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Forex Expert Advisors Forex Photon an Unbiased Review

Today another new automated trading system called Forex Photon has seen the light. Within this post I will look at this experts website and I will review its evidence. At first I will analyze the reliability and quality of the evidence provided and I will then see if this evidence is able to backup the authors claims. After doing this I will then do a careful analysis of the trading tactics according to the evidence and I will tell you my opinion about the experts potential of achieving long term profitability and whether or not this trading system is worth buying and testing. Is the Forex Photon trading system reliable ? Does it have a good like hood of being long term profitable ? I will try to answer these and more questions during the following few paragraphs.

The home page of the forex photon website makes some pretty strong claims about this trading systems profitability. The creators of the system claims the Forex Photon expert advisor to have very low draw down, profitability under any market condition and a very high winning rate, things which are easy to claim but actually very difficult to proof in the long term. They also state that they do "no marketing and no B.S" something which they do seem to try to carry out through the whole page.

When we look at the actual evidence of profitability available we see some very interesting things. We have 10 year backtesting results divided by years for several currency pairs, something which is interesting and actually worth congratulating the Forex Photon team for as they seem to be willing to do everything they can to prove their systems profitability. Nonetheless, this evidence show us some very interesting facts about the system like a risk to reward ratio close to 5:1. It is very interesting to say that systems which have unfavorable risk to reward ratios tend to be sensitive to a decrease in the winning percentage as they need a very high winning ratio to remain break-even or only slightly profitable. The fact that the average closing profit of the system is in the order of 5-6 pips points out that one minute interpolation errors are bound to be very important and the fact that the backtests are done on a 5 minute timeframe does not help either since the small number of reference points makes the highest real achievable modeling quality on this time frame only 50%.

In my experience systems like this usually have a great overestimation of the number of profitable trades and real trading usually shows periods of consecutive or nearly-consecutive loses which end up taking all the systems profitability. Also the fact that the TP is actually so small will make execution variables such as re-quotes, slippage and spread widening vital to evaluate true profitability.

However, the people at Forex Photon seem to know this and they also put up a myfxbook account showing us the "live" performance of Forex Photon. However, it is very worth noting that the live account shown does NOT have its investor access verified, pointing that the statement shown could be manipulated. I urge the people at Forex Photon to get their investor access verified to eliminate this possible doubt. Sadly, since multiple currencies are being used, a back/live testing consistency analysis is not directly possible from the "live" trading data shown. The winning rate on this "live" account seem to be above 83% but the testing period is just too small and simply not statistically relevant in order to think that the system could be long term profitable. A test of about 6 months would be needed in order to compare the trading system with backtesting results and see if the errors within the backtest account for all the experts profitability or if the expert can still remain profitable within live execution.

In the end - eventhough the intentions of the people at Forex Photon seem to be good - the trading system simply cannot prove yet that it has a high like hood of being long term profitable. The backtesting statements of this system, due to the very low timeframe, low TP and high risk to reward ratio are highly unreliable and only tests on live accounts over LONG periods of time can show if this system has or does not have true pontential. Since a high like hood of long term profitability cannot be proven yet, I consider this system not worth buying or testing, since simply there is no reason to believe that very large risks are not being taken as there could - and probably is - a large underestimation of loses in the long term on the backtests. If 6 month - 1 year investor access verified live tests which are directly comparable with backtests are provided then this evaluation could be done and we could accurately determine the actual extent of these problems.

If you would like to learn more about the design of long term profitable systems and how you too can make your own systems that can adapt to changes in market conditions and have a high like hood of withstanding the test of time please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
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Forex Expert Advisors The Forex Revolution an Unbiased Review

Today its the turn of yet another of the recently released trading systems called "forex revolution". The forex revolution is however not only about systems but about the creation of a community around expert advisor development centered around the experts developed by the revolutions programmers. On todays post I will write my review about the forex revolution, I will go through the communitys/experts website and talk to you about the trading evidence available and if this evidence is able to backup their claims of profitability. I will also evaluate the currently available results and comment on the soundness of the trading strategy used and finally I will tell you whether or not - in my opinon - this system(s) is worth buying and testing.

It is a little bit difficult to write a review about a project such as the forex revolution. Since the idea of this website is to build a community about system development, new systems and evidence may arise in the future which I may not take into account within this review. If there is some new evidence available when you read this that is not mentioned here please leave a comment and I will go again to the website and modify the review accordingly.

However right now the forex revolution only has one trading system named REVOBOT1 which they claim to be a non-scalper that trades the EUR/USD, USD/JPY and GBP/USD. The backtesting results of this trading system are not very impressive since they are oddly limited to the past three years and have a 3:1 risk to reward ratio, meaning that three winning trades are needed to recover from each loss. As you may know, backtesting statements from EA sellers cannot be trusted because they are easily manipulated and changed and therefore live testing results are a must to judge the quality of a trading system. In particular, live/back testing consistency of at least a 6 month period is needed to validate any backtesting results.

When it comes to live testing results, the forex revolution is a disappointment. The only evidence of live trading on the website is a statement which although seemingly live updating, lacks any investor access verification meaning that this might be a demo account and not a live trading account. For the moment results for this trading system on this unverified account are very short and therefore a comparison with a backtest of the same period is not useful. From an evidence verification perspective, the forex revolution fails to give any reliable evidence of long term profitability for their REVOBOT1 system. Besides, they mention several times that they made profit with the system (for example "we all made 24% more the next week" (shown below)) so why dont they show investor-access verified access to these accounts that allegedly made those profits ? I think you can answer this question.
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When it comes to the community approach of the forex revolution, I cannot tell you from the outside how good it is or if it has any effectiveness in improving trading systems. However, from the point of view of an experienced person in automated trading, I can tell you that community efforts - when not guided correctly - almost always end up with a bunch of short term modifications that are not based on statistically relevant information that end up taking the systems to a point where there is an obsession with short term draw downs and a fast implementation of unsound trading tactics. I do hope that the forex revolution achieves a better fate if this is really their objective.

Right now I can tell you that the forex revolution with its current expert called REVOBOT1 does not have enough evidence to say that the system is likely long term profitable. The system has very limited backtests (why dont they show 10 year tests ?) and extremely limited and unverified live tests that do not allow us to draw conclusions about the systems profitability. For this reason I consider the forex revolution not worth joining and REVOBOT1 not worth buying and testing. If they are truly serious about the development of their systems then they should add 10 year profitable backtests, 6 months of investor-access verified live testing results and then compare live and backtesting results to prove consistency. They should also add their current live testing results to myfxbook to confirm that the account is a live and not a demo trading account. Once they introduce this necessary changes I will be happy to change my review to reflect the new evidence. Meanwhile, the forex revolution seems to offer yet another expert with very limited and unreliable evidence of profitability. Remember that I am always happy to give systems positive reviews as long as they have the above mentioned evidence which is absolutely VITAL to say that any system has a high like hood of being long term profitable.

If you would like to know more about how you can create your own automated trading systems to achieve realistic profit and draw down targets please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
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September Video Reviews New Commercial Automated Trading Systems

Today I am releasing the 2nd video monthly reviews of automated trading systems. In August we saw the release of many different new trading systems, most of the expert advisors released have absolutely no proof of live trading and most of them do not even give the trader a decent glimpse at simulation results. As always there is an incredible desire of EA sellers to hide information that is easily available and to make the showing of live trading results a shadowy process based on screenshots and html statements when having transparency is as simple as offering a live, investor access verified myfxbook account.

This month we saw the release of forex bullet proof which was pushed hardly by affiliates with a massive amount of junk email being sent. After looking at the website we then find nothing but a very dangerous martingale system with very shadowy "evidence" of profitability that is certainly NOT reliable and makes us become very suspicious about the ability of this system to be profitable in the long term. Anyway, I invite you to watch this months videos to learn more about these trading systems and the reliability of the evidence they provide.

If you are having problems watching the videos please remember that you need the free DivX codec or player available here.

