Forex Auto Trading Systems

Archive for the ‘Forex Trading’ Category

I have been testing Primeval EA for 6 months now, and this month it has proven the consistency of its algorithm by once again gaining the #1 Rank in the Top 3 Robots ranking based on demo trading on this site. Not only has it beaten some strong competition from Forex Goldmine’s Robominer and Pip Strider, it has done so from a starting deposit of $1000. Bear in mind that the 2 Forex Goldmine EA’s require a minimum deposit of $2300 per currency pair traded. This proves once again the “less is more” strategy. Trying to make more money by doubling up the lot sizes such as Martin Locker King and Pip Strider attempt to do, simply does not work on a small account, so for the small investor, a scalper like Primeval EA is the only way to go – scalping being the strategy of small, frequent trades adding up to a larger amount over a longer period. The tortoise beats the hare every time in forex trading. Over a year a scalper like Primeval EA can double your money where a more aggressive robot will probably lose the lot.

Once again, this week’s trading proved the truth of the adage that the only constant is change. Aeron Forex Auto Trader is now No 1 in the Top 3 Robots rankings. This is a very smart little EA. It combines scalping with a Martingale strategy and good money management and while it makes an occasional loss, so far it has come out ahead.

In No 2 position is Forex Panda Robot, once again proving that you get what you pay for. This EA seems to use leverage as its main weapon and unfortunately that means big losses if the market goes against you, along with the big gains. It remains to be seen whether it will be profitable in the long term as it only seems to trade about once or twice a week. Two of its trades this week were whopping losses of $1000 each which wiped out most of the profit made last week.

Coming in 3rd is Martin Locker King which has finally started to make some winning trades this week. Another Martingale strategy EA, this is starting to look like a consistently profitable  robot.

The last few months have been a wild time in the forex markets. The Euro has crashed due to the problems in Greece triggering an economic crisis in Europe which mirrors what happened in the US last year. That situation has been stabilized for now by an EU/IMF bailout, but volatility is certainly still alive and well in the forex markets.

Which brings me to the EA’s I have been testing. Interestingly, thanks to a plunge in the AUDNZD following the crash in the Aussie dollar, the Robominer has come back into profit. Primeval EA has suffered losses due to volatility in Euro based pairs particularly the EURCHF and EURGBP. So for anyone who is getting into forex auto trading at this time I would recommend some diversification. In other words, use more than one EA. Unfortunately for me, I did not have enough capital to maintain the minimum recommended live account balance to benefit from Forex Goldmine so I did not benefit from Robominer’s recent success (although you can see the results in my demo account balance!)

On another front, I have started testing a free EA which readers of this site can gain access to by subscribing to the Forex Auto Trading Systems Newsletter. This is not a frequent trader, it is supposed to make a trade once a week but so far hasn’t made a trade so I will keep you updated on how that goes.

I am also about to start testing another Forex Goldmine EA, the Pip Strider. This will probably be another highly risky venture for me as my live account balance is now less than $1000 so it will be sink or swim for Pip Strider. However, with any luck it will make enough winning trades to stay ahead of disaster. I will also be running Pip Strider on a $10,000 demo account so that will give readers a more accurate assessment of Pip Strider.

I have to admit that for most of last year while I was still demo trading, I favoured no-loss trading strategies such as those employed by Forex Goldmine’s Robominer, and I still think such a strategy has a place for those with deep pockets, time on their hands and a willingness to accept a long-term conservative return of about 5%/month. I stress “long term” as the market cycle can take months stretching into years to realise profits when there is strong trending as there has been with the AUDNZD, the main currency pair traded by Robominer.

However, this post is not about Robominer but about Primeval EA, a scalping EA which so far has managed to close all its trades (including the losing ones) and still make a profit of 8.95% in the last month on a live account. In fact, my Primeval EA demo account has not fared that well, and actually has a few trades open at the moment mainly due to the fact that I DID select Primeval’s own EURCHF grid-trading no loss strategy for a few days when I started trading. 7 weeks later, the market still has not brought those trades back into profit. So for anyone that is planning to live trade with Primeval EA, please don’t use the grid trading strategy unless you have at least $2000 in your trading account that you don’t need to touch for 6 months at least.

