Reviews
Forex Goldmine Robominer
This expert advisor has been under test since May 2009 and uses a grid trading strategy. What this means in effect is that it is a long-term strategy and works best on larger accounts (Forex Goldmine recommends a minumum of $2300 if trading just the AUDNZD pair and $4000 if trading both AUDNZD and EURCHF) The reason for this is that the robot looks at the historical range traded by these 2 pairs, which have been chosen because they don’t trade to extreme support or resistance levels. In layman’s terms, if you look at the price curve of either of these pairs, it doesn’t fluctuate as wildly as other pairs one could trade. The theory behind this is that the economies represented by these currencies (ie Australia/New Zealand and Eurozone/Switzerland) are similar economies and are affected in similar ways by global economic events and trends.
Effectively, over a 12 month period, one can expect to make modest gains using this robot, but there will always be some level of drawdown, which will increase considerably when either currency pair is trending toward the extremes (ie towards the limits of the historical range) The reason for this is that Robominer trades towards the centre of the range (currently this EA places sell orders for AUDNZD and buy orders for EURCHF). This is why it is best to trade a micro account with a relatively large balance, so that the large drawdown does not trigger a margin call by your broker, causing losses which will wipe out the gains made by the robot’s winning trades.
The reason why I chose to test this robot first (apart from the obvious reason that Forex Goldmine offers a free demo, something that is extremely rare in the forex robot market) is that it uses a no-loss strategy. The benefit of this is that when the market gets choppy (as it seems to increasingly these days), stop-losses are too easily triggered especially if your broker uses price-hunting tactics against you. (Avoiding these brokers is key to your trading success if using a robot that uses stop-losses – look for one that is not a market maker (aka bucket shop to use the industry slang) – consult FPA or some other independent reviewer)
So this is not a get-rich-quick scheme which seems to be the main selling point of so many forex robots on the market. Instead, for those who have the disposable funds and the stomach to risk their money in a market which is undeniably more risky than placing your money in a bank term deposit, the return one can expect is in the region of 5-10% per month. On the other hand, the programming of this EA makes it definitely far safer than robots which try to make large gains but can equally wipe out live accounts in a short space of time if those aggressive trades go against you.
At present, I have put Robominer on hold on my live account as it is only a $1000 account. The logic behind this is that as I now have 11 trades open in the market (0.11 lots or a total of AUD$1100 worth of currency), as long as these currencies don’t break historical levels, there will be no margin call, and when the prices start to head back toward the centre as they historically have, these open trades will reduce and eventually go into profit. At that point I can turn on the EA again and build up some more profit, and if the drawdown eventually increases again, I can repeat the cycle until I have enough capital to trade the robot continuously. This is a slow process and not one I would recommend, but for those who can’t or won’t risk more than $1000 and are willing to adopt this hands-on approach to building capital, it is definitely a strategy that will work, but as I said, it is not a get-rich-quick scheme by any means, and you will have to wait up to a year before you can withdraw profits. However, if you put that same $1000 on term deposit for 12 months the same would apply and you might get $100 for your efforts. Using Robominer, that figure could be upwards of $500. Worth the effort? You decide. Caveat emptor, as the old saying goes, let the buyer beware. If you do want to try the free Robominer demo run if for a few months till you are familiar with how it works and when you are ready, it will cost you either a one-off fee of $495 or $39/month.
Given the returns possible and the long-term nature of the Robominer’s trading strategy, it is worth paying up front in my opinion, as you will then have the EA and its support for life. Put it this way, it’s not worth trading this EA live for less than 12 months, and in that time you will have paid almost the full amount anyway. But if funds are tight and you’d rather put the difference of $456 in your trading account straight away, then you will have to be committed to paying the $39/month until the account is ready to pay out. It’s not worth making withdrawals while a live account is in drawdown as that increases the risk of a margin call.