Forex Bullet Proof, an unbiased review

Forex SAS, an unbiased review

Forex MeltDown, an unbiased review

Forex Morning Trade, an unbiased review

FX Wealth Machine, an unbiased review

Forex CounterAttack, an unbiased review

I hope you enjoy this weeks videos. As always please remember that the burden of proof is on the sellers live accounts and NOT on your own. You should not buy any trading system out of faith and the EA sellers should ALWAYS provide reliable evidence of long term profitability. Remember that every time an EA seller avoids showing evidence, it is for a VERY good reason.

If you would like to learn how to make your own automated trading systems and gain a true education about algorithmic trading and how to design systems with realistic profit and draw down values using sound trading techniques please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach automated trading in general . I hope you enjoyed this article ! :o)
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Trading Reality and Automated Trading Realistic Profit Expectations Looking at the Barclay Currency Traders Index

Yesterday I received a very interesting email from an Asirikuy member pointing me to a database showing the past 20 years of performance of top forex traders and funds (the data was originally discussed in this article). Although I had seen the indexed performance of several currency traders before this is the first time in which I had found this data in such an organized and reliable fashion, put together by Barclay Hedge. The Barclay Currency trader index,- in their own words- contains "An equal weighted composite of managed programs that trade currency futures and/or cash forwards in the inter bank market. In 2010 there are 119 currency programs included in the index". To sum it up, the Barclay Currency trader index gives you a snapshot at what the proffesionals in the field are achieving showing you exactly what profit expectations are more realistic and which ones are to be considered completely dilusional. On todays post I want to write a little bit about this data to get those of you who are unaware of what the "industry standard" is, a better perspective of what is and what is not realistically achievable in currency trading.

In the world of currency trading - and particularly in automated trading - people are often pointed out that it is "very easy" to achieve huge amounts of profit in the forex market. Moreover, real live results that show you increases of 100-1000% in a few months are not uncommon in the forex market and they appear to show new traders that you can actually make a small fortune quickly from a small investment in currency trading. However new traders often have absolutely no idea of what the industry proffesionals are achieving or what hedge funds that deal with currency instruments actually get and therefore they often believe the paid actors that pose as traders on automated trading sales sites saying that they have earned millions in currency trading in a few months.

The fact is that huge returns are possible with a huge market exposure and the problem with a huge market exposure is that it causes huge wipeouts of capital as the market evolves. So this is analogous to a person who wins the lottery. You get a huge amount of return in one run but if you spent all your lottery money in tickets, you would hardly ever win again or if you do, keeping on doing this will eventually wipe you clean. The market - I believe - has a self-limiting character which makes the systematic exploitation of market inefficiencies to achieve huge profits impossible due to the fact that huge profits require huge exposures, and huge exposures - lead to wipeouts.

The golden question is then what is realistically possible ? Since there is no way in which the "top" possible average profitability can be inferred the best measurement we have of what can be systematically achieved is what the average people in the field are actually doing and have been doing for a long time. I have to stress here that the "long time" part here is very important since long periods of time imply robustness and statistical significance. Anyone can triple an account in 2 months, but doing it for 20 years is something very different. When you have been trading for a long amount of time it means that you have very sound risk and money management tools that guarantee your long term success by limiting your present market exposure.
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If you check the Barclay Currency Traders Index you will see that the average compounded yearly returns are not to die for. Currency traders average a 7.71% compounded anual return with a worst draw down of 15.26%, certainly traders are in average conservative. However looking at all the profit and draw down figures of the particular traders you will see that average compounded returns and maximum draw down figures are often in a 1:2 to 2:1 ratio, meaning that the average yearly return is actually never better than twice the maximum draw down. If you are thinking that these figures dont apply to you because these traders dont have the "flexibility" of small account holders, you are wrong. Many of these traders are NOT trading billions and many of them have access to liquidity you would only dream of so if anything trading conditions for most of these guys are only better than for the average forex trader.

A very important thing about this index is also that it shows that diversification is the key to long term success with the sum of all traders giving a very smooth equity curve over a 20 year long period. So probably a good lesson to learn here is that using several strategies that are all long term profitable will probably help us reduce draw downs as it helps the Barclay Currency Traders Index smooth its performance. As we have seen with the Atinalla project, having a large amount of diversification is very beneficial in the long term for trading strategies.

However the most important thing about these profit and draw down figures is that they show us the true face of market exposure and what you can expect to be realistic. If in the best case your maximum draw down level is likely going to be around one half your average compounded yearly profit then a monthly 100-200% return or a 100% yearly return for that matter are unrealistic or excessively risky for any sound investor. In the end, this currency trader index tells us that for moderate risks, forex investors should aim for a yearly profit of 20-30% if their risk appetite is moderate.

Currently our Atinalla No.1 portfolio would hold a place near the top of the Barclay Index and for this reason I would be tempted to say that it is very profitable. However we must consider here that the portfolio has not been run for 20 years on a live account and only time will tell us what its real profit and draw down targets are. Nonetheless the most important thing about Atinalla project portfolios is that they are traded with a very good profit expectation and a VERY clear worst case equity-loss scenario in mind, which is 36% for the Atinalla No.1 Portfolio.

If you would like to learn more about forex automated trading and how you too can design your automated trading systems based on sound risk and profit targets please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
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Forex Expert Advisors Forex Retracer an Unbiased Review

Yesterday I received a message on the websites chat from a visitor requesting the review of a new automated trading system called forex retracer. In order to satisfy this persons request (by the way, thanks a lot for leaving review suggestions ! :o) ) I am going to review the forex retracer expert advisor today. As always, my objective will be to judge the soundness of the expert advisors trading tactics as well as the validity and reliability of the evidence provided on the website as a backup for the systems overall profitability. After carefully analyzing all this evidence and going through all the material available on teh website I will give you my opinion about this trading the system and whether or nor I consider it worth buying and testing. As always, my review will be as unbiased as it can be as I receive no compensation for giving either negative or positive feedback about this trading system.

I can say that the forex retracer website seems to be taking the totally opposite approach to all the commonly overhyped trading systems being sold. I dont think that expert advisor sellers should take such two extremely polarized points of view. I am all for not having a lot of cheesy marketing and fake stories but I dont think that you should only place back/live testing statements on a website to sell a trading system. It is always good to have some information about the trading systems overall trading tactics, the type of market movements it wants to catch, its expected risk/profit targets expected from the live/back testing evidence, etc. It is not good to have a bunch of statements with no information about the systems overall trading tactic since trading such a system in a successful manner would be terribly difficult since it would be very hard to trust a system you know absolutely nothing about.

Now, for what the people selling forex retracer tell us, it seems that they want us to figure the profit/risk targets for ourselves from the evidence they provide. Looking at the website we see that the evidence provided is nothing but backtesting statements from 2007 to 2009 on 30 minute charts. It becomes evident after looking at these backtests and the profit figures they reach that some serious exploitation of backtesting faults is happening. This can be explained in terms of the TP values used on the AUD/NZD which are prone to a very strong generation of one minute interpolation errors due to their small values (relative to the pairs spread of 8 or more pips). It becomes evident that this backtesting evidence simply cannot be trusted as reliable due to these obvious problems.

Then we see that there is absolutely NO live testing evidence of the forex retracer trading system. The same question always comes up. If the system is so profitable, why dont the creators trust it with their own money ? Why dont we have any live testing results ? To me it seems obvious that backtests are overestimating profitability to a GREAT extent (making them useless) and live testing results are bound to generate VERY different results when compared with simulations.

Now, when we analyze the backtesting statements provided things are even worse. The expert advisor uses a risk escalation technique which is even beyond the exponential growth of a Martingale (this however has been debated by several people who say that the progressive money management only happens once). For example, a loss which happens on 13/09/2007 with a lot size of 1.5 causes a lot size escalation to 5.6 lots in the first trade. More than three times the lot size used before ! Add to this the fact that the experts risk to reward ratio is about 5:1 and you get that the second trade would cause a loss almost 5 times bigger than the first one.

To sum it up, even though the intentions of the sellers of forex retracer is to provide a no-hype system based on only "reliable evidence" we find that the system does not offer any reliable evidence of profitability. The forex retracer is merely and expert advisor which is being sold on unreliable backtests which are almost with certainty not going to be in line with live testing results. The overall lack of live tests is also not good since it points out that the authors are not willing to put their money on the line to test their own system (never a good signal). (this however has changed recently as the author seems to be setting up a 5000 USD live account to test the system). The trading tactics also reveal very unsound money management with a very unfavorable risk to reward ratio and lot size progression which is bound to make this EA very risky in the long term.

