ForexRobotTrader.com robot review - BUSTED! -$3,318

[ameyhazuan]

Good to hear that. Now you can start your testing

[626MX]

Change your max bars in MT4 to keep in history to 2000 or even 1000. In tools/then charts. You don't need 100,000 bars of history for anything. It speeds it right up.

[Ken Long]

This is a really big help, thanks. I've had a lot of problems running EA's on my laptop while I was trying to do other work.



I recieved an e-mail from Don this weekend.

He does not recomend using a VPS service, he says they've had too many problems.

It also seems quite easy to contain the drawdowns. Theres no need to hold them till the end of the month. He claims you can set a risk allowance as one way to limit drawdown , you can also close open trades at any time using a stop or target, or on a color change. I've read several people on the FPA site who recomend closing trades weekly. Personaly it seems that running a fixed stop loss for safety purposes, and an automatic sell if a higher level trend changes would make most sense.

You can also open new charts on the same currencies without closing the old ones using the magic number sequence, so you can trade multiple time frames at once, in this way you can also install new chart windows to keep the robot trading during open holding periods. As well you should be able to use the robot to build a large position in a trending currency by taking partial profits at a target and holding the rest on a trend line.

He implies that you can do this on one platform under the robots control, but I'm still not sure its posible to add to an existing position under the robots control. It seems more likely that you would need to accumulate the position as seperate trades, or remove the robot and control the position manualy.

I'm still very interested in this robot in spite of the negative comments. It seems likely they are expecting the robot to run itself, and they arent ready to self manage the drawdowns. These drawdowns are probably the bigest liability this robot has going, and I see no logical reason for them.

[626MX]

Don E-mailed me everyday for over 1 month with testemonials, and statements and praise until I finally bought it. Now that it margin called 2 times on his exact settings his demeaner is 100% changed when asking for a refund. Ken, you have done enough research on this guy, quit beating a dead horse and pursue something of more value to you. With all due respect of course.

[Killer-B]

Long time reader, 1st time poster... Nice site PipCop...

Joined just to respond to this thread-

As a precursor, I've been forward testing Don's EA on a LIVE account since July 2008-

Across 10 pairs (per his site) it does do fairly well, however, the drawdowns are TERRIBLE and even with MM (Money Management) on, it will eventually blow-up your account, unless you're running like a $100k at 5%-

It does no good to have 100+ $12 winners, just to get called out when EUR/CHF swings against you at 500+ pips

I've seen other testing sites that show a 95% drawdown average-

To gain (approx) 12% over a month, but with 500-900 pip DD's is just insane... Trading without a S/L is also suicide - This program WILL blow up your live accounts... Sorry

Lastly, Don *IS* a great guy - and will help you, assist you and guide you as needed.. He pushes his other EA's and "Affiliate Mktg" more after you buy in though... Grew weary of that, as I never could get his EA to mimic his results on his website... so was leary of any other "new" EA he had to offer ...

FWIW, people ALWAYS bitch when they loose money... But I did this by the book - 3 x $1000 accounts - 10 pairs on ONE, 5 pairs on the other 2 over 4 months... Used .01 trades with MM on - and it blew up each one within 2 weeks- DD's are the killer - as is placing a new buy/sell when the pair is already at a historic all-time high or low... Again, you can't replace human intellect...

The theory is good... but needs more work and a better exit strategy-

The "never lose" claim is bogus, as he just keeps everything in float open...

Needs to offer a refund policy - but doesn't - Total waste of time and $3k - But that's just me

KB

PS: I suspect this will get "jailed" eventually... Also, as to RAM and such, it *IS* a CPU hog - esp with 10 pairs running... but you don't have to have the charts loaded on screen... but helps to see what it's "doing"... Otherwise, it will freeze your PC... Cheers

[Ken Long]

KB,

Thanks, excellent comments. This is why I dont own this yet.

Some of it seems repairable simply by managing the positions better. Using stop losses, and breakeven settings to prevent devastating drawdowns. Exiting on a signal change, in addition to a take profit setting. Accepting frequent small loses as part of the proccess. Even holding partial positions on a longer term trend .

All of this seems possible. What bothers me the most is that no one else seems to confirm it. But everyone can confirm the problems with drawdown . And he doesnt offer any guarentees, or any way to test the theories without buying the system.

What you mention about "placing a new buy/sell when the pair is already at historic all-time high or low" is anouther big problem that should be correctable. This is basicaly a multiple moving average trend system, with a pretty colored indicator . But without some sort of range and cycle indicators it becomes very linear. Even adding a long term stochastics would work, as long as it prevented buying the top of the range , and selling the bottom.


All due respect accepted. I quite agree. I'm beating a dead horse. I've had that feeling more than once about this program, but something keeps drawing me back.

This is a simple system. It should work. And it should work on many levels. Theres no logical reason why it doesnt, other than the crappy exit stategy and peoples expectations.