To sum up, this EA is definitely not for those who have limited capital and are looking for a quick buck. On the other hand, to use aggressive EA’s is more akin to gambling. My recommendation: if you have disposable income you can save, or access to credit , either save or commit your borrowings with the realisation that you need to put up in the realm of $4500 up front. If you can’t do that, $1500 is the bare minimum, but the risk level is higher and you will have to work harder for your money by managing the robot, and being sure to have the right trading psychology, that you are able to turn off the robot when necessary, and have the patience to wait for your returns.Think tortoise and hare, which one won the race? The slow plodding tortoise of course. By that reckoning, Robominer wins the race every time, but although this is an automated trading system, it is still dependent on a human being to manage it. At the end of the day, it’s your money, and the robot is only a tool you are using to increase it. Your call…
No Loss Robot
This EA can be used on any currency pair but Don Steinitz, the supplier of the robot recommends that it be used on those pairs with the lowest spreads, typically the major currency pairs. So on his recommendation, I am trading the following pairs on my demo account:
AUDUSD, CHFJPY, EURCHF, EURJPY, EURUSD, GBPUSD NZDUSD, USDCAD, USDCHF, USDJPY.
On the live account I am trading all of the above except the EURCHF, to avoid conflicts with Robominer which trades the EURCHF on the same live account.
So far in demo trading since November 9 2009, the No Loss Robot has created a lot less drawdown than the Robominer, probably because it uses a more sophisticated algorithm known as the HAS or “Heiken-Ashi Smoothed” Indicator, to open its trades, rather than the simpler grid strategy employed by Robominer, which merely breaks the trading range into a grid of 50 sections and just opens trades in each section. So far so good, this is a more accurate robot. Nevertheless, the same logic applies. Where there is drawdown there must be risk management. Which is why I have also shut down No Loss Robot on the live account until its trades come back into profit. And because these currency pairs are not so stable, there is inherently a higher risk, albeit with a potentially higher return than with the Robominer due to the larger number of pairs traded and the more accurate trade execution.
So again the tortoise strategy is the wiser one with this EA. You do need to watch the drawdown, and you do need to be aware of the inherent limitations of this robot, as with any robot. I believe however that in the long term the No Loss Robot is a viable trading instrument, with the proviso that the no-loss strategy is not a panacea, and that unrealised loss can potentially cripple, or even wipe out a live trading account, if it builds to the point that your broker creates a margin call and turns it into realised loss.
So again, let the buyer beware…
Primeval EA
I have only been testing Primeval EA since January 2010, but already it has impressed with its accuracy. Unlike the other two EA’s I have tested, this robot does use stop-losses, but because most of its trades seem to close in profit within the first day or two, that turns out to be more of a benefit than a drawback. From what I can see, drawdown is not going to be a problem with this robot. Having said that, there is a grid-trading strategy than you can select for the EURCHF currency pair, and that will carry forward unrealised loss in the same way as Robominer and No Loss Robot do. However, so far, trades placed using this strategy have closed within a few days. It will be interesting to see if that pattern continues in the long term.
Interestingly, Primeval EA has made as much profit in a week on a demo account as the two other EA’s tested have in a month on a live account. If that continues, I would be confident to say that this is the best and most accurate robot tested so far, and as it seems to be able to use stop-losses without reducing the account too drastically, the realised profits will be able to be compounded or withdrawn, depending on the account owner’s preference, as drawdown will effectively be kept in check by the ability of this EA to recognise when an open trade has gone too far into the negative, and stopping it short before it gets any further into the red.
As a final note, I have been in touch with Sergio Caruso, the owner of the Primeval EA site, and he has been very helpful in advising me how to setup the robot, and what settings to use on which currency pair. For your information, these are the RiskLevel settings he advised me to use:
GBPUSD: 10, EURUSD: 15, EURCHF: 20, EURGBP: 15, USDCHF: 15, USDCAD: 10, USDJPY: 10, GBPCHF: 10
In conclusion, Primeval EA seems to be a clever combination of smart order execution and stop-loss management resulting in what so far has been profitable trading. It can take losses when there are sudden market movements as happened recently with EURGBP due to some aggressive trading of the GBP,
but these do not seem to be big enough to override the profits.
To view a trading statement of my demo account since January 26 2010, please click here.
To view a trading statement of my demo account since February 15 2010, please click here.
Bear in mind that previous to 15/02/2010 other EA’s were traded on the live account and there are still trades open from those robots which detract from the current balance.