In the light of the unreliable backtests, the complete lack of live tests and the use of unsound trading tactics with a very bad risk to reward ratio, I consider the forex retracer NOT worth buying or testing. The creators would need to remove the progressive money management, increase the size of the TP to allow for accurate simulations and provide at least 6 months of live testing evidence (with investor access verified) in order for me to consider redoing this review. Meanwhile, the forex retracer is what appears to be another extremely risky trading system which is sold on unreliable backtesting evidence obtained in virtue of one-minute interpolation errors or similar tactics.

However, as you may see on the comments, I have been contacted by the creator so that new live testing evidence regarding the profitability of this EA can be provided. As always I am opened to debate and I strongly appreciate the will of the creator to provide additional evidence. This review will be rewritten during the following month once results of a 5000 USD live account funded by the developer start to come out.

If you would like to learn more about my journey in automated trading and how you too can start to learn how to trade and use automated trading systems for long term profitability please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
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Forex Expert Advisors FXZapper an Unbiased Review

Today I will be doing another review of a recently released forex automated trading system called FXZapper. Within the next few paragraphs I will analyze this trading system by using the evidence of profitability provided on its website. Ill be able to compare the evidence with the claims made by the author and tell you if the EA offers reliable and extensive enough evidence to be considered worth buying or testing - on top of this - Ill be able to analyze the trading system evidence and give you my opinion about the possibilities this trading system has of being long term profitable. Please remember that I look for reliable trading systems which have enough evidence (reliable evidence !) to consider that they are both able to adapt to changes in market conditions and have a high like hood of generating a profit in the future.

The FXZapper website is the kind of expert advisor website which is specially dangerous to new forex traders. When you look at the site everything seems to be pure and transparent and you seem to have arrived to what some people call "the holy grail". Why wouldnt you want to buy a system that has been able to turn an investment from less than 5K into more than 100K in live trading with no extensive draw down, progressive money management, etc ? The fact is that you wouldnt and neither would I but the problem is that the evidence provided by the people who sell FXZapper is NOT that of a live trading result. Please remember this clearly - results provided by commercial EA sellers cannot be trusted - we ALWAYS require investor access confirmation in order to provide reliable verification of live testing results.

The "third party verified" status the people at fxzapper attribute to their system is NOT true, mt4stats does NOT verify investor access and their results could have been easily made up from backtests and updated. If you check the backtests and the live tests you may notice a very strange coincidence within the trades, something which would have NEVER been expected for a scalper given the fact that spread widening and requotes would have affected trading to a very large extent. Why do they avoid to show investor access or myfxbook investor access verified results ? The truth is that the "live results" shown are probably NOT the result of live trading but a made-up html made up from backtesting results. If I am wrong then I encourage the people at fxzapper (which I have already emailed) to post investor access, something which I am almost sure they wont do. It is also important to notice that their results are NOT updated live (which could easily be done every hour if this "live" trading was true), something which points out that they are NOT updating this from a live account but feeding it with premade html statements.

Now things turn out even worse when you do some research about this FXZapper trading system, several sources online point that the EA is a copy of a free EA created by Funyoo called XBars MA Scalper, something which would not be new to the creators of this EA which seem to be the creators of FxBrokerBuster yet another knock off of a funyoo freely available trading system.

Analyzing the backtests tells you more about this expert advisors trading tactics, the backtesting results show you a 7:1 risk to reward ratio and indeed a very small take profit of only 10 pips which makes the EA subject to one minute interpolation errors in backtesting, reason why the profitability of the system seems to be extremely high on the backtesting results. As I pointed earlier, the fact that this EA is a scalper will also mean that it will suffer from great divergences between demo/live/backtesting due to the re-quotes, spread widening and slippage which are common when live trading.

What I see with this EA - without assuming that it is a scam copy of another EA - is a deceitful attempt to present made-up statements as live trading results which shows in the obvious disregard towards the basic investor access verifying process which is VITAL to know if live trading results are indeed real and coming from a live and not a demo account. Then the backtesting results tell me that this EA is probably not going to have accurate simulations or demo/live consistent trading results since simulations and demo trading are simply ignoring execution problems which become vital when dealing with this problem.

To sum it up, the lack of reliability of the evidence makes this EA not worth buying or testing for me. If the people at FXZapper offer investor-access to the supposed "live results" and show us evidence that their code is NOT the same code as the funyoo EA mentioned above then, and only then, will I reconsider doing this review. Meanwhile, this people should really take a lesson in honesty and ethical behavior... Taking an EA made by another guy, changing its name and selling it under false live testing results ? Come on... The line must be drawn somewhere !!

If you would like to learn more about my experience in automated trading and how you can profit too using this type of systems by trading with sound risk and profit targets please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
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How to Treat Forex Like a Business Ten Things You Need To Do When You Trade

The internet is filled with people who advice and give their opinion about how others can succeed in forex trading. Many times this advice is extremely vague and does not have any practical implications with it that can actually help newer traders succeed. One of the most common examples of this is how more experienced traders tend to tell people new to the market to "treat forex like a business" while they give absolutely no specific advice on how you are supposed to do this. Sure, for successful traders this is obvious and the advice needs no further explanation - since they are already treating forex like a business - but for new traders the advice is totally meaningless since they do not know how to trade forex like a business or the steps they need to take to make this a reality.

On todays post I want to share with you 10 practical things you need to do to treat your forex trading like a business, after you do these ten things you will find that your trading will be much more organized, your goals will be much clearer and you will be on your road - or at least a much clearer path - towards long term profitability. Definitely treating your forex trading like a business is extremely important but what does this mean ? What practical decisions can you take to change the way in which you trade the forex market ? Keep reading to find out !

1. Think in terms of goals and expenses. The first change you must make is around the way in which you look at forex trading. If you are going to treat this venture like a business you need to think about it in terms of goals and expenses. In trading goals are profitability targets and expenses are both trading costs and losing trades. A great part of your success will fall into being able to look into your trading as a set of goals and expenses.

2. Determine your plan. This is perhaps the most important part of trading which is to determine how things will be done in your business. If you were opening up an aluminium can factory you would have to figure out how you are going to be making the cans, who will buy them and who your suppliers are going to be before you even think about starting your business. Forex is the same thing, you need to have a trading plan which is merely a set of rules (either mechanical or discretionary) that you will follow in your business.

3. Determine your goals based on your plan. Your plan provides the anchor which allows you to determine realistic profit targets. After you come up with a plan you need to deeply evaluate it - through reliable simulations - to obtain a given set of profit targets that you will be able to use. If your profit targets are not what you want they you can change your plan - and reevaluate it - to make them better. When you are happy with your goals, continue.

4. Determine your expenses based on your plan. The next important thing you need to do is understand what your expenses will be. What percentage of your account will you be losing in average every year before reaching your goals ? For how long will you lose that capital ? Accurately determining variables such as the maximum draw down, the average draw down period length and the probability to have a losing month are key aspects of your forex business plan.

5. Determine your capital requirements. Since you now have a plan with goals and expenses you now need to determine your capital requirements which is simply the amount of money needed to execute your plan. Certainly different trading strategies will require different amounts of money to be tradable. This also depends on the amount of money you want to make, if you are aiming to make 20K a year and your goal is 20% then investing 100K might be necessary while if the only thing you want to do is execute your strategy with the minimum possible capital you might only need 200 or 1000 USD.

6. Draw best and worst case scenarios based on your simulations. A very important thing you need to do is to come up with how future scenarios might look for your trading strategy. If your simulations were done in a reliable manner then you can use 10 year backtests to get a picture of how best and worst cases might look like. Your next year might be as profitable as the most profitable year of the past 10 years while it can also be as bad (or worse) than the worst year. Having these pictures is vital since it will allow you to see where your plan is going and if what you are experiencing is or is not normal.