For those who are able to invest $1500 and some time, ($500 to purchase Primeval EA and $1000 to fund their account), based on my first month of live trading, this EA would pay for itself in just under 6 months, and thereafter would be making about 9% (or more) per month as ROI on the $1000 invested. Interestingly, I did an analysis of which currency pairs were the most profitable, and based on the last month’s trading, I would have made closer to 17% return if I had simply omitted the EURGBP and the USDCAD from Primeval’s repertoire. All the other currency pairs made a net profit on their trades.

Just a hint to anyone who is thinking of purchasing Primeval EA, I have been advised by Sergio Caruso, the administrator of the Primeval EA website, that the price will be going up by $100 on April 1st, so if you want the clock to start ticking now on your trading program, best to join in the next week, not only will you save $100, you will also start making money on live trading. This is not in any way guaranteed of course, and no one can guarantee these kinds of returns, but even if you make enough to beat your credit card interest rate you are still ahead. Just a thought.

Greg Annett, Webmaster

I know that it is often said that there is no holy grail when it comes to forex trading, but to my mind, an automated forex trading system that has a 90+% success rate has got to be about as good as it gets.
Why? Because as human beings we have limited time, and lets be honest here, most of us are not attuned to the sophisticated calculations required for manual forex trading, so even if forex robots don’t get it right all the time, if they can close off their losses pretty smartly, most people should be happy with that.

So is Primeval EA that perfect EA? Well, time will tell, how it fares over a longer period, but so far I can confidently say that it is without exception the best expert advisor I have tested so far. Click here to view this week’s trading stats.

I have come to the decision this week, to turn off both EA’s on my live account for the foreseeable future, until the drawdown on the account is reduced. The Robominer II EA on the AUDNZD chart has already been disabled for a week.

The reason for this is not so much a lack of confidence in the robots’ abilities, but a recognition of the limitations of using an EA to trade a relatively small live account. When I contacted Forex Goldmine support about the warning displayed on the chart that the account balance was too low to trade safely, and asked them whether $1000 was a safe amount to trade, this is the reply I got:

“Please take that warning seriously. If your account has standard lots, then you should have a balance of at least $2300 to trade .01 lots of just the AUDNZD pair or $4000 for both pairs. There can be many 0.01 lot trades opened over time, and they add up. That is why we strongly insist that users follow the balance guidelines. Doing any less is not trading the system correctly and could potentially lead to a margin call.”

So as I am not prepared to risk more than $1000 on this initial account (and I am sure that there are many traders out there who are in a similar situation) I have decided that the only way to limit the risk is to reduce the number of trades by shutting down not only the Robominer II but also the No Loss Robot for a while. I currently have 12 trades open in the market, a total of 0.12 lots or AUD$1200 in currency on margin.

To put that in perspective, that’s the price of a cheap used car where I come from! Of course the fluctuation in currency prices is small enough that the total drawdown at present is only $242.32, but given that I should probably have at least $10,000 in this live account when I take into account the 9 currency pairs which the No Loss Robot could potentially open trades on, I think it is prudent to pause the EA’s until the number of open trades is reduced. The AUDNZD is currently trending long against the Robominer’s sell strategy on this pair, and although the EURCHF has turned around and is now heading in the right direction, I am happy to sit back and watch the trades for a while, with take profit stops in place, and allow the market to take its course. If I left the EA’s online they could potentially open another 12 trades in the next few weeks, and if the AUDNZD continues trending that could open me up to the risk of a margin call.

The No Loss Robot has 4 trades open at the moment, on AUDUSD, NZDUSD, USDCAD and USDCHF. The AUDUSD and NZDUSD are currently trending short against the No Loss Robot’s long trades, and the USDCAD and USDCHF seem to have peaked and may now be ready to go back in the right direction for NLR’s short trades. I guess the rally in the USD was shortlived, or at least that’s what I’m hoping!
Either way, I believe I can ride out the storm if I batten down the hatches!

