Meta-Trader - IamFX Live week one

Welcome back Meta-Traders.

As promised here's a report of my first week live trading with IamFX. I opened up a new account with $2000 and the plan was to trade Megadroid and Scalper X with 5% risk which is roughly equivalent to 10% risk on a $1000 account.

My thinking was that the narrow spreads would make up for the fact that they charge commission - about $1 per round trip on a 0.10 lot. Also, the abensce of spread widening would allow the system to take trades which would not execute on Forex.com. The results of my first week's trading can be found here.

The first thing I noticed is that the ScalperX opened up trades very quickly and readily - more so than the demo feed from IamFX. In fact, ScalperX traded every day Monday through Thursday while the same system on the demo account from IamFX only traded Wednesday and Thursday! Strange to see such a difference and it suggested the broker was somehow manipulating the feed to make the EA's trade. Recall they get paid a commission on each trade plus the spread.

I've been trading the scalpers for almost a year and I know their logic pretty well. One important feature is that if the take-profit is not hit within one hour after opening, the system will close the trade at any profit whatsoever. It will not take a small loss between 1 and 2 hours after opening. The stop loss will only kick in after the trade has been on for 4 hours or more.

Well with IamFX, the system was taking small losses! My only conclusion here is that the system was closing the trades when they were profitable, but I was seeing 3-4 pips of slippage on execution! This of course negates the commission and the whole benefit I was trying to acheive from going to this broker!

This affect was even more pronounced on Wednesday. See that $10.19 profit on Wednesday? That should have been a $20 profit that where the price literally slipped at 5 pips on execution. Also, the reverse trade that got taken immediately at close of the first trade trade close opened immediately with a -$10 loss! And that trade should have closed at a small profit per my explanation above instead resulted in a small loss!

Well after 3 days of trading, I was almost ready to throw in the towel. On Thursday though, things seemed different, and I saw spread widening at the 5 pm entry window, so the system didn't trade until almost 5:30 PM. These trades closed with decent profits, and was able to bring the trading into the positive for the week.

Megadroid did trade once during the week and took a -0.90 loss. The same trade made about 3 pips on the demo account and the demo account took a 15 pip-profit on a trade not taken on the live account.

Final score for the week with 1.3 full-size lots transacted is a profit of $14.13, commission paid $13.62. Observation conclusion is that executions on Forex.com are much better and even though the spreads are higher there's not much slippage on execution.

This all is a mute point anyway since this account is being moved over to CMS Forex as of next Friday. I thought was worth sharing anyway. Take care and stay tuned for some some robots setup and analysis from Asirikuy.

Meta-Trader - Slow and Steady

Welcome back Meta-Traders.

It was a fine week in the land of the Forex Robots. Much time was spent digesting the new rules which affect US-based traders starting after the close of business next Friday October 15th.

Here's how I'm going to be affected:

1) My 2 live Forex.com accounts will be moved back to the US. Forex.com has provided a link to their new, US-compliant Metatrader.

2) My brand new live account with IamFX will be closed and transferred over to CMS Forex under the new rules.

I'm still debating whether I should take the CMS Forex Transfer or just close the account and get my money back.

Its probably a good thing that i'm being forced to comply with the new rules so I don't have any ongoing regulatory risk on my path to wealth building in Forex. I don't expect the new rules will have any negative affect on my systems, although I'm still evaluating the Q-Diamond's. Now onto the week's results.

The Megadroid twins had a fine week with Megadroid Demo picking up about 1% and sister Megadroid Live picking up about 2% for the week. The Megadroid equity curve is a thing of beauty (see above) and is now up 28.4% on the year. This system has had 21 consecutive profitable trades with a 94% winning rate and a profit factor of 2.73. This robot has a pretty good chance of meeting my 30% to 60% yearly profitability goal by year end. I'm overdue for some drawdown, so we'll see how it works out.