7. Come up with a worst-case scenario. As in every business there can be a point when the expenses are way beyond those programmed by the plan and a change must be made in order to survive to the future. In your trading business you need to come up with a worst-case scenario so that - in case your strategy becomes too risky - you will know well before hand when to change it. I generally use two times the 10 year historical maximum draw down as my worst case scenario, something that has worked well for me.

8. Do monthly, quarterly and yearly evaluations. Another important aspect of treating trading like a business is evaluating how your business has performed in a monthly, quarterly and yearly manner. Just like all other business do you should generate reports and analyze how your strategy has performed during these time periods. It is always important to know if your expenses are what you expect from your plan (within the bound of normal draw down periods), if your goals have been met and if you have reached any of your worst case scenarios. Staying on top of your plan by evaluating it frequently is a vital part of survival.

9. Do not change your plan when it is working as planned. A big mistake - perhaps one of the biggest - new traders make is to jump away from a trader system just because profitability goals are not being met. If a trading system is losing money within the programmed expenses and the 10 year simulations you have made then there is no reason to run away from your trading plan. While your draw downs remain within what you planned when you evaluate the strategy your business is actually working as planned.

10. Do not increase your goals or your expenses. Another very common mistake made by traders who are not yet experienced at treating forex like a business is the change of their goals and expenses along the way. When a system performs well they increase the risk (to increase their profitability goals) and when it is doing badly they sometimes increase their draw down tolerance to allow the system "to recover". There is a reason why you have set goals and expenses and worst case scenarios and you should NOT change them just because of short term performance. Every change in the business plan needs a total reevaluation of goals and expenses which should always be done if any detail is changed. Committing to a set of goals and expenses and sticking to them is a big part of success.

Although the above advice is only a small part of treating forex like a business it does gather all the most important aspects you need to take into account when you want your trading to be something serious, more predictable and less emotional. Treating forex trading like a business with adequate planning, goals and expenses is a vital part of trading which most people new to the market simply ignore or are too lazy to develop. If you follow the above advice and develop a trading plan with an idea of what the behavior of your system might be then you will be miles away from the large majority of new traders.

If you would like to learn more about system evaluation and how you too can develop mechanical systems with reliable simulation results please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach automated trading in general . I hope you enjoyed this article ! :o)
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TECHNICAL ANALYSIS

TECHNICAL ANALYSIS

Technical Analysis is an analysis of price movements of currencies based on the price movement of the currency itself in the past.

Technical analysis has 3 basic principles of thought:

1. Market Price Discount Everything

That is reflected in the price chart or graph has described all the factors that influence the market.

2. Price Moves in Trends

That is the price movement does not move at random but lasts in one pattern (trend) specific and will continue until there are signs that this movement pattern to stop and reverse direction.

3. History Repeats it selfs

That there is a strong tendency that the behavior of investors and market players in the past is equal to the present in addressing a variety of information that affect the market.
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The Road To Financial Freedom Part No 2 Is this Right for You

It is not uncommon for people to persue the dream of "financial freedom" thinking only about the fact that they are tired of a 9 to 5 job and want to have an easy way to earn a living in which work is hardly ever present. On todays post of the road to financial freedom series I will try to give you a good insight into what I think the goals and mindset of a person who wants financial freedom should be and which people should not seek financial freedom because they are either doing it for the wrong reasons or with the wrong perspective in mind.

In what I have seen, there are mainly two types of people looking for financial freedom (trading wise at least). The first are people who are willing to do whatever it takes, work as long as they can, do whatever effort they have to in order to arrive to the dream of profitable trading -manual or automated- and then there are those who simply just dont want to do anything and think of trading as a way in which an income can be achieved without lifting a finger.

Things evolve differently for those two kinds of people. The first kind often struggles a lot in the beginning and have to work about 10 times what they thought they would have to, many with obssesive personalities end up with broken families, health problems, etc, due to the sometimes long hours and inevitable amount of hard work that must go in either manual or automated trading. The fact that they also put a financial burden on their families and take money to trade - almost certainly losing all of it at first- makes things harder for the people around them, specially spouses who sometimes fail to understand the goal to be achieved (mainly because the non-trading partner is usually more rational at this point).

The second kind works almost as hard as the first but in a different area. Their work is not centered on actually learning what they are doing but it is centered in the finding of the "system" that will make them rich without signficant effort. These people often give trading a try for a while and after 1 or 2 years they give up because of the fact that everything they have tried has eventually failed them (or has not achieved the income level they wanted), eventually they find out that their is no "free lunch" and that trading is not the bottomless "gold mine" they read on the sales newspages. These people either quit, or become part of the first group.

Now, there is also a problem associated with the intented amount of money people want to make in trading. Often I hear people talking about a 5-10% consistent monthly profit in forex being a "rational" thing to expect (these people NEVER know someone who has actually been making that kind of money consistently -for a few years-, it is just a dream created by the sales pages). Oh boy, 5% every month would turn 50 USD into one trillion dollars in less than 60 years. The profitable traders I know are often happy with a 1-3% average profit per month, which is very good for most purposes. Take into account that in financial markets, doing better than the S&P 500 is considered to be "beating the market" in the sense that you outperform buy and hold strategies. That is something that very few people in the world are able to do.

Novice trader minds are often "contaminated" with the unrational notion that the forex market is able to give very high profits, thinking that 10-20% per month or more is a rational expectation. The worst thing is that people get into their minds that it is something they can achieve if they work hard. The people who are hard working but believe they can achieve a profit level which is simply unprecedented are the ones who get the worst out of it. They lose and lose money and they struggle and struggle trying to achieve something which is simply not within realistic expectations (taking into account what most profitable traders I know do achieve ). They often get beat up, chewed and spit by the market and in the end they are beaten and defeated. These people usually quit at this point when they realize that they will not get to that million dollars from that 1000 USD account.

My objective with this post is to speak to all of you and tell you that you should give this a very HARD and long look and think about if trading is really what you want to do. Trading is a very intense, time consuming, work intensive way of life. Starting to trade with realistic expectations for success requires good capitalization (at least 2 to 5 times your expected yearly salary if you expect to live from this) and a commitment to work through all the emotions and frustration that will arise from attempting it. Trading is also not your 9 to 5 job so you may have long periods of loses with no paycheck at your door and there will be no one there to pat you in the back and tell you that everything will be ok. As I said on the last post, it is entirely up to you. Your possibilities are limited by your efforts.

For most people out there, forex is not a good opportunity for "financial freedom". Most people are simply undercapitalized, unfamiliar with the whole concept of trading and unaware of how their emotions respond to the trading world. Most people are also unable to deal with the stress of having no paycheck in the mailbox, no "fixed" income and no guarantee of future profits. The extremely large amount of hype and useless things out there dont make it easier for them either. The fact that 90% of new traders fail speaks for itself. If you think forex is not the way to go, then it does not mean you cannot achieve financial freedom, you can always look at a brick and mortar business or an online business which aligns better with your knowledge and personality.

However, if you are truly interested in trading after all that I have said, then you will enjoy the rest of the road to financial freedom series in which I will explain to you the steps I took and all the things I have done (and what I would have liked to do) in order to achieve financial freedom with forex trading. My first step was simple. I wrote in a piece of paper : "I am going to be a profitable forex trader". If you are also interested in my work and would like to know about how profitable trading can be achieved with realistic profit and drawdown expectations on the forex market please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !
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My Turtle Trading EA First Profitable Results !

After doing the first preliminary backtests and realizing that the system failed to generate profits from 2000 to 2009, I decided to take a good look at my programming and check the logic to see if I had any substantial errors that could be affecting the experts trading. After examining the expert for about an hour I realized that I had a problem with the closing logic which was partially closing positions. The ea was closing with lot sizes equal to the atr calculated values, not the values the orders were orginally opened with, so order management was a little bit of a mess.

After correcting this and other less important issues I finally came up with an expert advisor that truly trades the turtle system 2 accurately. As I expected, results are now profitable for trading since 2000 to 2009. The expert is also profitable amongst several currency pairs, including the four majors.

