Forex Expert Advisors and Market Volatility , God's Gift

On an earlier post I had described the use of the ATR indicator as a means to control the stop loss and take profit values of forex expert advisors. I became very aware of this fact yesterday when I started to back test and optimize the God's Gift expert advisor using it's regular stop loss, take profit and trailing stop features.

I realized that the expert advisor made profits consistently using fixed stop loss and take profit values but starts to fail to do so at mid-late 2008. In forward testing this was confirmed as the expert made a good amount of profit from the beginning of 2008 up until the tests ended in mid October. After that, a live account was started to test the ea, account which has experienced more draw down than this same expert last year.

As you can see on the GBP/USD weekly charts displaying the ATR indicator, (shown below) volatility has increased expotentially during the past 6 months. This seems to be a consequence of market uncertainty and a general increase in volume across the forex market. Indeed, the market has been almost doubling it's trading volume every year.
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Now, expert advisors that use a set of fixed stop loss and take profit are bound to fail because they cannot adjust to these ever changing market conditions. As a matter of fact, market conditions can just be expressed as a measure of volatility since human psychology remains the same, the only thing that changes is volume (of course, on the long run, human psychology should change as we should be able to learn from our previous mistakes, etc).

What I discovered, in the case of God's Gift, is that there is a defined set of parameters that work well from 2004 to 2008 and a completely different set of parameters that works very well from mid 2008 to present. The main difference is that SL and TP values have to be widened enormously to take into account changing market volatility. This led me to program an ATR based stop and take profit on the God's Gift expert advisor, this of course, allowed me to find a set of conditions that worked perfectly from 2004 to present.

If you would like to learn more about the exact results obtained with God's Gift both in demo and life accounts as well as getting the new God's Gift with ATR adjustable SL and TP please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Free Profitable Expert Advisor, God's Gift 7c

For those of you who have not read previous posts about God's Gift, it is a free expert advisor coded by Matt Edmonds which I have been testing from January 2008. I stopped publishing results on this website since the ea is a very infrequent trader and it took it several months to accumulate a good amount of trades. Now I will show you my results for this free, profitable, expert advisor.

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As you can see on the graph, the ea has performed very well for the past 9 months as it has been predicted by it's backtesting. The expert has very good market entries. With about only one entry per week, this ea enters the market only on high probability trades. I have to say, I thought this ea would blow up the account by June but it has indeed surprised me by banking profits as expected. Up until now, the ea has a profit of about 50% with a maximum draw down not exceeding 10%. The ea uses a fixed stop loss and it seems to have a low risk trading style. This is the type of ea you would like to use for consistent, long term profits.

Even though the amount of time is significant (9 months) and enough to say this ea is extremely likely profitable (has survived drastic changes in market conditions), I have to tell you that, as with any automated trading system, you should trade it with care and at your own risk. If you wish to get the settings and the expert advisor from me you can either buy my automated trading ebook (which contains information about many commercial experts) , subscribe to my weekly newsletter (which comes with investor passwords for live and demo accounts) or simply buy me a cup of coffee using the link on left bottom side of my webpage and I'll be glad to send you this information to your email ! (this is to support the vps in which the ea is run and keep me awake :) ) Thanks in advance for your purchases and donations !

God's Gift EA, 2 months, finally ... A loss !

First of all let me apologize for the diminished amount of posts I have published for the past month. I have been very busy with other projects so I haven't taken much time to write articles, on the other hand, I don't have many experts to review as I currently have only 2 in forward testing.

Now to the God's Gift expert advisor results... I have to say, I like this expert advisor a little bit more every day that I see it trade. It caught twelve profitable trades in a row, over a little bit less than two months. It has shown great accuracy with it's trades, only risking a moderate amount of pips (70) on each trade.

The ea attained it's first loss yesterday when it hit a stoploss on the GBP/USD after taking a dramatically wrong sell order just before 5 consecutive positive hours for the pound. I have to say, I am in part relieved by the expert starting to take some loses, I really want to see if the expert can live up to it's back testing results and provide a maximum draw down smaller than 15%. Currently, maximum draw down is 3.9%.

Well, I will review this expert again the following month when I hope we will have a better idea on the amount of draw down. If it exceeds 15% I will stop the expert advisor, if it does not, I will continue forward testing it until it does or until we have 2 years of forward testing. Best luck to you all on your trading !