I commenced live trading this week and Robominer has already closed 3 profitable trades, for a total of $7.02 which extrapolated over a year equates to about 35% per annum. Not bad considering that I set a 115 pip trailing stop on one of the trades and it closed with only $0.65 profit. Ah, the psychology of live trading! If I had left it alone the trade would have made its full 400 pips resulting in about $3.20 like the other 2 trades, so the ROI would have been 48% pa. I also turned off Expert Advisors after a couple of days as I was nervous about trading during the holiday period. As it turned out there was some strong trending on both AUDNZD and EURCHF so I probably could have made more but thems are the breaks. I’ll turn the robots back on in the New Year when trading resumes after the holiday weekend.

The No Loss Robot got off to a bad start. I couldn’t figure out why it had not initialized on the charts I set it up on. A trap for new players: I copied the ex4 file to the experts directory but did not run the installation exe file to install all the other files required to run the robot. It looked like it was installed as I had previously had the demo installed there but obviously that exe file needed to be run again to make everything good. By the time I realised what I had done and fixed it, I decided not to trade for the remainder of the week, again because of the holiday period.

I also got a warning on the chart when I installed Robominer, that the account balance was too low to trade safely, so that is a concern especially as I was contemplating running No Loss Robot on 9 different pairs as well as Robominer on its 2 pairs. Although I am reasonably happy to take the risk of running Robominer on a $1000 account at 0.01 lots, I am probably pushing my luck running both robots at the same time on the same account. So I’ll have to consider whether to top up the account or take the risk.
Or alternatively just run one robot at a time. This is not a problem you have on a demo account where you can create as much free money as you like and run separate accounts. With real money you have to consider your budget and how much you are prepared to risk. So again the psychology of live trading comes into play.

So watch this space. I will report progress as it happens…

On November 9 I began testing on a new EA brought out by Don Steinitz of www.forexrobottrader.com. It is the No Loss Robot and can be found at www.forexrobotnoloss.com. This robot (the name says it all) uses a no-loss strategy similar in some ways to the Robominer. In fact, the no-loss strategy is about all that they have in common. No Loss Robot can be traded on any currency pair although the designer recommends those pairs which offer a relatively low spread for obvious reasons.

I am trading the No Loss Robot on 10 currency pairs suggested by Don Steinitz, and they are:

EUR/USD, GBP/USD, AUD/USD, USD/JPY, USD/CAD, USD/CHF,  EUR/CHF, EUR/JPY,NZD/USD, CHF/JPY

By the way, all credit to Don Steinitz who was generous enough to allow me to test this robot free of charge. Most marketers of these EA’s don’t back their systems in this way so I am pretty confident that the trading results I have achieved so far will be sustainable.

As a side note, the robot appears to be a development of the MTF HAS expert advisor which has been available from www.forexrobottrader.com in the past, but with No Loss Robot it seems more attention has been paid to money management. Gone are the large drawdowns and losses of the past, in fact so far I am impressed that even with trades open on 10 currency pairs, the No Loss Robot is running less of a drawdown than Robominer. In addition (probably because there are more trades out there on 10 currency pairs as opposed to 2 with Robominer) the robot is making more trades, and, so far more profit in a shorter period of time. Time will tell, however, if this is sustainable with the more volatile currency pairs traded by No Loss Robot.

One thing I do like about the No Loss Robot is that it is possible to trade the minimum 0.01 lot size and still make a good profit. What this means is that one can potentially start with a smaller deposit. Personally, given the volatile nature of the forex beast however, I would not recommend anything smaller than a $1000 deposit. We’ll see how the test deposit goes over the coming months…

Why Aren’t More People Forex Auto Trading?

