Forex Derivative, EURO-Blaster and Twitter

Dear FX Robot Man Readers!

I know it has been a long time since my last post, but my summer has been intensely busy since University let out in May. I have been up north in the State to visit Yellowstone National Park with my family, writing my dissertation and preparing for a conference on CO2 Enhanced Oil Recovery coming up here in 2 weeks.

So what does that have to do with Forex? Absolutely nothing! I really haven’t had as much time as I would like to devote to forex, but I have been slowly investigating some new systems to begin testing. I am not ready to give any more buy recommendations just yet, but I do have some new demo accounts for you to follow if you would like.

(note: all of my live demo accounts can now be followed on the “live statements” page)

Forex Derivative

A new EA was just released called Forex Derivative 2.0 written by Zack Kolundzic. The EA looks like it has used a former of monte carlo optimization built in Matlab to create the position sizing algorithm (sidenote: I am using Matlab for my dissertation and it is awesome).

http://www.forexrobotman.com/recommends/fxderiv

The strategy itself trades the EURUSD, GBPUSD, AUDUSD, and USDCAD. It appears to be some kind of major swing trading strategy that uses a grid to enter up to 3 positions. My preliminary back testing shows that the system account equity can go into flat or draw down periods last from 10-20 trades. I also have watch the same trades take the account up by 6% and then turn around and close down at -6% . The newest update is supposed to help deal with that issue.

Although I have purchased it for myself, I want to watch how it trades for a couple of weeks before I write up my preliminary review and/or recommendation.

You can follow my Forex Derivative 2.0 Demo Account here:

EURO-BLASTER v2

The EURO-BLASTER trades the EURUSD only on the M5 chart, and uses about every indicator imaginable to determine the trade direction. Once the trade direction is determined, it enters 1 or more trades looking for 25 pips of profit with a massive 350 pip stop loss.

http://www.fxrobotman.com/recommends/euroblaster

The number of indicators being used makes back testing and optimizing the system incredibly slow and daunting. My preliminary tests do show however that the system has the potential to make some serious cash – especially during the last 18 months. That being said, when those stop losses get hit, your account can really get beat up. My thinking is that you would want to try to quickly double your account, and then remove those profits right away. That way, no matter what happens you are trading with “free” money.

This system is a NO REFUND system. Once you buy the system it is yours to keep whether you like it or not. This actually doesn’t bother me. There are so many EA hackers out there stealing systems that I can completely understand while some developers are going the no-refund route.

You can follow my EURO-BLASTER v2 Demo Account here:

Follow Me on Twitter

I have decided to start up a Twitter account for FxRobotMan. You can view my Twitter feed updates in the right-hand sidebar of my website, or you can “Follow”  me on Twitter by visiting:

http://www.twitter.com/fxrobotman

Writing up these longer blog posts and articles takes quite a bit of time, however, I can easily add short little updates on my Forex work  and “first look” behind the scenes notes on which systems I am starting to investigate. I will try to “Twit” between 1-5 times per day, so if you want more frequent updates on what I am up to you can follow me there.

That is all for now. I really need to get some EA programming work done for Angus (don’t worry Angus, I haven’t forgotten about the changes we discussed for your EA I am working on).

Best of luck with your trading,
-Ben aka FX Robot Man

Forex MegaDroid Review

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Update 7.20.09 :

I have just released a special eBook called Advanced Droid Tactics that introduces a new way to setup MegaDroid so that it trades more frequently and hopefully earns many more pips!

http://www.droidtactics.com

FX Robot Man Readers-

Many of you have been bombarded with promotional emails from every major forex affiliate promoter regarding the newly released Forex MegaDroid product. Since many of you have emailed me about my opinion on this matter I thought I would quickly type up my impressions. Hopefully this will be one of the more objective Forex MegaDroid Reviews you will read – some good comments and some bad comments.

Also, I went ahead and actually purchased Forex MegaDroid just now so that I could look under the hood and do some forward testing and back testing of my own. If it doesn’t return 10% within 90 days I will ask for a refund, but 10% every 90 days is enough for me to hang on to most products.

The 3 Criteria

As with any products I consider, I quickly analysis them using the 3 criteria I have mentioned elsewhere on the blog: 1) Back Testing, 2) Forward Testing, 3) Price versus Performance.

1. Back Testing

The Forex MegaDroid promotional page gives obviously back tested results for each year, year by year, from 2001 through 2009 claiming the robot returns anywhere from 300% to 800% per year in each of those years. You will immediately notice that back testing statements and the settings used for each year are missing. Whenever the strategy tester statements are not supplied, and the EA settings for the back testing are not revealed, I get skeptical – primarily because it becomes difficult for me to replicate their results.

2. Forward Testing

Unlike FAP Turbo and many other legitamate forex products, Forex MegaDroid provides no forward testing demo accounts or live accounts that you can follow. As many of you know, this is a real sticking point with me. If your EA makes a minimum of 300% per year and you aren’t willing to setup even a $250 live mini account and publish the live results – then I become skeptical.

So, as a service to my readers, I will be publishing my forward testing demo results from Forex MegaDroid for all the world to see. I just barely bought the product and got it setup on my forex computer, so no trades have been made yet, but you can follow my MegaDroid account here:

http://fxrmmegadroid.mt4stats.com

3. Price and Performance

If the MegaDroid actually delivers a minimum return of 300% per year – even if that requires very aggressive settings – then most people with at least $250 should be able to justify purchasing the product for $97-$149 dollars. In a quick back test I just finished, using 10% risk from Jan. 4th 2009 through today, the MegaDroid generated 77% return with a 16% draw down. So, I’m guessing this thing returns more like 50-150% per year if you were to use the conservative settings that most people would be comfortable with.

