Friday, April 30, 2010
Megadroid Live came back with a vengenance and picked up 3% on the week in 2 trades on Wednesday. After last week's loss, the droid is now in "Recovery Mode" and trading 2x the normal lot size until it gets back to a new equity high. This makes it more vulnerable to further drawdown until it gets back to a new equity high which is up about another percent and a half or so. As of today MD live is up 6.9% year to date.
Strangely enough Megadroid demo only traded once this week, and it wasn't on Wednesday. Instead it traded on Thursday and took its standard 10-pip take profit. This was a rare case when Megadroid live outperformed Megadroid demo. Its hard explain why the data feeds between brokers could be so different as to trade one day and not the other - and vice versa. Not hard to explain the realm of computer science, but curious to see in the real world. Anyway MD Demo continues to lead the pack up 17.25% year to date.
God's Gift EUR/USD dropped 61 pips drawing down from a recent equity high and remains up 7.3% for year.
God's Gift GBP/USD picked up 24 pips and is now off its back and back into ring and is up 3.1% for the year.
Overall its good to see all the systems positive for the year which will help build up some equity cushion to cover the inevitiable drawdown to come.
I have some cool material lined up for a post on indicators in Meta-Trader, so check back later for that.
Sunday, April 25, 2010
In this post, let's review the back-test results of the Watukushay for Everyone Expert Advistor available for free here: http://watukushayfe.blogspot.com/.
This system is authored by Daniel Fernandez who runs a Forex trading blog over at http://fxreviews.blogspot.com/. Daniel is a prolific developer of Expert Advisors and is essentially a full-time system developer, blogger, web site manager and advocate for honest review and appraisal of automated forex trading systems. Daniel is also the author of the God's Gift EA's which I have been forward testing since the start of 2010.
There is a tendency to dismiss Daniel's stuff because its free - or at least very low cost. Also, the returns offered by his systems are much less spectacular than commercial EA's but (unlike many commercial EA's) have some chance of consistent results between back testing and trading forward in live and demo accounts. That's because Daniel designs his systems according to a strict set of criteria to ensure some consistency between demo and live trading results. For more information, go ahead and purchase his e-book which costs about $20 USD and includes his accumulated wisdom and a few EA's.
Anyway, the graphic in the top left shows my results for a 10-year back testing with a Risk setting of 5. I came upon a setting of 5 after finding the default setting (1) provided very low profit and low risk. To get more profit, but keep the total drawdown under 25%, I upped the risk settings to 5.
Based on my back-test, the system is having a solid performance in 2010 and is up almost 7% with a total drawdown just under 5% range. Over a 10-year period, the system had 2 losing years, but the losses were relatively small. The average 10-year profit was about 11% with an average drawdown of just slightly less than that. This puts it overall profit to drawdown ratio of close to 1.
I'm not satisfied with my backtest results since they don't seem to agree with Daniel's own results. I was expecting them to be a better than God's Gift ATR which had an average profit to drawdown ratio of 1.23. On the Watukushay site, Daniel references a gain to drawdown ratio more in the 1.4 range. I spend several hours testing difference account sizes (100K, 10K, 1K) unable to reproduce these results.
I also downloaded the Alpari US platform after a post by Daniel indicating that Alpari is the only broker that can be trusted for downloaded data. I was confused by a reference on the WFE site to a variable indicating whether the account is Mini or Full-sized since I couldn't find that in the properties if the EA. Also, the results from the Alpari site left me further confused since they showed losses year to date.
Once thing we can all agree on are the live results from Daniel's MyFxBook site for this EA which can be found here->
As best as I can tell, the EA is up about slightly over 3% year to date based on results from a live trading. And a positive return is always a good thing in a market as trecherous as FX.
To summarize, Daniel's systems are the result a lot of study and testing and I continue to be intrigued by whether they can outperform commercial EA's that cost many times more. How will it work out? Stay tuned, keep reading and we'll find out!
Saturday, April 24, 2010
Welcome back Forex Fans.
Here's my weekly update on the Forex robot's i'm following.
God's Gift EUR/USD was the star of the week and pulled in as many as 156 pips through Thursday before giving back 70 on Friday. Even so, it was up a respectable 56 pips on the week.
