Firstly a happy New Year to all readers and members who I wish the very best for in 2012!
In this roundup of the year I wanted to take a look at the Forex robots that performed for us in 2011. Perhaps more importantly I also wanted to take a look at the systems that are most likely to generate results in 2012.
One thing I have noticed in my time trading is that people will often expect strategies to simply ‘work’ and don’t take much account of the prevailing market conditions in which they expect this to happen. Trading automated Forex software is no different.
It’s fairly evident from the news that markets are very volatile at present with the continuing global banking and credit problems. Movement in the currency markets is increasingly being dictated by fundamentals and news flow which, of course, is something that mechanical automated strategies are perhaps not best suited to dealing with.
Against this backdrop it is perhaps not surprising that over the past year, it has not always been the systems that everyone expects to perform that have actually performed. I could go on here about the perils of taking too much time to backtest systems and basing your decision on whether to trade the system on these results.
The fact of the matter is that no matter how long you spend developing accurate backtests you will never gain a true insight into how the system will actually perform when traded live.
This is why I use strategy tests as a loose guide and place a greater importance on the strategy used when assessing the potential of a robot’s ability to perform. This is the same approach that I take to any Forex trading system.
There are many robots constantly hitting the market, some of which we chose not to test and others where we simply did not get time to do so last year.
Therefore our round up focuses only on the robots examined on FX System Trader and on the results we achieved from the live tests over the past year.
So here goes with the FX System Trader awards…
Profit +49.26% Relative drawdown 46.84% Win Rate 93%
Website - www.forexoverdrive.com
Without a shadow of a doubt the best robot that we tested last year in terms of sheer performance was Forex Overdrive.
I have seen some mixed (and pretty critical reviews) for this system, all of which I can fully understand. The risk reward ratio is pretty appalling with a huge 325 pip stop loss on each trade. And it doesn’t backtest well.
However this is pretty much sums up why picking an expert advisor to trade often comes down to matching the system strategy to the market dynamics.
The EUR/USD and GBP/USD have often moved in wide ranges over the past months and here the big stop has actually probably helped.
This leading performance has however not come about without risk. At point point the draw down reached nearly 50% . So certainly this is not a system to be used by the feint hearted!
When constructing a portfolio of Forex robots it pays to balance the software used. This should include making use of a variety of strategies to compensate for market changes.
As part of a well constructed and diversified setup of robots Forex Overdrive certainly adds some spice and the potential for making good gains.
Profit +20.2% Relative draw down 27.19% Win Rate 81%
Website - www.forexmegadroid.com
A consistently favourite system. It has been around for a long time and has undergone several updates along the way.
Why do I like this system? Well simply because it keeps producing steady results and I don’t live in fear of waking up one morning to see my account with a margin call.
I have run this on several personal accounts pretty much since it was launched and have made some very good gains over the years.
While the level of draw down and the win rate have slipped a little over the past year, we have to of course remember that the current climate has been a rocky road for many EA’s. Nevertheless the live forward testing account on this site is up +20% since we added the system to the test portfolio. This in my opinion is a solid gain from a commercial system.
Always a good starting point for new traders due to its ease of use, the price of this system is still being heavily discounted which makes it an even more attractive proposition for inclusion into a well balanced Forex robot portfolio.
Profit +23.85% Relative drawdown 6.68% Win Rate 81%
Website – www.forexcleaner.com
In the latter part of 2011 there were a number of robot releases which moved away from the popular scalping strategies that seemed prevalent in the early part of the year.
The pick of these in performance terms has been the Forex Cleaner robot which is up over 20% which has been achieved with a low associated level of drawdown.
The EA seems tuned into the current market conditions and with no sign of market dynamics changing anytime soon, it is highly likely that we will continue to see good performance from this system into 2012.
Website - www.fxopen.com
This category is a bit subjective. It does of course depend upon your own views and experiences of a broker and other factors, such as whether you need a regulated broker to trade with and of course the brokers suitability for the strategies that you use.
