Welcome back fans of the Forex.I'm coming to you today from lovely Skytop, PA in the heart of the Pennsylvania Poconos.
Here's a quick update on this week's action. My favorite robot - Forex Megadroid - did nothing nearly the entire week and finally sprung into action on Thursday evening at about 5PM EST. It pulled in 16 pips in 2 trades which was just over 1% of the account. This is consistent with my new "1 percent a week" mantra, and i'm perfectly happy with that.
The "God's Gift" robots from Daniel Fernandez swung between narrow gains and losses for the week and are both down marginally for the year. According to Daniel, this is perfectly normal behavior and the robots can have flat to downish performance for months on end, then suddenly make 70% of the account in equity in a single winning trade. This is a characteristic of trend following systems - they loose on the majority of trades, but make it all back on a single big winner. This makes the God's Gift robots much harder to trade psychologically.
We humans need regular encouragement, and that's why the 'Droid is much easier to trade, since it has about a 95% win rate. But with a handful of trades a week at best, it takes patience.
The other robot i'm following is a free evaluation from Forex PipZen that anyone can download and trial for free at http://forexpipzen.com/. This robot so far has 2 winners, although they relatively small. I've been running about 2 weeks now, and its up just under 1%. At $149 per year, I don't like it as much as the 'Droid. Many thanks to my good buddy Redford for the tip on this one.
So let's dip a bit deeper into the Megadroid to get some insight into how it works.
First of all, it trades only the EUR/USD pair on a one-hour timeframe. Once you get it loaded up in the right timeframe, the manual says that you can change the timeframe on the chart with no harm done. It very often gets in and out of trades in under an hour's time, so its pretty clear the analysis its doing has minimal relationship to the chart timeframe.
One of the most interesting things about the 'Droid is that it trades only Monday through Thursday in a 2 hour window - from about 5PM to about 7PM EST. Taking a look at the graphic below (courtesy of http://www.forexmarkethours.com/), this corresponds to the least busy time of the Forex trading day. At this point, New York, London and Toyko are in off-hours mode and the only active market is Sydney.
That's interesting since the web site where I got the graphic advises the exact opposite! The page advises to avoid trading unless the market is active, and all the big boys are at the trading desk. Megadroid take the opposite tact and only trades when the big boys are away.
I'm not sure what to make of this other than the fact that this the time slice of the day where markets are least subject to manipulation. It seems a bit counter-intuitive - you would think that the markets are more likely to be manipulated at lower volume times. But according to the logic of the 'Droid, its the other way around. When all the daylight traders are away from the desk, that's when markets are most likely to follow their natural up and down rhythms.
One reassuring thing about the 'Droid is that I can go to sleep Sunday evening and not wake up to a loss Monday morning (as so often happened with Zulu). Also, I can go into Friday and not have to worry about being blown up by the Non-Farm Payroll report which comes out at 8:30 AM EST and is the 800-pound gorilla of news releases in the forex market.
I suppose there are some other good reasons for trading in the 5-7PM EST timeframe (lack of news releases affecting EUR/USD?) but I suppose the point has been made.
I've a few more interesting observations about the 'Driod, but i'll save those for next time. Good luck and good trading,
Chris
Seems like a pretty dull EA, Tcxmon. They've had it running at the FPA (Forex Peace Army) and it's had 39 trades in about 7 months...just about 1.2 trades a week or so. The account is up 10% in that time. But you're right: it's slow and steady and you don't expect any real disasters overnight, or anytime it seems. What would happen if you geared up the risk level?
ReplyDeleteI've got a semi-automated EA, based on a famous system, which you might like to convert to an automated EA if you're up to it. Signals are provided and dots and markings are lined up on the charts but you've got to make the trade manually. But it's clearly a candidate for automation with a few minor rule changes. Shoot me a PM and I will give you more detail. This was really does have serious money making potential. I bought the system and the copywrite is freely given so we can do whatever we want with it.
As for other EA's, I've had the Donchian Scalper from funyoo running in demo, and it pretty much has worn out it's welcome, even though it had spectacular back testing. I've also had Aeron Forex Autotrader running, and this past week has been brutal to Aeron. I've removed both EA's since they have failed badly. And PipZen, bleh, not keen about it either.
The latest great hope is the Range Breaker!
http://www.fxrangebreaker.com/
Now this is based on price action to a great extent, and that's what I like about it. I may buy it and try it, it has an iron-clad money back guarantee. A little pricey, but I'm happy to pay up for something that works and is based on market action rather than indicators.
Redford-
ReplyDeleteI'm doing 0.l (10%) on the risk level and the Droid has made better than 5% in one month. That doesn't explain why is has made only 10% for the ForexpeaceArmy folks in 7 months. Maybe they are using a variable spread broker like FXCM and that's making it avoid most of the trades.