At 50% per year this would mean you would need a minimum of $149/0.25/0.5 = $1,200 in trading capital to justify the purchase. If it returns 100% per year, you could start with $500-600. For the purposes of this Forex MegaDroid Review, or any MegaDroid Review for that matter, you should probably discount the results to whatever you think an acceptable drawdown is. If you are okay with a 5% per month return, then you probably only need to risk 5% with this EA.

Conclusion

As with most new forex products on the market, this one seems to be over hyped, but the strategy itself appears to have some merit based on my very preliminary back testing. My advice would be that you are probably safe giving this one a try, but if this robot doesn’t return at least 10% by the end of June, you should probably ask for a refund.

By claiming it gives 300% per year, that is a high expectation to give people – so again – if it doesn’t return 10% per quarter – send it back.

-Ben aka FX Robot Man

P.S. Don’t forget to follow my forward test results that will accompany all of my Forex MegaDroid Reviews of this system at http://fxrmmegadroid.mt4stats.com

FAP Turbo Review +Live Demo Testing

Important! Please Subscribe to FX Robot Man by Email to stay updated on my FAP Turbo experiences

The newly release FAP Turbo comes from the same camp as the original Forex Auto Pilot Trading System (FAPTS) and their membership group FAPWINNER.COM. Although I do not have any experience with the FAPTS system or their trading group at FAPWINNER – one thing is for sure – these guys have some of the slickest marketing skills I think I have seen in the Forex Expert Advisor Niche.

Seriously – they have it all down on the marketing side: Fancy websites, backtesting, forwardtesting, testimonials, emails, ads, video testimonials etc. etc.

Their newest creation, again, is FAPTURBO and I thought I would jot down my initial impressions since their is so much buzz about the system (no doubt as a result of their powerful marketing machine). Here is one of the promotional emails I got with their claims:

————————————

Fap Turbo Triples A $ 10,000 Account

————————————

Hey Ben

I have even more proof the new trading robot has been

successful trading live accounts. This latest

statement I managed to get shows how a $10,000

account tripled. You can see it here:

http://wareswaldo.fapturbo.hop.clickbank.net

This new trading robot that doubles accounts inside a

month has been nicknamed Fap Turbo. The term turbo,

obviously refers to how quickly it increases your

account.

Here’s what you will like about FAP Turbo, you can

trade it with any account size big or small. In the

first video we saw how the robot turned $370 into

$3,100 in one month. In this latest proof you can see

how it took a $10,000 account and turned it into over

$30,000.

FAP Turbo is an automatic trading robot that trades

without you being there. It’s actually an amazing

thing to see. You can learn more about that here:

http://wareswaldo.fapturbo.hop.clickbank.net

Good Trading

[Name Removed]

1. Claims

Basically they claim that they can double accounts every 30 days. That is a huge claim to say the least – and you learn after you purchase that those results are achieved with much higher risk settings in the 5% range. Most traders (including most successful ones) are only comfortable with risks in the 1% to 2% range – and in fact, the default settings for FAP Turbo are 1.5% for Scalp Trades and 1% for the Long Term Trades.

2. Strategies

FAP Turbo is trading 2 different strategies along side each other. They have one long term strategy and one scalping strategy.

Long-Term Strategy

The long-term strategy is implemented on the 1-Minute EURUSD chart and enters buy and sell orders using equal lot sizes (up to 5 trades total). Default take profit settings look to be about 140 pips, but I am not sure how losses are managed. It IS NOT a martingale strategy, but it has that feel since it has both long and short positions open at the same time.

Scalping Strategy

The scalping strategy is implemented on the 15-Minute USDCAD, EURCHF, GBPCHF, and EURGBP cross pairs. The default risk is 1.5% and the system scalps during the low volatility of the Asian session starting around 21:00 GMT. This strategy requires low pip spreads of no more than 4 (or 5) pips, so if you have a high pip spread it may not make any trades. IBFX for example has a high spread on GBPCHF and may not make trades on that pair.

3. The Good and Bad

Good

• It trades two different systems and has many customization features (which could also be a bad thing). I’ve just left the default settings for the demo accounts below.
• It has a “Shadow” setting so you can hide the stop loss and take profit levels from your broker.
• The system seems to have good risk management, so you are not likely to blow up your account – that doesn’t mean you won’t lose money – just that it won’t blow up your account in two weeks (PID SP4 anyone?).
• They use ClickBank so you are guaranteed your money back if you want. They have an anti-piracy feature that may disable your software if you get your money back – so don’t buy this thinking you can get a refund and keep the system for free (as is possible with some other ClickBank EAs).

Bad

• I hate to say it, but the hype itself makes me skeptical. If you are reading this then you know that there are a lot of Forex EA scams out there (Ebay EAs anyone?).
• I don’t like the fact that the scalping system requires low pip spreads and at the same time only trades on pairs that are more likely to have the higher pip spread.
• I think this system, because of all of the customizable variables, may be extremely over optimized and may break down when conditions change (as do most EAs for that matter).

4. Live Demo Forward Testing

Although they have live forward testing statements built directly into their sales letter (which I have to admit is a brilliant marketing tactic), it is always best to get independent results when evaluating any Expert Adviser.  So, without further ado, here are two live demo accounts for you to watch. One is running on IBFX and the other is MIG Forex:

UPDATE! I had to restart the InterbankFX Demo because something went wrong when the markets opened Sunday night and the Expert got disabled. Also, because of the success of the FAP Scalper strategy, I decided to up the Risk to 5% for the scalper strategy on both demo accounts.

1. FAP TURBO InterbankFX Live Demo Statement - NOTE: Restarted 12/1 due to crash
2. I discontinued the MIG account….
   

Conclusion

Yet to be determined…we’ll see how these demo accounts perform and I will report back in 1-month or so!