Atinalla #1 had a pretty good week with a huge 170 pip winner, then gave back about half over the remaining 2 days. Even so, this system is up an impressive 11% since starting it back on 7/29/2010. Unfortunately, this system is not compliant with the new NFA rules, and Daniel Fernandez over at Asirikuy has already provided some alternatives. I'll do some work on that over the weekend have have the first week's results on the new system for next week's post.

The Q-Diamond twins had a solid week also with Q-Aussie picking up about 1.8% for the week and Q-Diamond EUR/USD picking up just over 2% for the week. I'm getting to know these systems better, and i'm still not %100 clear on whether they will be affected by the no-hedging rules.

I have an interresting story to tell about my first week live trading with the scalpers on my new IamFX account. Unfortunately, i'm out of time, so check back later in the weekend for that.

Get out and make it a great day!

Meta-Trader - Trader's Choice Webinar redux

Welcome back Meta-Traders.

The developments are coming fast and furious regarding the new Forex regulations due to take affect in the US starting on October 15th.

I spent some time this afternoon in a Webinar sponsored by my favorite referring broker Trader's Choice FX. The session lasted almost 2 hours, and there was lot of fluff, dead air and marketing. It was almost 25 minutes into the session before we got to any real content. So I'll save you guys the time and give you the executive summary. Here goes:

- The new regulation applies to all US Citizens residing in the US. If you are a US Citizen living outside the US, or a non-US Citizen living inside the US, you may not be subject to this regulation.

- All non-US-based FCM's which have an office or presence in the US which hold accounts for those who reside in the US are required to return their accounts to the US under the new rules.

- Safety and security of funds should be paramount in any decisions you make as to where to fund your account. For brokers based outside the US, or non NFA or CFTC based brokers inside the US, you are completely subject to the financial condition of the FCM. In other words, if the FCM goes under, you can loose all your money. Fine for a few grand, but don't be the farm on these brokers. So stick with large, well capitalized brokers.

- All the major FCM's handled by Trader's Choice (FXCM, Forex.com and FXDD) are all subject to the regulations and are all repatriating their accounts but all doing so differently.

- These regulations are not as bad as they sound. Traders who trade with high leverage (beyond 12:1) typically loose their accounts. The presenter challenged the audience to provide a brokerage statement for more than one year which shows successful trading of an account at this leverage level and nobody took him up that I'm aware of.

Now on to the good stuff. Here are the 3 options provided by Trader's Choice FX:

1) Open an account with Citi FX Pro. This was a bit of a shocker since this large US-based bank will allow you to trade with FIFO and Hedging, but subject to the 1:50 leverage. Strangely enough, Citi is not subject to CTFC or CFC regulations, and the accounts are FDIC insured up to the 250K limit. In my first hand experience, this is an abberation, and its just a matter of time before Senators Dodd and Frank get word of this loophole, so don't bank on it.

Also, Citi's minimum account size is 10K and they will not split accounts down further. That counts them out for me. Not that I can't swing 10 grand, but I'm not about to bet 10 grand on any single forex robot. Someday, but not now.

2) Open an account with Forex.com US. This is perhaps the least favorable option because they (just today) released their NFA-compliant version of Meta-Trader 4. On the plus side, this is a reputable and well-capitalize broker. On the down side, performance of non-US accounts may change when they are brought back under US rules.

3) Open an account with FXDD US. These guys have a bit of a leg up since they have had a MT4 version which meets US-rules in place for some time.

Trader's choice also indicated they will pay a 5% deposit bonus on any new account $250 or above. Also FXDD has a solid reputation with spreads as low as 2 pips on EUR/USD.

In summary, my major takeaway from the presentation is that these regulations are in place to protect you and your funds. There are very few profitable systems which are rendered ineffective by these regulations.

Take care folks and stay tuned for some interesting, first hand experience I got this week trading my new IamFX account live. Check back later for that...

Meta-Trader - Repatriation part two

Hi guys. Let's face it, most of you reading this blog are men and if i'm wrong and you are a female, leave me a comment and i'll stand corrected.

