Sunday, May 9, 2010

Forex Expert Advisors : Forex Lightning, an Unbiased Review

Ending this week of heavy revieweing of recently released expert advisors I present you the Forex Lightning trading system. A website visitor left me a message on the website's chat a few days ago asking me to review the system and therefore I am writting this post to honour his request. Within the next few paragraphs I will talk about the evidence provided on the expert's website as well as whether or not this evidence is able to backup the claims of profitability made by the author. I will also analyze the trading evidence provided and give you my opinon about the trading system's potential for long term profitability and whether or not I consider it worth buying and testing. Is the forex lightning the answer ? We'll see within the next few paragraphs.

The Forex Lightning website must be one of the most simple websites I have seen selling a trading system. The website merely has two pages, one for the system and one for support with the first one being just a little bit more than two screens long. The system's page also contains the evidence of profitability provided by the author as well as some testimonials (which we cannot know to be true). The claims made are very simple with the expert showing some profit figures on the top left showing more than 1000% profit for the past three years of trading.

The evidence of profitability provided is not conclusive. There are two statements which are said to be "live" but have absolutely no investor access confirmation. Why wouldn't the author provide investor access or load the statements into myfxbook for investor access confirmation ? In my mind it seems that these statements are more the product of demo testing than live testing, proof of this seem to be the account numbers which have the length of demo and not live accounts for FXCM (however if this is not true I'll be glad to correct it when investor access is provided). The fact that the initial balance for the accounts is large (100K) also points out that the accounts may more likely be demo than live accounts. There is also the possibility that the statements have been made up since there is simply no verification available.

The trading statements are also very limited with only 1 or 2 months of trading results and no live updating ability (that I could tell). The average risk to reward ratio seems to be favorable (about 1:2) but there are some things within the statement that I don't fully understand such as the placement of orders with double lot size somthing which doesn't seem to be a Martingale strategy but the result of some other money management tactic given the fact that the amount of money is not doubled after loses but two limit orders with different lot sizes seem to be placed everytime.

I have to say that there is no evidence at all to backup the figures of profitability for past years given and even more, there is no evidence to say that the EA has been trading on live accounts or that it can achieve those targets in the long term. There are no investor access confirmed live accounts or 10 year backtests so that a full long term profitability analysis with back/live testing consistency analysis can be carried out. For this overwhelming lack of any reliable evidence I have to consider this system NOT worth buying and testing. Once live-update investor-access confirmed live accounts are added and 6 months of results can be compared with a 6 month period backtest with a 10 year backtest also available I will redo this review. In the meantime I think that the forex lightning system has no evidence to be called profitable and running it would be a pure bet with no true idea about the system's potential for long term profitability.

If you would like to learn more about automated trading and how you too can learn to trade with sound trading tactics 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 !

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