However it is worth mentioning FXOpen here as we put a number of systems on test with them towards the end of the year. I speak as I find and have received both good trading conditions and excellent support.
The ‘cabinet’ management they offer makes it easy to create additional accounts to run your expert advisors on which is always useful when you are trying to track individual EA performance.
FXOpen are not a regulated broker which is likely to be a consideration for some, in particular those looking to deposit large sums with their broker in the current environment.
However for those less worried about this the ability to manage your accounts easily the low deposit requirements for account opening ($1 for a micro account, $25 for a standard) makes them both a good and cheap alternative for managing and running multiple accounts for live EA testing as opposed to using demo accounts.
Website - www.swvps.com
I was not sure whether or not to include this category or not, as to do so somehow seems to indicate that one provider is far better than others we have used. However I moved all of the test systems onto an SWVPS account in the middle of last year and have not experienced any problems with either the performance of the VPS or with the support provided.
As a point to note, my only interaction with the support desk came during the initial setup. Since then there has been no reason to contact them as the VPS has operated reliably and without incident.
For this reason SWVPS remains my top recommended provider.
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So there it is, my round up of 2011 with a brief look forward to 2012. I am sure there are likely to be many discussion points and many challenges to my awards for this year.
The aim of FX System Trader is to always provide a balanced and objective review of systems and automated Forex products which we aim to continue into 2012.
If you would like to comment on my above selections then please feel free to use the comments section below or join me in the forums.
I believe 2012 is going to be another exciting year and I am already looking at the first of the new crop of automated systems already launched this year.
Please check back soon to keep up with the latest FX System Trader robot reviews and live forward testing and again, wishing you all a happy and prosperous 2012!
FX System Trader
Forex Cleaner Expert Advisor Product Details
Product: Forex Cleaner
Price: $99.00
What You Receive: Forex Cleaner Installer, installation instructions, lifetime updates, support
Currency Pair: EURUSD
Timeframe: 30 minute
Guarantee: 60 day money back guarantee
The core strategy behind this EA attempts to identify tops and bottoms in the market for its trade entries. However it doesn’t just blindly enter each potential trade position identified. It also makes use of a range of indicators to qualify its entries, including Bollinger Bands, ATR (Average True Range) and Moving Averages. This in conjunction with its ‘price action’ algorithm allows the robot to filter out many of the weaker signals before opening a trading position.
The take profit and stop loss levels are dynamically managed on each trade with this strategy. The exact level will depend upon the market volatility at the time of trading. The system compensates for this and assigns the most appropriate level for the prevailing conditions. At the time of writing the systems is showing a TP average of 65 pips since we started testing it and a similar figure for stops.
A lot is made on the vendors site about the fact that this system is not a scalping robot (it trades the 30m time frame). Scalpers seem to have got themselves a bad name at present- though this is more likely due simply to the market saturation of these systems. Oh and of course then often need a good broker low spread broker to be able to get the best out of their performance. However there does seem to be a need for many of the newer robot vendors to try to distance their product from such an association.
However although it is not(!) following a scalping strategy, this system is does show a good amount of trading action. Expect to see a position opened on most days.
The wider thirty minute time frame used by the strategy will also mean there is less problem with broker compatibility. It also suggests that the back tests we undertook should prove a representative indication of the results that are achievable from running the robot on your account.
Forex Cleaner is also fully NFA Hedging and FiFO compliant. This means it will only ever have one position open in the market at any one time and can used in conjunction with US based brokers.
While no manual was being provided with the software at the time of purchase, a sufficient set of installation instructions is provided on the website. These take your through the simple 7 step process of installing and configuring the system. This is itself simple, with Forex Cleaner being provided as a packaged installer. So getting yourself up and running is a straightforward ‘click through’ affair.
The default settings provided are recommended. So all thats left to do is bring up a 30 minute EURUSD chart and set the EA to work on it.
