerous - this expert uses a Martingale trading technique which puts large chunks of your account balance at risk as the number of loses continues to grow, effectively taking you towards a wipeout in the future.

Why is the backtesting limited to 5 months ? Watching the trading tactic of this system it becomes evident that this expert may fail bluntly with a long enough backtest. Looking at a 5 month period you can already see the spikes of volume inherent to Martingale trading and looking at further testing periods is only bound to increase the problem. Why in the world would a company choose to give 5 months of simulations instead of 10, 20 or 100 ? The answer is obviously simple, this trading system is most likely a time bomb that is bound to wipe your account eventually. All martingales eventually fail and this one wouldn't be the exception.

Then we have the next obvious problem which is the lack of live testing evidence. If the creators of the 4x cash compounder are so sure about its profitability then why in the world don't they show live investor-access verified accounts with the trading resutls of their own EA ? Why aren't there any live results at all ? Everytime you see an EA seller that does not show investor-access verified results you are looking at a seller who simply doesn't trust his money with his product. Why would you trust your money if the guy who created the software doesn't even mind ?

Overall the 4x Cash Compounder is nothing but another overhyped trading system with very limited evidence and an obvious will to hide additional evidence that could prove the expert to be unprofitable. For this reason, the lack of complete backtests and any live testing results plus, because of the use of a very risky Martingale technique, this system is -in my opinion- absolutely NOT worth buying and testing. In order for me to even consider rewriting this review the owner would need to provide 10 year backtests, eliminate the Martingale progression and provide a 6 month investor-access verified live test coupled with a backtest of this same period to prove consistency. In the meantime... Another piece of worthless hype goes to the EA trash can.

If you would like to learn more about automated trading and how you too can code your own systems with reliable profit and risk targets 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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