Megadroid was on the wrong side of the trade this week and went long EUR/USD at 1.3294 in the demo account on Thursday. This same trade did not execute in the live account due to the spread widening. That trade got stopped out down 42 pips.
But not long after that, Megadroid went long EUR/USD again, this time at 1.3271, and this trade executed in both accounts. This trade quickly went the wrong way and was down as much as 80 pips. I closed out that trade manually in the live acount down about -51 pips and felt good at the time bypassing about 30 more pips of downside. However the trade slowly came back and the demo account ended up closing the trade out many hours later +1 pip.
So the net result is a dodged a bullet on the first trade, but took my lumps on the second one. The mistake I made was closing the trade manually. Had I not done that, I would have gained one pip, but instead, I ended up loosing 51 pips which was about half of year to date gain. Trading manually against your own EA is a mistake and it cost me. I won't be making that same mistake again.
Also, this is a reminder that Megadroid trades 2 strategies. The first one is a short-term scalper with trades limited to 2 about 2-3 hours with a 41-pip stop loss. The second strategy has a longer time frame and larger stop loss. Either way, you have to trust the EA to execute its strategy and don't mess with it manually!
Check back later for more fun with EA's.
Saturday, April 17, 2010
Here's a weekly update on Forex Robots I'm following.
Megadroid finally came out of its spring slumber and made some trades this week. Megadroid demo picked up 19 pips in 2 trades and continues to lead the pack up 20.5% year to date.
The graph above shows the performance of Megadroid demo which is up 236 pips in 37 trades with only one loosing trade. That's a pretty impressive performance and not bad for a 'set and forget' robot. I don't know of another commercial EA with as high a win rate and so little drawdown. If anyone knows of a better one, please leave a comment.
Megadroid live continues to lag and picked up 8 pips on the week. Even so, it's up a respectable 8.4% for the year. It took the same trade as Megadroid demo on Monday and picked up one less pip. On Tuesday, a new wrinkle came in when I saw this on the Experts tab:
17:00:08 stdlib EURUSDFXF,H1: loaded successfully
17:00:08 MegaDroid EURUSDFXF,H1: Sell operation failed - error(133): trade is disabled
17:00:08 MegaDroid EURUSDFXF,H1: Sell operation failed - error(133): trade is disabled
17:00:20 MegaDroid EURUSDFXF,H1: Sell operation failed - error(133): trade is disabled
17:00:25 MegaDroid EURUSDFXF,H1: Sell operation failed - error(133): trade is disabled
17:00:29 MegaDroid EURUSDFXF,H1: Sell operation failed - error(133): trade is disabled
I Googled the error(133) and here's the explanation: "your broker forbid trading operations by expert advisor". In other words, the broker just plain old denied the trade. Just when I saw it all - another broker dirty trick!
I did some research on the brokers recommended by Megadroid support and landed up on http://www.iamfx.com/. I had a chat with them and here's the deal:
- Lowest spreads in the business - 1 pip or less for EUR/USD
- Free VPS to execute your trades with a deposit as little as $500
- Based in the United States
So what's the downside?
- You have to pay commission. Don't quote me, but I had a chat with their support and I beleive they said commissions are $2.50 per 100K lot, $1.00 per 10K lot and 50 cents for a 1K lot.
- The minimum lot size they will trade is 0.05 lots with a micro account
- Broker is based in the US so leverage is limited to 100 to 1.
So is it worth it? Well i'm currently paying a 2-pip spread to Forex.com with no commissions. So with a 2-pip spread on a micro account (dime pips) with 0.10 trade size, i'm paying an extra buck on each of the trade in pip spread. To make matters worse, i'm missing out on a bunch of trades due to all the broker manipulation crap with Forex.com.
So I think I'm going to open an account with iamfx.com and see how it works out. If it trades Megadroid as well as the demo account, it will be well worth it. Plus, I can get some experience with a VPS and stop trading from the family computer in the basement.
Will it work out that way? We'll see.
Check back for my progress and have a great week.
