Saturday, June 12, 2010

Meta-Trader - A Tale of 4 brokers

Welcome back Meta-Traders.

It was another solid week in the land of the Forex Robots. Also, I have some interesting results to share running my favorite scalping robot on some other brokers. But first, let's do the numbers.

God's Gift GBP/USD was the winner on the week picking up 28 pips in a scalper-like fashion. This robot is up 25.4% year to date. Its cousin God's Gift EUR/USD is up 11.6% for the year and picked up 11 pips on the week.

Next up was Megadroid Live which picked up 22 pips on the week and is now up over 20% on the year. Last up was Megadroid Demo which picked up 9 pips on the week and continues to lead the pack up 31.6% on the year.

The performance between Megadroid Live and Demo along with a few other observations have led to the conclusion that the performance of Megadroid is being limited by 3 items:

  • Spread widening which cases the 'droid to not trade at all
  • Wideness of the spread which causes trades to sometimes go into drawdown which would otherwise escape with a narrow profit
  • Error 133 which means the broker simply refuses the trade

To attack these problems, I setup 2 new Megadroid demo accounts, one with FXCM and IamFX. These are both 5-digit brokers with FXCM taking their cut out of the spread and IamFx charging a 50-cent per trade commission, but with a very narrow spread, sometimes less than one pip. Both brokers trade only in lots of 0.10, so I set the accounts up with $2000 each to keep it similar to what I would do in reality. I also set the risk to 0.05 so it would trade o.10 lot.

I hit pay dirt right away on Monday when both the FXCM and IamFX accounts took a quick 10-pip profit. Both 'bots then put on another EUR/USD sell and this one didn't go as well. What was interesting is that the IamFX account escaped with a 2 pip profit while the FXCM account ended up with a 50-pip loss! So in this case, paying a 50-cent commission made the difference between a $1.90 profit and a $50 loss. Is the 50 cent commission worth it? You bet it is!

I'm now tracking performance of the Megadroid on these 4 brokers and the chart in the upper left of the blog shows the performance each each broker in pips by day of the week. So far IamFX is clearly the winner and it will be interesting to watch this going forward. Also, this was a rare week when Forex.com live Megadroid outperformed my FXDD demo.

The fact that these brokers trade only in lots of 0.10 is a bit of a bummer since we loose the additional compounding caused by increasing trade size as the account grows. This problem goes is minimized with accounts of larger size.

Another interesting thing I learned is that on 5-digit brokers, 10 pips equals 1 pip with a 4-digit broker. So while Megadroid won't trade with a spread over 5 pips, that becomes 50-pips on a 5-digit broker. Megadroid adjusts for this automatically.

Another interesting item is that the Experts tab shows that Megadroid also did not trade at times due to too of wide a spread in the FXCM account. IamFX also widened the spread beyond 50 pips just at about 5PM EST (start of the Megadroid window) just to lower it a few minutes later.

One last observation was how different the trades and results were across the different brokers. I know that under the covers Megadroid uses an CCI and RSI with an 8-bar lookback on a 15-minute bars. Its hard to believe the values could be so different across 4 different brokers but the evidence is clear.

The overall conclusion is that the broker makes a huge difference in the performance of Megadroid. Also, when scaling up the trading to add more funds, it probably makes sense to run the Megadroid across multiple brokers to spread out the risk and increase the opportunity to trade.

That's all for now, check back later and have a fine weekend.

12 comments:

  1. Good Post Chris,

    You brought up a point in coding that I did not really consider yet. How do I detect if my broker only trades in mini lots? If I send it a lot value of say 0.27, I am guessing it would give me an error. So I would have to detect that my account is only trading mini lots and make an adjustment to 0.2 or 0.3.
    Anyway, I am interested in seeing the history of lamFX. If they keep from messing with EA's for only a fee of .50 cents I would use them in a second.
    I am starting to want to do a demo for the Gods Gift. I want to demo and get a feel for it, then possibly start a live account. If I know Daniel, I bet the EA could be run live on an account that has a few hundred dollars in it just fine. I wonder if I could run the demo on one account with both EUR/USD and GBP/USD at the same time... Probably can...
    Anyway, thanks for your update. I am pleased that you are doing well with Megadroid. Always nice to know your friends are making money and the years of losses are in the past and will stay in the past. :)

    JT

    ReplyDelete
  2. JT-

    Yes, I supposed the broker would throw an error if you tried to trade anything other than multiples of 0.10. I should try to figure that out before going live, because Megadroid will try to scale up as the account grows (trade 0.11, 0.12, etc) so I need to figure out what will happen in that case.

    Yes, God's Gift will work on an account with just a few hundred bucks. Just make sure the broker takes lots down to 0.01. So with a $300 account and risk setting of 0.10, it would trade 0.03 lots per trade.