Backtesting reveals that this system behaves exactly as I had supposed it did. We have periods of moderate but extensive loses and then we have very large, trend catching trades that consitute most of our profits. In fact, most of this profitable trades are many times larger than the average losing trade . Trying with different exit and breakout day parameters reveals that the turtles nailed it just right. This expert will not make anyone rich overnight, with the EUR/USD (first graph), you could expect to triple your capital once every 10 years while it would take you this much time to double your capital on the GBP/USD (second graph). If you want a system that has worked for the past 40 years and that can give you a long term, stable profit, then this is a system for you.
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As you can see on the backtesting images, this expert advisor is a slow, steady, sure money maker, based on the turtle system 2. This expert also backtests with a high consistency because it trades only on very large periods of time (sometimes trades remain opened for several months). You can get it by simply subscribing to my newsletter (corrected ea has already been uploaded to the ftp for subscribers), buying me a cup of coffee or buying my automated trading ebook.

If you would like to learn more about other free and commercial expert advisors please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !
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Filtering Everything A Wrong Approach Towards System Design

This year has been one of the most exciting years in my life. In particular, I think that these year has meant for me a huge leap in the understanding of how automated trading systems work and how long term profitable systems can be designed. Today, I want to write a post about one of the most common mistakes people new to system design make, which limits the profitability of the systems and often makes the achievement of profitable systems impossible. The name of this mistake is filtering.

People who program automated trading systems in forums and as a hobby tend to use this word frequently. You will easily find that this is the first thing people try when a given logic does not give profitable results. Does that EMA cross fail to give you profitable results ? What about a filter to remove all those unwanted losing trades ? Do you have a Bollinger band strategy that fails to profit in trending markets ? What about adding a trending filter to take out all those losing trades ? These approaches couldnt be more wrong. Analysts have known for years that there is no such thing as the "switch" that is, there is no given technical analysis tool that can clearly differentiate between two given market conditions.

What is the regular result of adding filters ? Generally you dont get any significant increase in profitability, you just get a reduction in the number of trades. Reducing the number of trades can be either positive or negative, depending on whether the trades removed are losing or winning trades. Results are rarely positive, and even if they are, they rarely put the system into a much better position.

People fail to realize that there is a price to pay for the profitability of each trading system. This price, called market exposure, is simply the amount of temporary draw down the market demands when unfavorable market conditions are met. The Gods gift ATR for example faces long draw down/ break even periods in ranging markets. However it more than makes up for that when the market starts to trend significantly. If you try to filter those ranging markets, you will filter out many profitable trades with them (due to the fact that there is no "switch").

What is the way then to arrive at better systems ? The answer is quiet simple. Follow sound trading principles. Are your loses on unfavorable market conditions larger than your profits when the system is favored ? Then introduce a logic to cut your loses short, instead of trying to filter our all losing trades. Adding a closing logic that quickly takes out losing trades but gives winning trades a chance to follow the trend is one of the easiest ways to improve trading systems, particularly trading systems that are being automated.

The Watukushay No.1 and No.2 experts are very good examples of how the introduction of sound closing strategies that are carefully designed help to greatly increase the profitability of a trading system. If you would like to learn more about these two expert advisors and long term profitable automated trading system design please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !
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So What is your edge in forex trading

I have always wondered if people are really aware at how difficult to trade the forex market actually is. Most of the time people seem to know that the foreign exchange is a place where most people lose their money but they seem to be a little bit away from the concept. Most people consider this does not apply to them. Now, the truth is that most people lose money in the market, specially the foreign exchange market and certainly there is a lot you have to do if you want to become one of the few that can actually profit from this beast in a regular basis. There are a few things that make this more complicated, something which I wanted to point out so that people really become aware of what they are going against.

1. Your competition is not retarded : This is a very important aspect that most traders seem to neglect. They often belive that most people that lose money out there are just ignorant people who dont know what they are doing in the forex market and lose every penny on their accounts due to them not knowing how to trade. Wrong. Of course, this people lose their money too, but most people trading the market are not so ignorant and often, know much more than the new retail trader. Some people out there who lose are economist and finance specialists, so knowlgedge perse is not a way to win in the forex market, experience is very important. I would say, experience and knowledge go hand in hand and both have extreme importance. So dont think you know better if you have not been trading for at least 10 years. It is very difficult to have an edge this way.

2. Your competition wants to win : Most people also neglect that their competition wants that money as hard as they do. If they want to belong to the top traders that take money frequently from the market they have to wonder what they can do to win in their own game. These traders have been taken money from the market for years, even decades, and they are not alone. They are usually teams of very trained proffessionals and experienced retail traders that just want that money as much or much more than you. So what is your edge against them ? Cause I am certain they have plenty of edge against you.

3. Trading a commercial Expert Advisor is NOT an edge : Why would you have an edge if you trade FAP turbo, a system that has been bought and is traded by about 30,000 people ? Thats right, that simply does not give you an edge because it is a tool many many traders are using to try to profit against the market and market eficiency most likely prevents this from happening. Since the trading system is mechanical and automated, it is easily overrun by top forex traders around the world. Sincerely, honestly, do you think that using something you do not understand and many other thousands use gives you an edge ? It simply doesnt, thats probably the truth. They also know how to google, and they too know the program exists and why not to trade it. As I said earlier, your competition is not retarded, every obvious thing you can do to profit, is already taken into account and it wont make you profitable.

4. Automated Trading Systems Need to be Understood to Consitute an Edge : Ok, trading an expert advisor everyone can get their hands into and trade and that is highly commercially hyped wont give you any edge. But that does not mean that automated systems cannot constitute an advantage. If you trade an automated system that exploits a genuine characteristic of the market and you truly understand the way this expert advisor works, then the expert can give you an edge against every trader out there losing money with a commercial EA. The system most be robust, be able to change against different market conditions and you must understand its code and the way it works, from A to Z.

5. You need to know Manual and Automated Trading for Automated Trading to be an Edge (probably programming too) : Yes, sorry to disappoint everyone out there, but if it was as easy as running a program made by Joe X and watching the money flow into your pockets then everybody would do it, right ? As I have said many times, being profitable with automated trading system is even HARDER than being profitable with manual trading systems because long term profitability in automated trading not only requires the regular knowledge of the market a successful forex trader has but it requires knowledge about which systems can be automated, what can really work, how to program the expert, how to debug, how to address the profitability of a system to know if it is long term profitable, etc. If you are just hopping to run an EA and become a millionaire, please, do NOT waste your time, you will only lose money with that attitude in the long run.

I hope this few parameters shine a little light into how hard the forex market really is and how you too can build your edge around a solid automated trading system. If you would like to learn more about ea profitability and automated trading, as well as expert advisors I have tested and reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !
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Ignorance My Worst Enemy

As a scientist I have to say that I have always approached automated trading in a very careful and analytical way. I have always believed in the construction of knowledge around every topic I want to study and of course, trading was not an exception. Today I want to share with you my ideas about how trading should be approached and what I believe the worst problem of the field of automated trading currently is : ignorance. During the next few paragraphs I will talk about the way in which people traditionally approach this field and why this path will only lead people to frustration, failure and ultimately quitting their goals to achieve long term profitability.

Do you remember the time when you first started trading ? When you first searched a forum ? What was on your mind when you started this journey in automated trading ? The truth is that most people who decide to research forex expert advisors and learn more about the topic are motivated by what I consider the "electricity mentality". Maybe you have heard many times that you dont need to understand how something works to use it - in other words - you dont need to understand electricity to turn on a light bulb. This type of mentality is what goes through peoples minds when they get into automated trading. The word "automated" and all the expert advisor seller websites telling you that "you dont need to know anything about forex" makes it sound easy and simple. What is there to lose ?

The fact is quite simple and this is something your probably thought to. If this was so easy to do, if you could just flip a switch and cash on the forex market. Then why isnt anybody doing this ? Why isnt everyone a forex millionaire or even less, why isnt everybody living from automated trading ? The truth is something very simple, which you knew in the bottom of your heart when you started this jounery. It is certainly not that simple, and definitely not that easy.

The problem is that most people believe that the fault lies within the product, not within their approach. People usually think that "it is not that it is not possible, it is only that I need the robot that works" and this is when the quest for the holy grail begins and where most people end their careers in forex automated trading. Do you know how the crusaders who went in search for the holy grail ended ? They didnt find the holy grail and most of them died in meaningless wars searching for it, not very different from what happens in automated trading.

