I was going through some Forex marketing material and saw this graphic and just had to use it for a blog post.
Why is it we all spend so much time looking for the Holy Grail in Forex. Is it a lost cause? Does it even exist?
I suppose it depends on your definition of the Grail. For me The Holy Grail is a system that makes 30% to 60% per year on average with no more than 25% to 30% drawdown - or loss of equity from peak to trough. Is that possible? Absolutely!
In my quest, I've come across a new system that I will call "System Q". This EA seems to fit the bill with these key characteristics:
- Regular, Active Daily trading of EUR/USD on M5 timeframe
- Reasonable Take Profit and Stop loss values about 20 pips on average
- Trades during active hours, not just during Asian Scalper times when spreads are widenened
- No Martingales - trades fixed lot sizes which grow or shrink with account size
- Excellent Year to Date back-test results (+121% with -15% Max DD)
- Excellent 7-Year back-test results (Avg +181% with Avg -21% Max DD). Robot would not test prior to 2003.
Also, i've run a 2-week forward demo test with results here System Q1. The vendor also sells an GBP/USD M5 system that has a lower returns and higher risk, so I took a pass on that. They also just recently started selling a AUD/USD system which I have yet to evaluate.
So I will be following this system going forward with an eye toward going live shortly. Also, I will reveal the names of the system to anyone who joins my Yahoo group. Just send a private message at http://twitter.com/tcxmon.
Next, my good buddy Daniel Fernandez has made some excellent strides recently over at Asirikuy. I've started tracking the Atinalla #1 portfolio which deserves a post in itself which I hope to get to later this weekend. Also, DF is in the process of unveiling Watukushay #5 which looks to be the most promising of all his systems.
Granted, DF's system provide an entire level of back/live testing consistency, full revealing of logic, source code disclosure (etc, etc) which make comparison of his systems an Apples and Oranges exercise versus commercial EA's such as System Q.
Finally, live trading this past week was such a non-event, its hardly worth discussing. The Megadroids and Scalper X's barely traded, and appear to be almost completely invalidated by spread-widening. Scalper X lost 2.5% on Monday, then recovered about 0.6% of that loss to end up down about 1.9% on the week.
Overall, i'm still in decent shape on my live and demo accounts. I'm kind of haunted by the fact that both accounts seem to have been capped at 20%. Since I know the brokers trade against me, I wonder if they will allow any of my accounts to make more than 20% on the year.
Can they widen the spreads with System X even during regular market hours? Will the brokers widen the spreads for me specifically and not the rest of the their customers? I don't doubt they are capable of that and who knows what else.
Check back later in the weekend for a post on Atinalla #1 and enjoy your weekend.