A particularly nice feature worth mentioning is that the license purchased covers the usage of the robot on two live accounts and up to three demo accounts. Other vendors could take a lesson from this approach as it actually makes this system incredibly cheap in you are planning to run it across multiple accounts.
Backtests for Forex Cleaner were carried out with a 2 pip spread using Alpari UK data. Default trade settings were used.
For a full breakdown of trades taken click on the chart below to open up the respective MetaTrader Strategy report.
Of note the EA performs strongly in the 2011 and 2010 test results, although longer term there have been long periods of little real growth.
This suggests that the strategy has been optimised towards the most recent markets in order to boost performance. However this is no not necessarily a bad thing, as ultimately the aim is to make profits in the current markets. Therefore whether the system was firing on all cylinders five years ago is only of limited relevance.
EURUSD 2011
EURUSD 2010
EURUSD 2005-2010
The question of course that needs answering with any system is ‘can it actually perform?’.
While there are plenty of back tests we could find on this system, we, like you wanted to know how the system would perform, on a live account, in real market conditions.
Of course as usual, this is what we have done and put Forex Cleaner live on an FX Open account.
The robot has now been on test for little over a month and is showing a 9.3% return at the time of writing with a win rate of 67.5% and a profit factor of 1.92%.
So a solid if not spectacular start, but a profit nonetheless and achieved in the particularly volatile markets of late . This system is certainly going to remain high on our watch list and could well feature in our end of year recommendations.
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Product: Forex Avatar
Price: $99.00
What You Receive: Forex Avatar Installer, installation manual, updates, support (email and Skype)
Currency Pairs: EURUSD, GBPUSD
Timeframe: 5 minutes
Guarantee: 30 day money back guarantee
The strategies used by EA seem to come in batches. With a lot of scalping systems coming onto the market recently it now seems that more and more trend following systems have now started to emerge.
Forex Avatar is described by the vendor as being a’ non-Martingale, non-grid based’ Forex trading system. It is certainly no scalper and instead looks to book a decent profit from each trade. The entry for the trades taken is not clear but it certainly looks to be based upon some analysis of the lower time frame trends. In fact it is quite difficult to determine too much about the way in which this strategy trades at all. It is very much a ‘black box’ based system with settings that can be altered, save from the ability to enable/ disable trading on Fridays.
One thing to note however is that the settings contain the ability to set up to 9 different magic numbers. If you have not come across these before, these are designed to allow a unique identifier to be assigned to open positions for specific trade management by MetaTrader. This suggests that the system has the potential to have multiple orders open at any one time, a fact backed up by closer inspection of the Strategy Tester results.
The Forex Avatar Expert Advisor comes with a installer which is a simple click through affair. This actually installs two EA’s in your MetaTrader terminal; one for the GPB/USD and one for the EUR/USD currency pair.
These need to be loaded on the respective charts on a 5 minute time frame. Other than this there is very little else to do in order to set the EAs to work. You will of course need to unlock the Expert Advisors. This is done by sending across your MetaTrader account number to the support address provided. You will then receive an unlock code to enter which will activate both EAs.
Full instructions on how to use this Forex robot are supplied in a PDF manual. As well as taking you through the setup process it also contains the usual recommendations of brokers and VPS services to use. A good FAQ section is also provided which can help if you have any problems in getting the system up and running.
Tests were carried out with Alpari UK data on supplied default settings (spread 5 pips) and were run with fixed lots. A money management option is also available in the EA which will let you trade with a specific percentage of your account.
You can drill into a full breakdown of each test report by simply clicking on the required chart below.
EURUSD 2011
EURUSD 2010
EURUSD 2005-2010
GBPUSD 2011
GBPUSD 2010
GBP 2005-2010
Over the longer term, performance for both pairs looks impressive. It is however clear that with more recent performance GBPUSD has proved somewhat more volatile than its counterpart with recent draw down hitting nearly 20% in 2011 to date, compared with around 10% on the EURUSD. 2010 shows a similar story with the EURUSD providing a steady growth curve with a lower level of draw down and volatility.