People need to realize that automated trading is not a horse race, it is not about looking at all the different products out there and finding the "one that works". That approach certainly doesnt work. If that way of thinking actually generated success then many people with this "best systems" would have already been successful. This is where most people end and when most people take a wrong decision, they think "the one doesnt exist, automated trading is a scam" and the fact is that the way in which it is proposed by expert advisor sellers, it actually is. There is no cash printing set and forget machine, that is just a dream that in reality makes no sense and - as many of you and me have found out through financial loss - doesnt exist.

What exists and makes sense is a different path. I am not saying that you should all follow it or that there are no other alternatives but this is what I have followed and what has worked for me. In the end, trading - automated or manual - is something you need to understand deeply if you want to succeed at it. When I saw that the promises made by the EA sellers didnt come true, I took my own way and I decided that I would research finance, system development, system design, trading, systems, etc until I got an answer about how to succeed in automated trading. What I have developped is an approach based on knowledge and not on ignorance, I have said goodbye for good to the "electricity mentality" and I have decided to fight this battle with knowledge and understanding.

Maybe my approach is not for everyone as it is not what most people hoped for when they "signed up" for the automated trading experience (in fact many people may get frustrated from reading this) but I have actually learned that this is why so few people succeed in this area. Since being successful in automated trading requires a true effort and a true understanding of all the underlying aspects of the market, system development, etc it is very easy to see that only a few are able to gather enough knowledge to fight the battle successfuly while most continue to search for a holy grail that doesnt exist and a "set and forget" solution that will simply never come.

My invitation is to quit this mentality and focus on developing your skills in the field. Nobody can do this for you, only you can do it for yourself. If you want to learn more about my journey in automated trading and how you too can get an education regarding the use and development of expert advisors please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
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Support and Resistance Trading Starting a Journal

I have received significant interest from several people regarding the post I wrote on Oct 17 about a dynamic support and resistance trading system I use to trade the forex market manually. This trading system is based on support and resistance levels. It is completely discretionary and is therefore almost impossible to be made "systematic" or perfect for "anyone" to trade as other much more rigid trading system, as the turtle trading system, which have very specific and inflexible sets of rules.

However, I do recognize that other people, as well as me, may benefit from a deeper description and evaluation of the system as this will bring up the systems faults and strengths and will most likely improve my performance with it in the future. I have therefore decided to start a "trading journal" in which I will describe trades taken using this system. I will publish a demo account statement using mt4stats in which I will include the updated performance of my manual trading.

In order to avoid saturation of the blog for people who are not interested in manual trading I have decided to keep the journal as a text file on an ftp. This file can be downloaded at ftp://fxreviews.exavault.com (username : journal, password : trading )and it will be updated with notes on the trades I have taken, the reason why Ive taken them and analysis on the outcomes of trades that went the wrong way. With this, people will be able to see the logic I use when trading and why it may be wrong or right. You will also be able to see the way in which I handle money management and how I carefully select my TP, SL and lot size to adequately manage my risk.

I use this trading system in a long term fashion so you may see that I usually open 1-5 positions every month. I also rarely have more than one position open at a time and sometimes it may take even two weeks for a single position to close depending on the actual targets I may set.

For all of you to know, I trade this system using renko charts which provide much cleaner charts with a strong reduction of market noice (as far as support and resistance goes). I wrote a post a few days ago with a video on how to accurately display renko charts on your metatrader 4 platforms. These charts can also be displayed on trade station or ninja trader for those of you who use these trading platforms.

If you are interested in this system please bookmark this page and check the demo statement/trading journal at least once each week, this way you may be able to follow my analysis and better understand my trading decisions. If you would like to learn more about automated trading systems and how you can profit from them with real profit and risk targets please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !
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FAP Turbo Forex Expert Advisor Unbiased Review

During the past few months, the new commercial ea FAP Tubo has risen from the ashes of a former forex expert advisor. I have to say, I am amazed at how well these guys marketing tecniques work. I could not find a single unbiased review on the internet for this expert advisor. Every site I entered had the same "template" review with an affiliate link at the end. Come on ! I try to think that people that want to get into forex trading are not stupid at all.

Of course, their website is like every other super commercial forex product website. It is filled up with "evidence", testimonials, arrows, circles, etc. The things they show you actually seem believable and they have a great tongue for talking about "live testing" and "back testing" and how you should look for live testing and so on.

Well, reality check my friends. I will now try to tell you what the real deal with this expert advisor is and the things that should have made you ran away from their website in the first place. I will assume that everything they show is real evidence and I am going to ellaborate from there.

First things first, it is not difficult to make money in the forex market, even on a live account, in time periods as short as the ones shown by the fap turbo website. For the sake of clarity, any scalping expert advisor with a wide stop loss or a martingale system that trades frequently can and does show amazing profits in time periods as short as the ones shown in their live accounts. The catch ? Keeping those profits is an entirely different story, these type of systems are doomed to eventually wipe out there accounts. This is a statistical fact, not something I am making up right now.

Second thing, why would the fap turbo team not give investor access to their live and demo accounts ? My best guess is that they would not like you looking at the exact way in which this ea actually trades. How does it trade ? Well, it has two systems, a scalping system and a "long term" system for the EUR/USD.

Now it is time for a big laugh, the scalping system uses a 500 pip stop loss. This means that your win to lose ratio is awfuly bad. Losing a few trades is enough for wiping several dozens of winners. Of course, it could in fact win 95% of the time, which does not mean it is profitable at all if on the 5% of trades it loses, it wipes the account. This of course, cannot be seen in backtesting which often favors scalpers because of one minute interpolation errors. Their other system is quiet similar to the one I discussed when I revied forex autopilot, so feel free to look at that post.

Well, I cannot say that the fap turbo people are dishonest or that they are aware of their systems possible flaws. What I am saying is that I would never ever buy this piece of software as it is clear for me (in my humble opinion) from the beginning that it is doomed to lose because of its trading methods. I think that their website shows a very clever selective display of information which clearly shows people what they want to see, how they want to see it. If they were ever serious about the profitability of their product, they would provide investor account information and not try to sell it before a year of live testing.

On another note, there are cases in a few forums were people are finding out the real way in which this ea trades and the truth about its risk to reward ratios, please google this forums and look at other peoples experiences before deciding to buy a product of a marketing website. Now, if you would like to learn about more free and commercial expert advisors I have tested and reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !
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Too Good to Be True Why it is Never True

Yesterday while I was searching some forums and reading the comments of the posters I came across a conversation about the very traditional saying "if it is too good to be true, it probably is". As I read more I saw some very interesting aspects about the way in which the conversation was being carried out, specially the opinion of one of the debaters who was against the hypothesis claiming that is was nothing but mediocre and destructive to a person with an "achieving" personality. Today I want to write a post about my opinion about this "too good to be true" issue and how I feel it is a very valuable piece of common knowledge based on hundreds - or even thousands - of years of human experience. In particular I will discuss its relationship with automated trading and why it is extremely importance in this field
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First of all, we need to understand the nature of this timeless phrase. Why does it exactly mean and what is the power behind it ? What do people mean by "too good to be true" ? Generally this sentence speaks about the overall human experience in the sense that it reflects the expectations of the general public. When someone tells you that a certain endevour sounds "too good to be true" it means that you may be drastically underestimating the efforts or the actual real possibilities of doing what you are intending to do.

As a clear example, imagine that you lived in the 19th century and you told someone "I will be building a machine to fly in one week". They would tell you that it sounds too good to be true and the actual truth is that you would have found the endevour much more time consuming and difficult than what you originally thought. It is worth noting that the saying does not necessarily limit the possibilities of what can be done but generally the manner in which things can be carried out meaning that if something that was "too good to be true" could be done in that way, you wouldnt be the first person doing it and it wouldnt be too good to be true after all, because it would be true.