God's Gift Expert Advisor, One Good Month

I was very reluctant about writing a review on God's Gift right now. The reason is that the results up until now could be misleading to some people and could make them believe this is the holy grail. I will then try to tell you the results as objectively as I can ( cause I do feel a little bit of excitement myself about this ea) . As you know, I always try to have my opinions as unbiased as possible although there is always some bias coming from my own expectations on the experts (Impossible to evade as a human, I think).

For starters, this ea has had an amazing month. Never in the large amount of forward testing I have seen had I seen such a clean record. God's Gift has managed a perfect month. Absolutely no draw down, yet a hard stop and a trailing stop always in place. Eight wins in a row with an incredible capacity to pinpoint short term market direction.

I would say, I hate this ea because I have not seen it lose any money. When you are testing an ea you have to see it win and you have to see it lose. When you see this you know if your wins are much more than your loses or vise versa. Right now, I have absolutely no way to make this comparison. This, frankly, makes me a little nervous about the expert. I like experts than win and lose and consistently win more than they lose. An expert that always wins is impossible so I will just keep on watching until the losing streak comes.

According to back testing, this is something the expert does frequently. Has a large winning followed by a large losing streak. It is supposed to have a win to lose ratio of about 1:2 with 75% winners and 25% losers.

Needless to say, I am also impressed. It is incredible that an expert with a 70 pip stop loss and a 30 pip trailing stop can be this consistent. Not even one single losing trade. My emotions right now tempt me to try it on a real account. But time will tell, how much it wins or loses.

I will review this expert again in another month (due to it being a very slow trader), However, you can see the trading statement for the past month here. Remember that it took it almost two weeks to make the first trade !

God's Gift Expert Advisor, Week 2, First Trade !

The post I wrote about the God's Gift expert advisor got a lot of attention from my readers. Unfortunately I have not been able to publish any reviews about this ea due to the lack of trades. Apparently this expert advisor is a really infrequent trader, trading only every two or three weeks.

Today, after two weeks of forward testing, the ea finally decided to perform a trade on the GBP/USD. The expert advisor executed a buy order which resulted in a 98 dollar profit, which is about 1% of our balance. I like infrequent traders better than frequent ones, this because I always get the feeling that they aim for higher probability trades (but this is just a feeling it might or might not be the case).

It seems that due to the nature of this expert advisor, it makes no sense to review it every week, therefore I will do it every month so that we can accumulate a fair amount of trades before each post. I decided to host the trading statement here, if you which to see it. You can also see a chart displaying the indicators the ea uses as well as the only trade that has been made.

Gods Gift v 7c, A Free, Likely Profitable Expert Advisor

For the past two weeks I have searched relentlessly for a profitable free expert advisor to fill the void left by the free expert advisor portfolio I stopped trading.

As you may know, finding free profitable expert advisors is very difficult given the fact that they are many of them, with limited information on their workings and objective. At the end, I think I found a light at the end of the tunnel.

This expert advisor I found named Gods Gift v7c coded by Matt Edmonds seems to be the answer to my prayers. The way I discriminated this expert from the rest was by back testing. And yes, we all feel the same way about it (does not work very good, I know it) but it is nevertheless a tool to separate possibly profitable experts from unprofitable ones, not to say that every expert resulting profitable in back testing would be in forward testing.

The back testing results are very good. After optimizing some of the parameters associated with this expert, I managed to get, using Alpari data and 90% modelling quality, a maximum draw down below 10% with a relative draw down below 15%. All of this with a 50% yearly profit, back tested from December 2004 to January 2008. This I have to say, is exactly what I am looking for. The strategy tester report can be seen here.

The expert advisor finds its entries with the help of the Waddah Attar Explosion indicator coupled with Keltner Channels. You can see this in the image at the end of this post. The expert advisor seems to perform very well on the GBP/USD pair with the time frame making apparently no difference although the back testing report was done using the one hour time frame.

I like everything about this expert advisor. Fixed stop loss, trailing stop and apparently a low draw down with a modest profit on average each month. I have started to forward test it today and see how it does in the real market. Everything points out to this expert being profitable, let us hope it lives up to it's back testing results ! Wish me luck !