It is however interesting to note that over the longer 5 year test, performance on the GBPUSD pair significantly outstrips the EURUSD.
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Product: Paraswing EA
Price: $99.00
Currency Pair: EURUSD
Timeframe: 1 hour
What You Receive: Paraswing Installer, set up instructions, free upates
Guarantee: 30 Day Money Back Guarantee
The Paraswing EA is a fairly rare thing in the Forex robot market these days – and that is simple!
While I often praise systems for offering flexibility in providing a range of settings that can be used to ‘tweak’ and refine the strategy offered, there is a lot to be said for systems that are supplied with the intention of simply working ‘out of the box’.
The Paraswing Forex robot falls into this camp with the trading algorithm mostly hard coded into the EA. In fact the settings on offer number only two. Both focus on the money management used by the strategy.
The first allows you to tailor the lot size to your trading account while the second allows you to trade with variable lot sizing by making use of the ‘Percentage Free Margin setting.’ This is essentially a built in money management feature. With this setting you can specify the level of margin allocated per trade. As your account size grows the lot size is then automatically increased to reflect the greater equity available in your account.
Suggested parameters for both of these settings are supplied by the vendor, allowing you to specify whether you want to take a low, medium or high risk approach with the strategy on your account.
The strategy used is based on Swing Trading. This a fairly popular approach used by traders and certainly has many advocates in the Forex field. Charts are set on a 1 hour time frame with indicators and calculations factoring in hourly and 15 minute time-frame moves, as well as the Weekly High/Low / Close. The documentation supplied by the vendor suggests that the success rate of the system is somewhere between 60-70%.
In keeping with the simplicity of the system as already mentioned, both the take profit and stop loss levels are dynamically managed but look to be around 100 pips in either direction.
In running the backtests on the strategy I decided to stick with fixed lots as this I believe gives a truer picture of performance over the selected time periods.
The tests below were run against Alpari UK data and should prove reasonably accurate in terms of the achievable performance. Results are unlikely to be very broker sensitive due to the higher timeframe of trading and wide take profit and stop levels (unlike scalping strategies spread and slippage will have minimal impact).
Unlike many EAs which have struggled over recent months, performance looks to be holding up well as evidenced by the 2011 year to date test. Interestingly the highest draw down seen over the extended 5 year test (2005-2010) was just over 30%, while this year the highest level to date is 10%. It may well be that the strategy is more suited to the volatility in the markets of late.
You can click on any of the charts below for a full drill down into each individual Strategy Tester report.
EURUSD
EURUSD 2011
EURUSD 2010
EURUSD 2005-2010
Both the performance and simplicity of the Paraswing EA make this an attractive proposition.
As previously mentioned, trading on a high time frame means that the strategy is not reliant on broker spreads or slippage in order to produce its results. For this reason it should also perform fairly consistently across a range of different brokers.
While some traders may bemoan the lack of ability to adjust the strategy with so few settings exposed, to us this is also one of its main attractions.
All in all the Paraswing EA provides traders with a potentially profitable out of the box automated trading solution.
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Product: Forex Real Profit Expert Advisor
Price: $199.00 (Annually)
Currency Pairs: EURUSD, EURCHF, EURGBP, EURCAD, USDCHF, USDCAD, GBPCHF
Time frame: 15 minute
What You Receive: Forex Real Profit EA (v 5.25 ex4, dll file), user manual, updates, email support
Guarantee: 30 Day Money Back Guarantee
The Forex Real Profit EA is an Asian scalping robot which trades in a very tight one hour window each evening. This suggests to us that the strategy used requires a low volatility environment where it is looks to profit from technical close outs. These often occur as trading concludes at the end of the US session and through the transition to the Asian open.