So how does this all apply to automated trading ? It applies in a very simple way. If it was possible and so simple to turn 500 USD into 1 million in 5 years, then it would have already been done and it wouldnt be considered too good to be true. However, since achieving this extremely high capital returns isnt something which is being done by the worlds top traders or trading organizations (or anybody else for that matter... if you have an example in automated trading I would absolutely love to hear it) then it simply falls within this category with very good reason.
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Is living from automated trading too good to be true ? The fact is that if you are thinking about placing a robot on a trading platform and letting it to work like an ATM for you then it certainly is too good to be true. Othewise dont you think that the thousands of people who have learned about automated trading would be living from it right now? The reality is that most of these people are actually not making any income from automate trading but they are losing money trying to achieve the situation which is just "too good". However - as I implied before - this does not mean that living from automated trading is impossible, it merely signals that the way most people are following is just wrong. Living from automated trading is possible but the truth is that it will require a LOT of study, a LOT of work and MUCH more capital that what you have been told and - not surprisingly - it is not something everybody can do; it is a long journey filled with frustration and hard work which - alike most non-luck based roads towards wealth- is simply not travelled by the vast majority of people.

In my mind, I dont think that the "too good to be true" saying is intended to be discouraging, mediocre or destructive - on the contrary - I think that it is meant to be protective as it certainly points out that the roads towards wealth exist but they are not short and they are not easily travelled. In the end there is nothing special about you or about me and if the easy ways to achieve massive riches in automated trading were really a reality, we would have both achieved that goal without any effort a long time ago (and therefore it wouldnt be too good to be true either !). In reality the best thing you can do for yourself is to find out what can be realistically achieved and put all your hard work into. Forex automated trading - as I have said several times - is not a gold mine for you to avoid work and sit on a beach to drink Margaritas all day. The journey is far harsher and demanding than your average 9 to 5 job, but so is the end much more rewarding.

If you would like to learn more about my perspective in automated trading and how you too can build systems with realistic profit and risk targets which use sound trading tactics to profit from the market please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Broker Conspiracy Theories Are they True

If people new to forex trading have anything in common it is the overwhelming belief in the broker conspiracy theories. Ask ten people on their road to become successful traders about what they think regarding forex brokers and they will tell you that the main reason (or one of the main reasons) why they cannot profit as much as they want is because their brokers "play with them" in such a way that trading profitably becomes impossible (or much harder at least). The reasons why there is such a widespread belief in the broker conspiracy are many but the real question to ask is, is this conspiracy real ? Do brokers willingly play with their customers and mess with their execution and accounts in such a way that profitability is removed ? On todays post I will talk about these issues, giving you my opinion about the broker conspiracy theory and the consequence this has on your trading.

You have just bought your first extremely profitable scalping system, simulations show great results (although they are unreliable for this type of systems), your demo account shows great results and you are ready to jump into a live account with your first forex broker. You open up the account, fund it, get your VPS and start to trade your EA only to notice that your demo and live accounts almost never agree and your demo account is taking almost twice as many positions as your live trading account. Upon checking your live account you see a lot of spread widening, re-quotes and slippage that makes you think : the rumors were true, my broker is messing up my execution.

To tell you the truth, I do not believe in broker conspiracy theories because it is not in the main interest of a broker to harm their customers performance due to the fact that they make money from the spreads and this means that the longer it takes for a customer to lose their account, the more money they make. Generally what people perceive as their broker "messing with them" is nothing but the harsh reality of trading in the real market. Sometimes if the broker is a "market maker" this may become a little bit shady since the broker may make some decisions to protect itself from quick positioning or scalping, which they do not like due to the fact that they cannot properly hedge their exposure when such small and fast positions are opened. Such decisions may include spread widening, re-quotes, etc.

I have had my fair deal of experience with people in the broker industry (well known brokers at least) reason why I can tell you that most of the things you hear about are nothing but myths. Brokers are not "evil market makers" making money when you lose money, that to me seems like a childish way of putting things such as the brokers are "the bad guys" and you become the poor good guy/gal who could only make it if he or she wasnt screwed as much by the big guys. The first thing you need to do here is to take responsibility for your profits and your losses. Forex brokers are not responsible for your opening and closing of positions and therefore the fact that you attempt to use systems that simply dont work under real market conditions is not their fault.

However I always believe that you should always work with the worst possible case available such that your trading and decisions are as robust as possible. If there is a broker conspiracy and brokers will relentlessly prosecute and make certain systems (like scalpers) totally nonviable then you should focus on trading a system that is shielded from the power your broker has over your trading. Certainly it would not be very intelligent to trade a given system that you know depends greatly on execution variables your broker controls. If brokers do seek to make traders lose, then why in the world would you want to make it easier for them ?

In the end, if you profit or if you dont depends entirely on the decisions you make. If you trade systems that are very vulnerable to your brokers bidding then you will fall prey to the problems of real market execution and - if existent - to your brokers endless hunger for new traders flesh. As I said before the key here is to take responsibility for your trading and find systems that will allow you to trade with the smallest degree of dependency on live execution variables. Systems that trade in the medium or long term which do not have small take profit and stop loss targets will make you "immune" to any conspiracy since your broker will not be able to control your trading through the manipulation of execution variables.

However it is interesting here to note that I have never heard a profitable trader complain about execution related problems as a "broker conspiracy" since experienced traders know that this is a characteristic of the real market and that being successful despite their existence is one of the jobs YOU have as a profitable trader. It is irrelevant if these problems are or arent caused by your broker, if they are there and you want to be profitable then make your trading style such that these problems will have a small effect on your account balance. If you are suffering because of execution issues you should know that your trading style is what gives them the room to harm your wallet.

If you would like to know more about automated trading system development and how you too can design likely profitable trading systems please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
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Forex Expert Advisors Forex Cash Detective an unbiased Review

I often read and go through a lot of expert advisors websites with all their absurd claims, marketing techniques and poorly made points and I have to say that I am no longer surprised by the large amount of systems out there that follow this scheme. This makes me worry everyday a little more about all those out there who are looking for truly honest opinions about these systems and this is the main reason why I try to review most systems that you guys tell me about. Today I am going to focus on the Forex Cash Detective expert advisor.

The website is pretty the usual stuff, which I have said many times, does NOT make me judge an expert before looking at its actual trading evidence. I never judge an expert based on the website or what the website says, I judge them by the evidence they portray and how what the trading statements actually say about the systems logic and the amount of market exposure and risk it will put on your trading accounts.

Now, this system is one of the most bald faced I have ever seen and for this reason I decided to take this guys claims (at the end of the webpage) one by one and tear them apart. According to the creator this are the characteristics of his system :

Hand you the keys to the kingdom - my personal proven, time-tested, and cash-generating trading systems, strategies, tactics. -> This is a total lie since there is no proof about this in the whole website. There are no live testing statements that backup such a claim. I mean, we are not stupid and we can know that if there are no accounts showing profits and draw downs there is no way in which you may have made it "proven and time-tested". If it is really that profitable, the creator would be glad to show us the statements. Guess why he is not ?

Show you exactly how to potentially earn hundreds, even thousands of dollars per trade...-> Probably more tell you how to lose thousands of dollars per trade. The word "potentially" says it all, I also can tell you how you can potentially make a million dollars in a casino. This statement is just misleading.

Practically force you to earn an easy, consistent income from forex trading - even if youve never traded before...-> This is total non sense. If you have never traded before and start using an automated trading system you dont understand, you will probably wipe out your account. Even if you use a long term profitable automated trading system, it is bound to happen. I clearly outline all the reason for it on my ebook.

Obliterate all emotions and eliminate all the guesswork from your trading...-> This is a good one ! Automated trading has AS MUCH or much more emotions to it than regular manual trading. People seem to forget this since many EA sellers mislead them this way. I also explain on my ebook all the psychological aspects of automated trading and the toll they will take on you as a trader !

This hands-off, consistently profitable system will puts cash in your pockets, every single day...-> This is a terribly BOLD, UNPROVEN statement. How can he say this if there isnt a single trading statement that can show profits everyday showing that these claims are true. He is just saying it for the sake of it, something which is obviously not true. It is not proven and there is NOTHING on the website that backs this up.

As you can see, the forex cash detective system is just a bunch of hype with absolutely no proof, just a bunch of graphs which as far as we know can be simply made up using the trading platform. Again, I know and I understand that it is very easy to be misled in the world of fx automated trading with all the sweet words they put on your ears, but again, you have to be very careful about the systems you intend to buy and how you evaluate them.

