Meta-Trader - Watukushay Back-Test results

Welcome back Forex Fans.

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->

http://www.myfxbook.com/members/danielfppps/watukushay-fe/11962

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!