This time period has however become much more volatile of late. This has impacted the performance of many similar scalping strategies, so it will It will be interesting to see how the Real Profit EA copes with these new market dynamics.
The Real Profit EA comes with settings to trade seven currency pairs by default–EURUSD, EURCHF, EURGBP, EURCAD, USDCHF, USDCAD and GBPCHF. Full back tests have been produced by the vendor for each of these pairs showing the level of performance achieved over various historical time intervals.
The vendor states that other pairs can be traded with the EA although no back test results are provided. So you will of course need to conduct your own. We would expect however that the strategy will work best with the pairs recommended by the developer for obvious reasons.
The system is provided as a straight forward ex4 file and dll. It is simply case of copying these into your MetaTrader folder structure as advised and restarting your platform in order to be up and running.
The supplied manual is concise but it is clear and does the job in taking you through the set up process. You will need to open a chart for each currency pair (15 minute timeframe) but beyond this there is little setup required. The default settings are applied to each currency pair as provided.
There are a number of settings in the EA which you can use to tailor the trading parameters. As well as the more standard settings used to adjust take profit and stop loss levels, there is also the ability to trade with a ‘Volatility filter’ and ‘Trend Filter’ and also to set the maximum level of spread the system will accept when trading.
The system can be run on 4 or 5 digit brokers and ECN brokers and would benefit as with most scalping strategies from a broker with a low spread during its trading window.
A lot of backtest results have been made available by the vendor and you can also find examples of the system trading across a range of live trading accounts with different brokers.
For our Forex Real Profit EA backtest we made use of Alpari UK demo data. This makes sense as the data is reasonably accurate and accessible and the vendor is also trading the system on a live Alpari UK account. While of course there are always discrepancies when backtesting this gives a notional feel as to how the robot is likely to perform.
As the system trade across a number of currency pairs there are quite a few test results below.
You can click on any of the charts below to view the full Strategy Tester reports for each test.
EURUSD
EURUSD 2011
EURUSD 2010
EURUSD 2005-2010
EURGBP
EURGBP 2011
EURGBP 2010
EURGBP 2005-2011
EURCHF
EURCHF 2011
EURCHF 2010
EURCHF 2005-2010
USDCHF
USDCHF 2011
USDCHF 2010
USDCHF 2005-2010
GBPCHF
GBPCHF 2011
GBPCHF 2010
GBPCHF 2005-2010
USDCAD
USDCAD 2011
USDCAD 2010
USDCAD 2005-2010
Longer term performance from the tests looks good, although more recent has been somewhat more choppy. This is to be expected given the upswing in volatility over this trading time as mentioned previously.
The key thing to note is that the results above are achieved with a much bigger tolerance of the spread used than many similar scalpers. Given how many of these systems have suffered of late, this is likely to be a big factor as to why performance has held up so well even as volatility has picked up. If you can trade with a broker whose spreads are well within the tolerance then you can expect to further improvement on the above results.
Note that we were unable to produce any meaningful results on the EUR/CAD pair from the Alpari Data. However we would expect the results to be broadly in line with the tested pairs.
There are a couple of points we should mention which impressed us about this Expert Advisor offering.
Firstly the vendor has obviously invested a lot of time and effort into this system. A forum has been made available where you can find help on setting up the system and speak directly with the system vendor. You can also download a free demo version of the EA which will allow you to trial it out with a few brokers or make adjustments to the settings in order to see how it performs under different conditions.
The second thing that we were impressed by is the fact that live verifiable account performance has been made available on the website. There are a number of live accounts running across different brokers so you will be able to check on the effect that this has on performance.
From both the back test simulations and the live trading results it certainly looks like this system has the potential to perform. Of course as with all scalping systems that trade the illiquid Asian session, the broker that you pair the system with is likely to have an impact on the actual results achieved.
However paired with the right broker and benefiting from the developers seeming commitment to updates and support, this looks like it might prove one of the more profitable robots currently available.
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