Sure its dull I agree but i'm so scarred after my Zulu experience, that slow, steady and profitable feels pretty darn good.
The other thing is that i'm not trying to make a living from Forex, just build wealth. If I was trying to make a living, I might feel differently and be looking for more like 3-4% a week.
Anyway, I should backtest the Droid with a risk level of 30% and see what that shows.
I'll shoot you an e-mail about the semi-automated system.
The rangebreaker looks like it could be a winner. I appreciate the lack of hype on the web page. It seems fairly new on the scene and I would like to see some independent results from driven2success or someone else before I spring. Agreed the price is not an issue if it can really crank out 200% a year on any kind of regular basis. I ran it through my compounder, and that's about 2.25% a week.
Thank for reading and talk later,
Chris
Hey, glad to see you are pulling in some %'s. I know what you mean when you say slow and steady feels good. I have done some tweaking with Tiger Tail. Thought I would work on that as that was my possible money maker. I managed to do some trade risk analysis and come up with a couple of good tweaks that may make things a little more profitable. I have been thinking about doing a post about dynamic trade risk analysis. Still not happy with anything back tested before 2005 for Tiger Tail, but 4-5 years going forward is excellent. I am expecting more trades this week, so I will get to see my EA in more action.
ReplyDeleteIf you get range breaker let me know about the results. Megadroid has got my attention, and I can't wait to see where it takes Chris in 6 or more months.
The Forex Robot World Cup ended on Friday, and the results are out.
ReplyDeletehttp://www.forex-robot-world-cup.com/winners.php
LMD Multi-currency wins the $100k prize with a gain of 145% in two months; HiRider was second with a gain of 88%. But the real story is pips, where HiRider blew everyone away with 2,700 pips while LMD was only 573, and did it with miniscule drawdown. These top EA's will go on sale this week, very limited quantity.
There were hundreds of robots, including commercial robots in the first test, and only a handful made the cut. The organizers say that 99% of commercial EA's are complete crap, and that none would come remotely close to the winners in this competition.
Interesting to get the straight goods from an independent testing group. Confirms what most of us suspect but are afraid to confront. We live in hope that some $99 robot will somehow make us money. I'd rather spend $1,000 on the winner in that competition than buy 10 $99 crapola EA's.
Thought I would add some of the FAQs from the link above (World Cup). It is most illuminating. I mistakenly said that commercial EA's were permitted in the competition...apparently not.
ReplyDelete------------------------------
Will the FRWC robots be available for purchase?
Yes. After the two-month live (real money) trading phase ends on January 29th, 2010, we will be preparing the winning EAs for sale. We plan to allow a very limited number of copies of the top ranked competing robots to be available for purchase starting February 16th, 2010.
Why is it that you do not accept commercial robots (those being marketed on-line presently) into the competition?
Simply because we believe that 99% of Forex robots currently being marketed are out there because they sell well for those who market them, not because they are good robots.
As a Forex trader you have to separate truth from fantasy. The fantasy about most commercial, heavily marketed FX robots is that they perform as advertised by the OWNERS of the product. However, the reality is that very rarely does anyone make money from these robots.
The FRWC's objective is to allow EA developers to prove that their EA is the best without needing to rely on marketing gimmicks.
Why are the FRWC's EA qualification rules so demanding and tough?
Well... why not? Why would you expect less than this when it comes to a robot that handles your real, hard-earned money?
We are currently part-way through the first FRWC competition and, as you may already know, 329 robots were submitted during the submission phase.
From those 329 submitted robots, only 24 qualified. Yes, 24 - that is not a typo.
Why are the FRWC robots trading on live, real money accounts and not on demo accounts?
Simply because "forward testing" (the technical term used for this type of trading) is worthless when judging the performance of an EA. It is widely known and accepted in the industry that prices, spreads, spikes, fills, slippage, etc. is quite different on "real money" live accounts compared to demo accounts.
A robot can, and most of the time does, show a profitable equity curve on a demo account but later, when applied to a live account, the opposite happens.
How many Forex robots were submitted in the EA submission phase?
There were 329 EAs submitted from 63 countries.
Why are the winning FRWC Forex robots the best robots in the world?
Because of the "survival of the fittest" concept - plain and simple!
In every competition, no matter what it is for, the winner is the best and with competition qualification rules as tough as the FRWC's qualification rules, the quality of the winning robots is furthered magnified.
As a side note, this is a mistake many people make when comparing commercial robots available for purchase on the Internet with the FRWC robots. These commercially available robots, have been designed to make money for their owners by selling them - the fact remains that 99% of them do not work in practice. On the other hand, the FRWC robots have been designed by NON-COMMERCIAL developers with purely one thought in mind: real, long-term, high performance results on live, real money accounts.
Hey Everybody,
ReplyDeleteI've attached a list of the highest ranking forex brokers:
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