The time has come to shut down the bulk of my Automated Forex Trading operations. As you know this blog was created to chronicle my experience with Automated Forex trading through the Meta-Trader platform. After nearly 4 years, 263 blog posts, and countless hours spent coding, testing and analyzing Automated Forex Trading systems, its finally time to throw in the towel.
I suppose this post is a long time coming, but I wasn't quite ready to admit defeat. After all, I have wiped out in Forex before, once with FXCM in 2007, then with Zulutrade in 2009 as chronicled on my prior blog ZuluTrade News and Views. So this effort would be my third failed attempt to trade Forex and (as the saying goes) 3 strikes and you are out!
Early on in my journey, I met Daniel Fernandez from Asirikuy.com through is blog Mechanical Forex. Immediately I was intrigued by the science, the hard work and the degree of rigor Daniel put into his work. And it seemed entirely logical and responsible to believe that a trading strategy that worked with a good degree of consistency for the past 10 years would continue to work into the future. After all, the proof was in the back-tester report, how can you argue with 10+ years of back test history?
So I went forward with a full degree of energy and enthusiasm and even created a 5-year plan for my Automated Trading career as found in my post Forex Trading - My 5 year plan.
So how did it go?
After a year a planning and preparation in 2010, I really went full guns in January of 2011. Immediately things went well and I came out of the gate strong in January 2011. In my Atinalla No1 account, I gained a stunning 18% for the month of January and ended 2011 with a solid gain of about 16.78% for the year as reported in my post Meta-Trader - 2011 Wrap-up.
2012 was a rough year with my results chronicled in my post Forex Trading - 2012 Wrap-up. As per my plan, I doubled my investment from 10K to 20K at the start of 2012, and ended up losing 26% for the year. This was a setback and I ended up closing 2 of my 6 accounts with about -$2000 of realized losses. I went forward into 2013 with the 4 accounts and about 11K under management you see in the graph above.
2013 has been another rough year so far and I am down another 20% taking my total assets under management to just under $9000. Most depressing is that my Atinalla No 1 account, one which still had a solid profit from the start ended up giving back its profits and grinding down to just about break even from the start as shown in the above graph.
Strictly financially speaking, it wasn't that much of a disaster since I kept my accounts to a small percentage of my total assets. All told, I lost about -$5600 or about 25% of the total of 20K which I had invested at one time. That includes the money I made in 2011 minus losses in 2012 and year-to-date losses in 2013.
To be completely fair to Daniel, he never promised riches in the area of Automated Trading. The supposition of profit was something that I brought to the table. He instead promised an education and understanding in the area of Automated Trading.
But Daniel himself seems to changed his opinion of Automated Trading in his recent post Long term profitable back-testing: No guarantee of future profitability. This post seems antithetical to the very point of Asirikuy. Automated Forex Trading may be fun, but if it doesn't make any money, we can think of better things to do with our free time.
As for the fundamental reasons the systems failed, evidence seems to show period of bad performance for automated trading as shown by the Barclays Systematic Traders Index. Perhaps is because of the distortions created by the extraordinary period of monetary easing being done by the US Central Bank as well as other Central banks around the globe.
As for Asirikuy I have canceled by membership. I don't have any I'll feeling toward Daniel and on the contrary, I hold in him high regard and consider him to be a friend. But as for trading, he doesn't seem to have found profitability and all traders struggle on the path to profitability. Its as much a matter of finding out what doesn't work as what does. And (for me anyway) Automated Forex Trading hasn't only lost me money.
My plan going forward is to shut down the Atipaq Full Portfolio and Atinalla No 3 accounts and fund a new account with the Think or Swim platform. More to come on that and enjoy your weekend.