    Sure you can put God's Gift EUR and GBP in the same account. Funny, I was just thinking the same thing earlier today. Daniel would probably advise against it since it might mess up the lot sizing algorithm and cause the whole account to see more risk than you might want.

    Take care and thanks for the comment

    ReplyDelete
  3. Hello Chris,

    Thank you very much for your update :o) I would however have to caution you about your current megadroid experiment since you are assuming that live execution and demo execution will be similar. Bear in mind that spreads are not the only important factor when dealing with a broker since liquidity plays a vital role, especially when dealing with scalpers. If you are really serious about getting the best from a scalper I would advice you to use a broker with second level market depth so that you can also get an idea about the liquidity levels available. FxOpen offers a very good ECN account option with this feature. Also it is VERY important to understand here that demo and live spread widening results are often NOT equal. So to sum it up, demo evaluations have very limited value when evaluating the effect of such live execution problems, especially when dealing with very sensitive systems like scalpers.

    Regarding the God's gift ATR on different accounts I would have to say that the ability to do this maintaining an independent balance for both instances is already available within Asirikuy's latest version of this EA (which also includes ECN support and a few more features). I haven't had the time to do a full ebook update yet (probably I will do it within the following few months) so I would advice you NOT to trade this EA in a mixed manner due to unpredictable money management effects.

    Remember that if you want to join Asirikuy as previous ebook customers you can join from 5.34 USD from the first month. You can send me an email and I'll be glad to send you the subscription links :o) I would also encourage you to go to the achievements and join pages in asirikuy to learn more about the website.

    Again, thank you very much for a good post Chris :o) Keep up the great work,

    Best Regards,

    Daniel

    ReplyDelete
  4. Oh, I also forgot to answer JT's question regarding capital requirements. You can trade the EA from 100 USD if your broker has a 10K per standard lot contract size. Such brokers include FxOpen, LiteFX, FXclearing and IBFX. On brokers with a 100K per standard lot contract size you will need to trade from 1K.

    Again, you can trade both the EUR/USD and GBP/USD instances on the same account only with the version in Asirikuy since the version within the ebook currently does not include the codes to handle different instances and separate money management. If you want to wait I will update the EA within the ebook during the next few months or you can join Asirikuy as I mentioned above.

    Thank you very much guys again for your interest in my experts :o)

    Best Regards,

    Daniel

    ReplyDelete
  5. Daniel-

    Very good point about the conclusions being drawn about the differences between demo and live trading. My assumption is that since IamFX charges a commission, the won't manipulate the spread as much or simply refuse the orders like Forex.com does.

    The point is that a narrower spread can make the difference between a winning and a loosing trade. But you are correct that you can't really tell what the affect will be until you start trading live with the broker.

    I'll check out the FxOpen ECN and see what that offers versus IamFX. Its hard to beleive that my 0.11 size order is going to have much impact on the market, but if 117 other people are trying to do the same trade at the same time, the affect could be considerable. Again, live trading is the only real test.

    Thanks again for the comments and information,

    Chris

    ReplyDelete
  6. I have read this blog it has full information and fully valutahandel Strategy about trading market.

    ReplyDelete
  7. Thank you for commenting! Really enjoyed reading your blog post here automated forex trading with tcxmon. This theory is very interesting. This one is especially interesting to me. I really did enjoy reading your blog. Keep it up.

    Trading Systems

    ReplyDelete
  8. I've proper selected to build a blog, which I hold been deficient to do for a during. Acknowledges for this inform, it's really serviceable! Pepperstone review 2019

    ReplyDelete
  9. The crypto area continues to be optimistic that in spite of the recent collision, prices will climb once again. One of those optimistic regarding the crypto market is Cardano CEO, Charles Hoskinson. In the recently, markets worldwide have crashed. Simply hours earlier, we announced that gold which was looking resilient and an ideal safe house for investors additionally collapsed. The current events have actually prompted the FED chairman to release a statement reassuring financiers of the stamina of the economy. Auto bitcoin bot

    ReplyDelete
  10. Hallmark examples of FinTech in our life are Mobile Payment applications, Cryptocurrency and Blockchain like Bitcoin and Gemini. In the future the series of FinTech solutions is anticipated to transform the marketplace a lot more with AI as well as artificial intelligence as well as will make FinTech products an essential part of our digitalized life.

    Bruc Bond executive Eyal Nachum

    ReplyDelete
  11. It is actually a great and helpful piece of info. I’m happy that you simply shared this helpful info with us. Please stay us up to date like this. Thank you for sharing.

    Clairvoyant Medium,
    Best Astrologer in Venezuela,
    Talk To Astrologer in Netherlands,
    Expert Astrologer in United Arab Emirates,
    Ask Expert Astrologer in Switzerland,

    ReplyDelete