In any case, I heard from Forex.com this evening as follows. The only significant difference between them and FXCM was that Forex.com came out and said you are not required to transfer your account. And they provided a link to click on that opens a chat window to their sales people. Now that's what I call capitalism....

Important Account Notice - Changes to your account

Regarding your account: ***********

Dear Client,

On August 30, 2010, the U.S. Commodity Futures Trading Commission (CFTC) announced a new rule that prohibits foreign affiliates of US FCMs from acting as counterparty to US domiciled foreign exchange accounts.

Our records indicate you are a resident of the United States, which means you will no longer be able to conduct business with FOREX.com UK Limited after October 18, 2010.

In anticipation of this change, we will be changing the margin requirement on your account to 2% (50:1 leverage) for major currencies and 5% (20:1) for all others on Friday, October 8, 2010. View full list of currency pairs.

You can continue trading forex by transferring your MetaTrader account to FOREX.com US, a CFTC registered FCM/RFED and a member of the NFA (NFA #0339826). Upon transfer of your account, your funds will be held in a non-segregated account with FOREX.com US and your account will be governed by the rules and regulations of the CFTC.

We have made the transfer of your account as seamless as possible to ensure no interruption to your trading and your account details, User ID and Password will not change. Simply review and agree to the FOREX.com US customer agreement by 5:00 pm ET Thursday, October 14, 2010, and we will automatically transfer your MetaTrader account to FOREX.com US on Friday, October 15, 2010 at approximately 3:00 pm ET.

The MetaTrader platform offered by FOREX.com US adheres to NFA client trading rules and as such, hedging is not supported. We strongly encourage you to sign up for a demo account to familiarize yourself with the system and test your EA's prior to Friday, October 15, 2010 by clicking here.

You are not required to transfer your account. If you oppose the transfer of your account, please click here to discuss your options.

If you are unsure of how this change will impact your FOREX.com account or have any additional questions, please feel free to contact one of our customer service representatives.

Sincerely,
The Team at FOREX.com

Customer support seven days a week
24 hours a day from 3PM Sunday to 10PM Friday (GMT)
Saturdays 2PM to 10PM (GMT) Freephone: 0800 032 1948 (877.367.3946)
International: +44 (0) 20 7398 5030
Email: metatraderuk@forex.com


You are receiving this message because you have a FOREX.com account or registered for a practice account, event or newsletter. If you do not wish to receive future emails from FOREX.com, please click here.

Forex and other leveraged trading can involve significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary. Contracts for Difference (CFDs) are not available to US residents.

FOREX.com is a trading name of GAIN Capital - FOREX.com UK Limited and is authorised and regulated by the Financial Services Authority. FSA No. 190864.

9th Floor, 12 Camomile Street, London EC3A 7PT United Kingdom
Tel: +44 (0)207 398 5030 or 0800 032 1948 Email: ukinfo@forex.com
Copyright ©2010 FOREX.com UK. All Rights Reserved

Meta-Trader - Welcome Myfxbook

Welcome back forex fans.

With this week's post, i've converted all my account statements over to myfxbook.com. This platform has many nice enhancements not the least of which is that it continues to work since the other 2 publishers (mt4live.com and mt4stats.com) have gone under or failed to deliver due to capacity issues.

For a look at the new content, check out my flagship Megadroid live account here Megadroid Live. This account has the most history of all the accounts since the demo accounts expire every 3 months or so. Myfxbook allows a new demo account to be published to the same history as prior demos, so we should see more history going forward. Also, check out the nice looking equity curve on the Megadroid live - let's see how long it lasts!

In terms of robot's action, this week's winner was Q-Diamond EUR/USD which picked up about 4.7% on the week. This account is now down -2.7% from opening back in early August and has climbed back from an almost 30% drawdown! Sister account Q-Aussie also had a solid week and picked up about 2.7% on the week. Note how Q-Aussie picked up over 10% for the month which is consistent with back-testing.

Megadroid Live and Demo picked up a pip or 2 so not much to talk about there. My new account with IamFX is funded and ready to trade.

