Welcome back, Forex fans.The Forex Robot's world cup, sponsored by FXCM, wrapped up this past Friday. My buddy Redford did such a good write-up, I'm going to re-post his comments to my recent post.
Redford said...
"The Forex Robot World Cup ended on Friday, and the results are out-
http://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 minuscule 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." (end quote)
Will be interesting to see the long term results of these systems. 2 months is not much of a time-frame to get an idea of the long-term performance of these systems. The fact that they started out with 329 submissions, ended up testing 24 robots indicates they have pretty tight entry criteria.
Keep in mind that there's a bit of selection bias here. Since FXCM is trading these accounts with real money, its in there interest to trade a small number of systems.
The more I think about it, this whole thing is an effort by FXCM to grab the tail of the tiger of the industry which has become Automated Forex Trading - a game which they have been largely deal out of thus far. We know they are a very recent entry into the game with their partnership with Boston Technologies. So they are putting this whole program together in an attempt to reset the agenda of automated forex trading industry.
Redford said...
"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."
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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." (end quote)
Again, interesting stuff. I think FXCM rejected the entire existing universe of commercial EA's because it wasn't their product and they couldn't make any money from it. It doesn't mean there are no good commercial EA's. It just means there are no good commercial EA's that FXCM could make money out of.
I don't know about their assertion that 99% of commercial EA's are no good. But I definitely agree that out of 100's or 1000's of EA's there are only a handful worth trading. And its our job as EA consumers to separate the wheat from the chaff so to speak.
Anyway, the drama continues, and a limited quantity of these robots go on sale in about 15 days. What the quanties are, and how much they cost is the next subject of speculation. This is all great stuff, but just keep in mind that FXCM is going to great lengths here to be sure that - if you're going to give your money to anyone in automated forex trading - its going to be them!
Cheers and let us know what you think of the Forex Robot World Cup competition!
Hey Chris,
ReplyDeleteI had a question I wanted to ask you and anyone reading that may have run into this using MT4.
Today, unfortunately, my method on the GPB/USD finally had a failure after 3 months. The problem I ran into was once the trade stopped out, for some reason a reverse position kicked in as soon as my current position closed. I found this confusing as my EA does not look to do this behavior. All it does right now is place the order... no order checking, modifying or, etc.
My thoughts are the possible problem is either in my code when I place the order (some sort of reverse order flag), or there is some application setting with my demo account that will automatically do this. I had an earlier position that was successful with the AUD/CAD that did not have any such behavior so it has something to do with a stop and reverse.
If anyone has any insight to this issue please let me know. Otherwise I am going to have to do some digging.
I think I may have figured it out sitting here at work. It just hit me. Yesterday I was playing around with a new chart for GPB/USD on the 1 hour. I loaded my template, which has my EA on it, I think the EA was running. I am suppose to run this EA on the Daily only. I think it entered a trade from the 1H chart I left open. (silly me). To confirm I looked at NetDania's chart to see if the 1H corresponded to my entry position, and it does.
ReplyDeleteI suppose I got confused because the odd rarity that I would stop out and then get back in within 2 seconds. Sorry for the comment.
JT
Thanks for posting on my blog Chris.
ReplyDeleteSeems like lately I have two different sides writing comments on my blog. On the one hand I have some new company "I won't mention here" which is trying to drive my visitors to their site in hopes to gain some business by offering more in depth evaluation tools for Zulutrade. (Believe it or not, I thought of this idea a few months ago, though I probably would not have charged for it. Came to me when you started your Data Base)
Then on the other hand I have people commenting in a bit of a negative fashion about Zulutrade. Though it may just be the same person upset about the same old signal providers.
I'm waiting for some sort of Zulu war to break out :)
It would appear that blogging about Zulutrade may be coming to a close for me at any rate. I only have two signal providers that are even qualified to follow, and I can't for the life of me find any new ones to add now that I know exactly what to look for.
I actually want to try and create a really good EA and maybe someday submit it to the Forex Robot World Cup. I think that would be fun. On another note, I wonder how much they would charge for the EA that took 2nd place. I really liked the chart they showed me in the video I watched. 1st place was a bit erratic for me even though it made better gains. I suppose I should try to get more comfortable with that type of trading. I've been thinking that, say loosing 4 trades at 20 pips then having that one trade that makes 160 pips is a strategy that many use successfully.
JT-
ReplyDeleteThanks for the comment. Zulu has been a disaster for us all and i'm glad to have put it behind me. But I made some good friends in the process and as a result I now appear to be on the road to profitability in the forex market.
Writing EA's is a big challenge, but I agree its fun and the fact that you can exercise them back and forth before risking any real money is what makes it such a great way to go. The fact that i'm a programmer helps also.
In terms of the FWRC, we are still waiting to see what they are going to charge for those robots. Also, 2 months is not much of a test period, but I have to believe a good back test was one of the entrance criteria.
I admit i'm still in the dark in terms of how much of a return is really possible with Forex. I know 1% a week is doable, but LMD Multi-Currency made 160% in 2 months! That's about 60% per month which is pretty unbeleivable. I would like to see what the 10-year test results and drawdown numbers look like. Because who cares if you can make 60% in a month if you are just going to give it all back a month later?
Anyway, thanks for the comment and words of support,
Chris
That is probably why I am only interested in 2nd place. 1st and 2nd place charts look very different. 2nd place looks more consistent and stable. 1st place is a bit too erratic of movement.
ReplyDeleteBut like you said, it was only two months forward live testing.
I should read the rules as I would like to know how far they back tested.
At this point I would even be happy to make 2% a month.
JT
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