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 !
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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