As I mentioned in the comment, Forex.com UK will be sending their UK-based accounts back to the US. The absence of hedging capability is offset by the fact that I get pip-rebates from Forex.com via Trader Choice FX. So i'm unclear on how this is all going to shake out since ideally I would like hedging and pip rebates.

That's all for now, get out and enjoy your Saturday!

Meta-Trader - US Repatriation of UK Accounts

Oh yea we got trouble, right here in river city.

FXCM has got a plan to repatriate their UK Accounts back to the US as of 10/18/2010, see below. No word yet from Forex.com UK.

Dear Client:

FXCM would like to inform you of important new legislation passed in the United States that will impact your forex trading account(s). The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act is a federal statute that states that overseas brokers not registered with the CFTC will not be able to be counterparties to US retail investors in OTC forex transactions after October 18, 2010.

What does this mean for your account? As you are a resident of the United States, FXCM LTD (FXCM UK), FXCM AU LTD (FXCM AU) or FXCM Asia Ltd. (FXCM Asia) can no longer be the counterparty for your forex transactions. However, so that you may continue trading, your account(s) are scheduled to be moved the weekend of October 15, 2010 to FXCM LLC (FXCM US). As a US resident having your account(s) with FXCM US will comply with this new rule.

How will my account(s) be affected?

Will my account move?

Yes, your account is scheduled to move the weekend of October 15,2010 to FXCM US.

Will I have the same username and password? Yes, you will keep the same username and password.

Will I have to download a new platform?

No you will not have to download a new platform.

Will my margin requirements change?

Yes, the maximum leverage available with FXCM US is 50:1 for major currency pairs and 20:1 for exotic currency pairs. (See the table below). For detailed examples on how margin will change and how to avoid a margin call, visit the online support center.

Will my open positions transfer? All open positions and orders will be transferred to FXCM US.

There is no need to close positions.

What will happen to my stops and limits? All stop and limit orders can remain open during this move.

There is no need to remove them.

Will I have hedging on FXCM US?

No, you will no longer be able to open new buy and sell positions on the same currency pair at the same time.

Will I have to do anything? FXCM will be providing continuous communication over the next few weeks and will outline if there is any further action needed on your part or any changes to this initial communication.

Will my deposit and withdrawal procedures change? You may continue to visit myfxcm.com to deposit and withdraw funds. Account holders in USD denominated accounts will now send their funds to Bank of America in the United States.

What protection will my account have under the new US regulations?

FXCM is registered with the Commodity Futures Trading Commission (CFTC) and is a member of the National Futures Association (NFA). If a dispute arises, investors can turn to the NFA or the CFTC. Please be aware that once your account has transferred to FXCM US, American (US) requirements and consumer protection rules will apply. The rules made by the UK’s Financial Services Authority to protect consumers will no longer apply; FSA consumer protection, bankruptcy protection, segregated accounts money rules. Any complaints you may have about activities up to the date of transfer will be dealt with under UK rules, thereafter under US.
For additional information, please read the Frequently Asked Questions on the DailyFX Forum. Visit Now

Q-Diamond Revealed!

Welcome back Meta-Traders.

After about 2 months of demo, back-testing and evaluation, I’m ready to reveal that System-Q is from http://www.qdiamondsystems.com/. I want to mention that I have no affiliate relationship with the vendor and my only interest here is sharing the results of my research with my blog readers.

The vendor sells 3 systems, Q-diamond 100 which trades the EUR/USD, Q-diamond FX II which trades GBP/USD and Q-Aussie FX which trades AUD/USD. All systems trade the given pair on a 5-minute chart. The vendor is currently asking $249 for the EUR/USD system, $179 for the GBP/USD system and $219 for the Aussie system. You can get a free one-month evaluation copy of any of the systems by visiting the vendor web site. Failing that, you can e-mail the vendor at qdiamond.ea@gmail.com. You also get a discount on the other systems after you pay full price for one of them.

