Monday, May 17, 2010

Forex Expert Advisors : Forex Machine Gun, an Unbiased Review

Today I will be revieweing the last of the expert advisors which were released during the past month. This trading system - called forex machine gun - makes some very interesting claims about consistent profitability, controlled risk, normalized returns and non-indicator based trading. During the following paragraphs you will be able to read my review about this trading system starting with a careful analysis of the evidence provided by the authors and the trading tactics used by the system. After carefully looking at all the evidence I will also tell you my views about the like hood of long term profitability for this strategy and whether or not - in my opinion - this system is worth buying and testing.

The Forex Machine Gun has the world Martingale all over its website something which made me thing - in the beginning - that this would be another crappy Martingale system that has absolutely no chance of being profitable in the long term. Then I found out that what they meant was actually a different Martingale tactic called anti-Martingale which increments lot sizes with profitable and not with unprofitable trades. Of course, the anti-Martingale tactic is quiet unusual since it is not very effective for most trading techniques due to the fact that the tactic needs to have considerable streaks of consecutive loses to be successful.

So I was excited to see what evidence the guys at Forex Machine Guy could show to actually back up their claims of profitability based on an anti-Martingale tactic. What I saw was - sadly and not surprisingly - a lot of unreliable evidence. The only thing available on the website to actually say anything about the systems profitability is a video of a backtest shown which lets us see the anti-Martingale tactic in action and the profits it generates on simulations. The problem is mainly that the simulations are carried over the 1 minute time frame so actually results are completely USELESS. When simulations are run on the 1 minute time frame, interpolation errors make 80% of any entries and exits most likely flawed reason why profitability is most likely grossly overestimated and the trading systems simply will perform very differently in live trading.

The use of a lower time frame also suggests that very tight SL and TP values are being chosen, something that also makes the presence of live execution variables - such as spread widening, requotes, off-quotes, etc- of vital importance to address the true profitability of the system. The guys that made Forex Machine Gun don't show any investor-access live updated results, reason why there is simply no way to know if the system trades as it is said on the backtests. There is also an absence of ten year backtesting resutls (which would be worthless either way due to interpolation errors).

So the fact is that to proof that the forex machine gun has any like hood of being long term profitable we would need at least 5 years of investor-access verified live testing results that showed the system trading live, under real execution parameters. The fact that simulations simply CANNOT be accurate for this system forces us to take a long live evaluation approach instead of the usual backtesting and live/back testing consistency path (which although extremely easy NO commercial EA sellers ever take for some reason).

Due to the fact that the system does not have any reliable proof of profitability and due to the fact that no live testing evidence is shown I consider the Forex Machine Gun trading system NOT worth buying or testing. If the creators show 5 years of live testing results using an investor-access verified account I would be glad to redo this review and recommend the trading system.

If you would like to learn more about automated trading and how you too can develop systems that give accurate simulations and have a high chance of achieving long term profitability in forex trading 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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