Over the last 5 ½ months since I started paper trading with Forex Goldmine’s Robominer, I have experimented with settings and have now, I believe arrived at an optimum setup for realistic returns from this forex robot, or expert advisor program as it is correctly called. Overall, the ROI (return on investment) at the date of this post, is about 13% for the period traded, which equates to about 30% per annum. This result in itself is worth the effort but in no way reflects the full potential of this robot. As an indication of what is possible, in the last 1 ½ months, since I settled on the optimum lot size to trade on Robominer, the ROI was nearly 50% which extrapolated works out at about 400% per annum. And that is without taking compounding into account. Given that this return equates to more than 1% per trading day, by incrementing the lot size and thus the eventual profit, each time the account balance increases, it is theoretically possible to make much more than 400% per annum.

As I mentioned in a previous post, $1000 compounded at 2% per trading day would turn into $20 million over 2 years. Of course, the compounding effect of trading with this robot is not as straighforward as making a simple mathematical calculation, like the banks do when they calculate interest. Because each trade can take up to a month or more to close in profit, there is a lag in the compounding effect which effectively means that the account balance will grow in leaps and bounds rather than consistent growth on a daily basis. Nevertheless, compounding does happen, and when you consider that only $1000 starting capital is required, even a return of say $1 million over 2 years is a staggering amount to make for that kind of investment.

Which brings me to the question which makes up the title of this post. Why aren’t more people forex auto trading? I suspect there are a few valid reasons, and some pyschological reasons which are perhaps not so valid. One valid reason is the risk involved. This is not a risk-free investment. It is however in my opinion a low enough risk to take given the rewards involved. Another reason might be the effort and time involved in setting up and monitoring the program. While it may not be as easy as putting the cash in a so-called “high interest” savings account, once the initial setup is done, there is not as much work involved as there is in trading forex, eminis or stocks manually. In fact, you don’t have to give up your day job or lose sleep sitting up late into the night watching the markets, waiting for a buy or sell signal, as many traders believe is necessary to make a living from the financial markets. I myself spend a few minutes a day before breakfast and after work, basically just checking to see if any trades have closed, and adjusting the lot size using a spreadsheet I have set up to calculate what it should be according to the current account balance. I also spend some time saving the current trading results once a week and posting them on this blog on the Trading Stats page.

Another reason may be that the average punter is not able or willing to invest $1000 which may represent 2 weeks pay for the average worker. This is a reasonable objection given the financial pressures which are brought to bear by the banking system on people who have outstanding debts such as credit cards, mortgages, car loans etc to pay off. There would be a big temptation to trade a smaller amount such as $50 or $100. This is NOT a good idea as the chances are, you WILL lose it due to the risk management profile of an account that size. Given that the minimum lot size on a micro forex trading account is 0.01 which equates to $100 of currency in the market, and given that Robominer opens multiple trades over a period of time, this means that if for example you had ten 0.01 trades open in a $100 account, a price fluctuation of 10% would wipe out your account. In fact, your broker will not let that happen and will start closing trades at a loss well before you get to that stage, essentially defeating the Robominer’s no-loss trading strategy.

PIPS Club

So what’s the answer? Well, short of suggesting that people go out and borrow $1000 on a credit card and take the plunge, there may be a way to invest a smaller amount such as $100, and still get a strong ROI. What I am planning to do, to help people who are interested in forex auto trading, is to start a profit-sharing club called PIPS Club (Private Investment Profit Share Club) where there is a guaranteed ROI over a period of months and the owner of the profit-share can then use the funds to start trading their own Robominer EA. What I am suggesting is a minimum profit share of $100 which will mature after 12 months at $500. That amount would cover the cost of a lifetime licence for Forex Goldmine’s Robominer. Another 2 profit shares would cover the cost of the initial trading deposit. Alternatively, if someone wanted to take the risk, they could conceivably just trade $500 and cover the ongoing cost ($39) of a monthly Robominer licence themselves. So for an outlay of $100, after 12 months the PIPS profit share owner would have a growing forex account starting at $500 and potentially growing at a rate of 1% per day.