The account statements on the vendor’s web page are misleading since they don’t show any drawdown whatsoever. The systems definitely will drawdown, more on that below.

What about performance? In back and forward testing, the EUR/USD and AUD/USD systems return about 6-12% per month. The systems are also capable of some nasty drawdown, and when things go bad, the system can drawdown about 30% in a very short time. Also, the systems are very spread sensitive, and in some back-tests with an accidentally high spread, the system lost and much as 80% on the AUD/USD and wiped an account on the EUR/USD. The system does have a spread protection feature, which when activated will not trade when the spread is wider than 5 pips.

You can setup the systems to run with a conservative, moderate or aggressive risk levels or anywhere in between as follows. The system will take up to a maximum of 5 positions and you set the size for each position. Since I like to start with a $1000 account, I set my starting lot size to 0.05 for moderate risk. Thus, the system will trade up to 0.25 of a full lot. The system can be long and short the same pair, so is not compliant with NFA rules.

A description of the system logic was provided by the vendor as follows. The EUR and AUD systems are trend followers which wait for a trend to develop then trade in the direction of the trend after a retracement. The default TP is 20 pips but can be larger in a more volatile market. If the price moves against the initial trade, another trade is put on in the same direction, and the TP and SL are adjusted to a single value making it “easier” to reach the TP. Under some circumstances, the system will close a losing trade and open a position in the other direction and follow the original logic.

In terms of stop losses, the system uses an SL of 135 pips. To calculate your drawdown, take the position size, times 5, times the 135 pips. In my case, max position size is 0.05 times 5 = 0.25 which comes to $2.50 per pip times 135 pips equals $337.5 or about 30% of my $1000 starting account size. The vendor estimates the system will draw down on average 1-2 times per year and recover in 3 months or less.

In my demo testing, I started trading Q-Diamond 100 back on 7/27/2010. It quickly gained 5% then went into drawdown, losing about 30% of its value. It has been climbing back since and as if this writing is down about is down about 6%. Q-Aussie is up 8% since starting it on August 31, 2010. I lost about a week of trading when the demo ran out, but is running again now.

One annoying thing about these EA’s is that when traded live, the compiled ex4 file must be coded and compiled to work against a specific account. You need to e-mail the account number to the vendor, and he will compile the EA and sent it back to you. This is going to make any updates to the system difficult to distribute. On a positive note, this along with the conservative marketing practices of the vendor will hopefully prevent the system from being over hyped and over used.

I’m a pretty conservative guy and normally I would not consider trading a system where I can lose 30% of my money in a short time. But these systems are such consistent money makers that some alternate tactics may be in order to succeed here. Here’s what I’m thinking.

Start with a small amount of money (say $1000 per account) and slowly decrease the risk as the account grows. Another tactic is to withdraw the profits and keep trading the original amount. Sure, you could lose the entire account in drawdown, but changes are pretty good that after a year or 2, you will have made the entire principle and then some.

The system will grow the lot size proportional to the equity through a variable called Growth Management which is set to True by default. Another tactic is to set Growth Management to False so the system will trade a smaller portion of the equity as the balance grows. Some of the back-tests (including one one shown in the graphic above) have GrowthManagement set to false and that option seems to provide the smoothest equity curves with risk greater in the early going and then slowly decrease risk as the account grows.

The vendor suggests trading all 3 systems on one account with default (moderate) settings. Under that scenario, the account should earn about 18% to 36% per month or about 1500% per year assuming no drawdown. When it does drawdown, the system should recover in about one month. That might be a little aggressive for my taste, but does have a decent chance of turning $1000 into $10,000 in one year’s time.

I uploaded a whole bunch of back-testing statements to my Yahoo group at FX-Mon Yahoo Group. Please join the group if you want a copy of the files and the other stuff up there. The back-tests only go back as far as 2005 since the system will not place any trades prior to then.

My plan is to start trading the EUR/USD systems and AUD/USD systems live later this year. Stay tuned to see how it turns out.