If you would like to learn more about how to evaluate expert advisors and what characteristics you should look for in a long term profitable trading system please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed this article !
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Ebook to be realeased soon !

I have been writing an ebook concerning expert advisors. The ebook will be available at a price between 10 and 20 USD, it talks about a few subjects. Ways to distinguish profitable experts from unprofitable ones, also reviews 10 very popular commercial experts advisors based on forward testing results and also talks about main expert characteristics and ideal expert advisors amongst other subjects. Stay tuned for the release !
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Representative Bias

Happy New Year 2011! Hope this year is another fruitful year for our local stock market!

Today I’ll continue with last week’s topic on behavioural finance. Today I’m going to talk about “Representative Bias”. Representative bias refers to the human bias in us that we often stereotype certain things with similar characteristics with similar outcome. For example, whenever we see a beggar, he or she must be poor, that’s our first thought. However, there are cases where some of them live in big houses! Another example, bad drivers – if you see a bad driver, it must be a lady! So all these are stereotyping!

When this theory applies to our stock market it becomes like: politically linked stocks but no profits, buy! Because it sure goes up! Datuk so and so’s company – buy! He usually “goreng” his own stocks! Hence we tend to stereotype the stocks with similar nature such as traits like politically linked or owned by some famous VIP, their stocks usually can soar very high, and we neglected other important facts about those stocks!

The outcome of this type of investing style is that you’ll see your own profit going through big ups and downs. I’m not saying this is wrong, in fact when it comes to investing styles, there is no right or wrong strategies because different individuals with different risk preference and resources, will choose the strategies that suit them most. But however, if you are a value investor, this may not be the right style for you because value investors focus on the true value or the intrinsic value of the particular company.

Investment is an art, not a science. There are no fixed rules, different market condition you’ll employ different strategies, but no matter how you invest, you must have some basic principles. The main difference between rules and principles is that rules refer to some detail fundamental and technical analysis such as financial ratios and technical indicators. However, principles of investment refer to the bigger picture of investment, it guides you what you are going to do with your investment “as a whole”. For example, must diversify your portfolio, must not invest with borrowed money, and so on.

Hence, the next time you want to buy a particular stock because of its superficial information, make sure that you are just diversifying ‘some’ of your money not ‘all’ into it!


Happy investing,

Pauline Yong
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Investment Lessons

In February 2010, Personal Money, one of the leading financial magazine in Malaysia interviewed me on how to be a better investor. In order to help more young investors to know more about share investing, here, I would like to share with you part of the interview contents.

Personal Money: "Personally, how did you learnt to be a better investor? What are the experiences that you went through (mistakes you made) that taught you the “better” ways?"

Pauline Yong: I had some rough rides before but I’m glad that I started young as those experiences help me to become a better investor now.

The first lesson that I learned was back in my high school. One of my school teachers was an ex-broker in stocks, so he liked to talk about shares in our class. Under his influence I bought the first stock under my relative’s account. I had no idea what the company was doing and I didn’t bother to find out either. Then I went to overseas for my education and when I came back the value became less than a third.

So lesson No.1: Never listen to rumours. We should do our due diligent.

Subsequently the 1997 Asian financial crisis was another great lesson in my life. It was in 1996 that I just graduated from university and I received RM10,000 from my father as a gift. As a young and eager finance graduate I opened a trading account and started investing.

I invested all my money into three counters, all construction related as they were enjoying the economic boom during the “Four Tigers Era”. And soon the Asian financial crisis struck, there goes my investment. At present, one of them was de-listed, one was sold at break-even and I’m still holding the third counter at paper loss.

Hence, lesson No.2: Never invest all your money at once. We should invest in stages; and

Lesson No.3: Never invest all the money in one sector. We should practice diversification.

After all those hiccups, I was not discouraged at all. In 1998, I kept buying and I have learned the most valuable lesson in the stock market.

Lesson No. 4: It’s a cycle – what goes down will come up; and what goes up will come down!

I bought Public Bank at RM1 and sold at RM3, I bought Public Bank again at RM2 and sold at RM4, I did that to other stocks too - “buy low, sell high”. This strategy works very well when the stock market is on an uptrend.

As I was getting “hooked” on the “buy low, sell high” game I discovered the next lesson:

Lesson No.5: Do not over-trade as it will turn us into highly emotional.

I realised I was very emotional, I suffered from heart palpitation and nervousness as I was always guessing the next move of the market. That was not investing, that was speculating! Emotional investing will turn us into a loser in the long run.

It all boils down of being a better person. That means that you should improve your attitude because it does reflect or influence your performance in share investing. Don’t be afraid of making mistakes, mistakes make us grow. What is more important is to foster a positive attitude which makes you decide things objectively and to control your negative emotions better.
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Where Are We Heading To

Where is our KLCI heading to?

Everyone is asking this multimillion dollar question!

In order to answer this question, we must first look at the S&P 500 chart, as that will determine our market in the near term. According to the above chart, we are at the cross road whereby the S&P is below the 50 day moving average but was supported by the 200 day moving average. This spells some uncertainty over the market in the short term. Now we have to observe for the next 2 weeks whether we can stay above both 50 day and 200 day moving average, if yes, it means the bull trend continues. However, it S&P 500 breaks below these two moving averages, it means we have the "death cross", which is bad news for our KLCI as well.

Of course, we must not forget the Greece re-election is around the corner, this Sunday, as all eyes will be on the outcome whether the New Democratic Party (New Democracy, in support of the euro zone) and the radical left-wing coalition (Syriza, left-wing, opposed to rescue) will win?

Happy investing,
Pauline Yong
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Forex Expert Advisors Forex Infinity Pro an Unbiased Review

Yesterday we saw the release of the "latest" in expert advisors with the arrival of the forex infinity pro automated trading system. Since this EA has just come out I decided to dedicate todays post to its review with the hope that people will find an unbiased opinion on this trading system (really hard to get an unbiased review when this people offer a 58.20 USD per sale affiliate comission). As always my review will focus on the claims made by the authors and their ability to test them through the evidence they provide. After analyzing this evidence against their claims I will then give my opinion about whether or not this expert advisor is worth buying or testing.

The forex infinity pro website, just like most websites out there targeting to cell expert advisors, is filled with hype and non sense aimed at the attraction of new and inexperienced forex traders who are probably just the average Joe trying to catch a break from his or her current financial situation. The claims made by the forex infinity pro authors are nothing short of imprecise, outrageous and misleading. For example, this people claim that the expert is able to generate anywhere from 400 to 900% profits in trading.

Now, all these profits and great results are of course, as you would expect, a result of backtesting. The backtests are also something worth mentioning, they are absolutely precarious with only 5 month testing periods, this of course, hints that the EA didnt probably give such a "nice" equity curve during the past or following months. The authors claim the EA works under "every market condition" however, they never show the expert being tested in a ten year period in which a considerable number of different market conditions did happen. Backtesting however is absolutely meaningless in this case because the forex infinity pro authors do not provide long enough live tests coupled with backtests that we can use to see if the expert is or is not backtesting consistent.

This trading systems description made me laugh. The statements are totally misleading, they dont say anything. Like, "advanced risk protection", what does this mean ? Nothing ! advanced does not necessarily mean good and conservative, it just means nothing, for what I know, advanced risk protection could be anything. How about "built in money management with loss prevention" and how does it prevent the loses ? This also does not mean anything. For example, having no stop loss is a loss prevention mechanism and it will totally wipe an account in the long term.

The people at forex infinity pro do the same thing EA sellers have been doing for the past year, they are treating us like we were retarded. They are screaming this outrageous claims they have no solid evidence to backup, they are saying their system works on every market condition when they dont have any evidence to show it, well, according to my review today, the forex infinity pro falls just into the old bucket with all the other expert advisors that arent worth a penny. If they want to change my opinion, they are welcome, show me a 9 year backtest from 2000 and a six month live testing statement showing consistency with backtesting and I will test this EA myself. Meanwhile, we all know the reason why this evidence doesnt show.

Again, this forex infinity pro is, in my opinion, totally NOT worth buying or testing. If you would like to learn what has to be done to have a really profitable expert in the forex market and what profit and risk targets are truthfully realistic please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !
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