Tuesday, April 13, 2010
Key content includes:
How to Build and Setup an Expert Advisor
How to Backtest and Optimize Strategies via MT4
Black Box Trading via MT4
MetaTrader 5: What it is and How to get Ready
Its interesting how FXCM is embracing MT4, but at the same time don't want to lose the investment in their own FXCM Trading Station platform.
Oh how I would like to attend in person, but family obligations prevail.
Monday, April 12, 2010
When programming EA's, beware of doing anything based on Bar[zero].
Its a tempting trap to fall into because many on-screen indicators use Close[zero]. In retrospect, those signals look great because they sometimes seem to catch bar highs and bars lows that were amazingly accurate. The only value that is safe to use is Open[Zero] which is pretty unlikely to change once it prints.
But in reality, those indicators were painted using hindsight and the value of the indicator can't be trusted until the current bar is fully formed and is now one bar old. The net result is you are chasing indicators and taking signals before bar is fully formed. Refresh the chart a few hours later and you will find that the signals you were acting on have disappeared based on the new, updated close of the bar!
An even more extreme case of the pitfalls of acting on bar zero are shown in the graph above. The EA takes an entry signal based on intra-bar data. Then the EA takes an exit signal based on intra-bar data. Repeat this several times and the EA has now chewed up 10% of the equity in your account with a bunch of silly non-sensical trades. Good thing this is a demo account.
Also, beware of any EA that takes multiple entry signals within a current bar. I know of one very expensive commercial EA that does just that. Sometimes all the trades work out and this EA picks up 5 quick profitable trades in a row and looks brilliant. Other times, the market goes the other way and you follow it right off the cliff.
One more pitfall avoided in the road to profitable trading.
Talk to y'all later.
Saturday, April 10, 2010
Things have been slow this past week in the land of the Forex robots. Megadroid demo took its first trade in almost 10 trading days and picked up 2 pips. That leaves Megadroid leader of the demo pack up 18.3% year to date.
Next up is God's Gift EUR/USD which didn't trade this past week, but remains up 14.3% for the year. After that comes Megadroid Live which hasn't traded since 3/24/2009 but remains up a respectable 7.77% for the year
Trailing the pack comes God's Gift GBP/USD which dropped 16 pips for the week and remains up 0.02% for the year. Before I get too negative, keep in mind that not trading is much better than loosing money and all the systems i've been following are positive year to date.
Getting back to Megadroid live, I got a reply from Megadroid support in terms of recommeded brokers, and here was their reply:
We suggest you to use such brokers as:
Alpari UK (http://www.alpari.co.uk/)
Alpari RU (http://alpari.ru/)
Since Forex.com continues to not trade Megadroid because of spread manipulation, the only way i'm going to make my 1% a week goal is to switch Megadroid brokers. One interesting tool to help along the path is MT4 Spreads at mt4spreads.com. This tool (which appears to work only during market hours) shows real-time spreads for multiple pairs across multiple brokers.
For a hint of what i'm working on, check out the graphic in the upper-left corner which shows a GBP/USD trading picked by an EA i'm working on. Its far from complete and clearly a work in progress.
Check back later and good trading all.
Friday, April 2, 2010
Well spring has finally arrived in North America. The sun is shining, the birds are chirping and earth is coming alive.
On the forex side of things, God's Gifts EUR/USD had a spectacular week, up 169 pips with 6 straight winners. This brings its performance to from slightly negative to up 14.3% percent in a mere 5 days.
God's Gift GBP/USD gave back 64-pips and is now up just 1.8% for the year. This action shows you the saw-tooth nature of the equity graph for this system. A mere 5 days ago, GBP/USD was the star and EUR/USD was the laggard. One week later and its the other way around!
Megadroid was quiet this week and did nothing in the live or demo accounts. I did a quick backtest to confirm and all was quiet there.
All was not quiet with the boys from Megadroid releasing StealPips. Watch out for that Web Site, because its got some pretty agressive sales techniques. If you buy that 'bot for $97, you get a bonus of Swissy Accu-Scalper and Forex Auto Scalper.
I haven't had time to get a look at these yet, and if the robots perform half as good as the results, it will be well worth it. I think I recall reading that one of them is a EUR/GBP scalper that trades twice a day on average is has 95% plus accuracy. Is that possible? We'll find out.
Check back later and Happy Spring.