In fact some people claim great results with it, even after using it for some time, but they dont hold their open trades for so long. Typically they choose to close trades weekly.


Now, since I still do not own this program, Is there any sort of oscillator built in that we could use to prevent buying the tops or selling the bottoms?

Has anyone tested anything other than the default settings? Please consider backtesting on one pair, EURUSD, with the addition of a 100 pip stop loss, and an automatic exit on a Heiken Ashi color change 1 time frame higher, as safety protocal. Keep all other default settings intact, particularly the t/p level.

I still do not see why this program can not work well. All it needs is better exit and safety proocals, some way to prevent buying/selling into overbought/oversold conditions, and a more frequent inspection and manual management of open positions.

[Killer-B]

Not to continue beating the dead horse here... but you've pretty much nailed it, and summed up ALL the problems within this program.... better than I ever could....

But yes, it does work - as a counter-trend trader... I've tested it on all pairs - with different TF's (owned it since late June) and even Don admits he's trying new/different TF's and has yet to nail "the one". Seems to do better on 1HR+ but is trying to shorten that up..

My bottom line / main complaint is it will chug thru the early trading hours - placing 20-30 trades... which eventually "work" (counter-trend ) and I'd go to sleep thinking all was well... But then 2 or 3 trades (Usually a /JPY or /CHF) would run wild in the night... drawing you down 500+ pips and the margin call collapse begins...

To address THIS... I placed a 150pt S/L.... Well, Murphy's Law, first 8 trades of 10 went to -150 That too is a big problem with counter-trend EA's - they don't have the "brains"(intuition/common-sense) to get out of a bad trade gone south...

As to all-time highs/lows, I trade on News and resistance / bottoms... I've seen FRT place several Sell orders at the bottoms (this was before the global economies blew up LOL) - and had to manually back my way out of several dozen bad trades IT placed... It actually created more work for me into the wee hours just to break-even by undoing its "bad" orders.

FWIW, Don does not suggest closing weekly, but rather monthly - Though there is a "no trade on Friday" toggle... Do you have the software? (DEMO)? Also, I chose to let it "run" 24x30... as a good Bot should be able to handle (plus I hate leaving money on the table) - Also, he does "Gaurantee" you'll never lose... If you leave EVERY trade open forever, you never will technically LOL....

PM me if you wanna talk-

KB

[whreid]

While the concept is sound, the large DD's are a problem. The large DD's are caused by inefficient entry points. In general, efficient entries should be profitable at the outset. The EA basically gets in way to early without good confirming signals. If you read through Don's interview he freely admits the EA gets in very early before others see the trade. Anyway, trading without a SL can be very risky, but if the strategy is sound it should not matter. Having said that, my tests indicate that the EA has a very difficult time being profitable with a SL .

There are more than a number of people trading this EA successfully and they drop hints from time to time. Some of the suggestions are - closing out trades weekly, turning off money management and controlling risk yourself. Personally, I am researching currency trading to find markets uncorrelated to the equity market. As such, using all of the currency pairs without considering the correlation between the pairs only contributes to larger DD's. You should probably limit your portfolio to 4-6 un- or low correlated currency pairs. I changed the Lower TF to 30 minutes from 5 mintues. This should reduce the number of trades and improve entry points. I also use a trailing stop (#2). I also use the exit on color change. The only frustrating thing yet to solve is the risk / reward. It is hard to TP @ 20 pips after you experienced a 100 pip drawdown . I have always believed in letting winners run. I am also going to look at adjusting the start time for the various markets.

My demo has just started its 4th week and so far so good. I have yet to experience the big one, though I have had some interesting small DD's. I have been running a portfolio of 6 pairs.

[gundam98]

I just don't like the DrawDown of this EA
It's like seeing a great profit for a month but collapse within a day.

[Ken Long]

Interesting comments. Some I have to disagree with on principle.

When you say this is a counter trend trader. It isnt suposed to trade the counter trend , it uses the counter trend as an swing entry into the trend . Typicaly it should be able to hold this on an indicator signal, and ride the trend to its limit.

The program does not enter the counter trend . It detects the counter trend and enters on the first sign of trend continuation. Which can then be held until failure.

The problems with this kind of strategy occurr during flat ranges where it can get easily whipsawed, and any time the trend reverses. These are typical problems with a moving average system where there is a lot of lag.

This brings us to the entry problem. The system doesnt enter early, it enters late. A smoothed moving average ia a very laging indicator , it always misses the pivot by a large margin , both on entry and on exit. This can be seen easily by comparing the indictor signals with the price bars.

This is a typical trend trading strategy of sacrificing the tops and bottoms and trying to capture the middles. The advantage is it doesnt get kicked out on fluxuations easily. Its made to hold a trend .

This may be the best way to use this robot, as a good way to enter and hold a trend .