What to do…

Just a quick reflection that for the past two months basically all scalpers seem to have been doing very well. I’ve re-enabled some old favorites, like FAPT50 and Forex Shocker 1.1 trading EURGBP and they’ve been doing very well. Even GBPCHF by FAPT50 have been very nice. Just watch your risk exposure, calculate the maximum you want to risk in a trade and then all EAs (possible) trades together. It is very easy to keep increasing the lot sizes in periods like this when everything is going great, leading to more risk that you actually want to take.

July at JadeFX, my main scalper account.

As you can see above July was great at JadeFX. 38% increase and just one day with negative pips (33 pips lost). The best day gave 125 pips.  All trades are by scalping EAs.

I found a great (old) article about getting optimal data for backtests in MT4. I personally usually use history data from JadeFX because that’s the broker I, mainly, use scalping strategies at, but it is full of errors and rarely gives even 90% quality.

Check it out: http://eareview.net/tick-data

I’m gonna test this as soon as I get a hour or two over… IE hopefully on Saturday.

Just a short recommendation if you like MQL4 programming or at least running long optimization runs in MT4. Join the private “elite” section of Funyoo’s forum over at tradingsystemsforex.com. It is $99 per year and gives you access to a section on the forum with over 280 different EAs. The huge number is both a great thing and the biggest problem with the forum. There are actually too many to handle. Many are made by Funyoo on request by members and never make any profit, but there are a few really good ones actually.

I’ve been a member for two months  and my poor CPU is working hard on optimization runs all the time now

Are you interested? Seems to be some openings in freelance MQL4 programming. The funny thing really is that these guys want you to do all the work; including coming up with the strategy, implementing it, writing the manual, providing snapshots of trades and even making a video of a live trade. Then they proceed and make a fantastic website with the usual bullshit and set a $99-$499 price I guess.

This one is even better I think. They just want nice backtests. No mention of that the strategy should work for live trading. Perhaps nice backtests is all you need to sell a few copies… I actually have a strategy that backtests extremely well, but can’t make money even in demo trading. Perhaps I should sell it

I check the MetaTrader / MQL4 listings at Freelancer.com now and then. I could actually see myself taking smaller assignments (say 8-20 hours of work), but so far I haven’t come across anything interesting enough to bid on. Ideally I’d like to make implementations of already manually tested strategies / systems or implementation of indicators. Generally I think the pay is low for this. If you want a decent $/hr ratio you really have to stress the implementation, it won’t be high quality. There seems to be a lot of “low cost” countries represented in the bidding thou, for a Chinese programmer $400 is a big deal of course.

I haven’t really been paying to much attention to all the hoards of EAs released this spring, especially not scalpers, but this one really caught my attention by showing extremely good performance in scalping exotic pairs (like GBPCAD, CHFJPY and others). It is called Primeval EA and is actually a collection of strategies, but personally the scalper is what I’m interested in (there’s also a hedger, gridtrader and some kind of martingale strategy. They might be alright but the scalper is on fire).

There’s tons of backtests on the site, that obviously look good (why would anyone publish them otherwise?), but there’s also verified accounts at MyFXBook (2 demos and 1 live account at FXCBS).

Here’s the live account: http://www.myfxbook.com/members/primevalea/primeval-ea-v21-live-fxcbs/34374

Yeah it has made 45%, but the drawdown is a bit to much for my taste. I would lower the lotsize to 0.1 or even lower with this small account. But still, the pips taken is impressive and the maximum loss is survivable (38 pips, the SL is set at 36, but I guess there was some slippage).

The demos are doing even better, which is sad of course, but very common. Blame the brokers for not offering fair demo environments.

http://www.myfxbook.com/members/primevalea/primeval-ea-v21-fxcbs-demo/34377

http://www.myfxbook.com/members/primevalea/primeval-ea-v21-alpari-uk/34379

What are the downsides? Well, it is a scalper. They tend to work well, bring steady profits and then brake down now and then. It has happened with all other scalpers I’ve tried. But with proper risk management this can be handled of course. A good thing with this one is that it trades so many pairs profitable, which brings down risk somewhat if one or two stops working. But like most of us know, many pairs are quite correlated and a stoploss in one pair seldom comes alone.

The other downside is the price. It is $600. Yeah, four to six times the usual $99 - $149. But, really, if it keeps performing this well, it is worth it. There is a 45 day money back guarantee (and since it is a Plimus product it is very likely that you actually get your money back if not satisfied, that has been my experience with some priors at least).

So, I’m leaning towards a buy. I’ll keep you posted of course. If anyone else takes the plunge, let me know.

Check it out. Primeval EA.

Update: Oh yeah, you can use it on 2 live accounts per license, which is a added perk of course (and suits me great, I would put them on my existing JadeFX and The Collective FX accounts.)

Seems MetaQuotes is going to run their championship (ATC) again this year, now on the new MetaTrader 5 platform exclusively. It will run from October 4th to December 24th and it is possible to register already. They will host and run all EAs at their servers. There will be prizes for $80,000 in total.

So why is this competition better than the awful Forex Robot World Cup (FRWC) that some affiliate spamsters organized this winter? (I warned you about it before hand). Well, MetaQuotes is doing this to promote their platform, not to get access to EAs to sell for profit after the competition. That was the main reason to run the FRWC of course. Oh, and as I predicted the EAs that performed best during the two month competition have failed since. This is really the problem that I see with the ATC also, it is too short. Sure it is a few weeks longer than FRWC, but it is still too short to give any significant results. I would have loved seeing a 6+ month competition. That would weed out all the boom-bust strategies and perhaps reveal some more stable ones.

None the less, I will try to enter the competition. I have just started experimenting with MT5, but I must say I like it a lot as of yet. MQL5 is refreshing and the Strategy runner in MT5 is so improved it hurts whenever I go back to MT4 to test a EA.

Check it out: http://championship.mql5.com/2010/en

Alpari UK have launched their MT5 demo platform recently, check that out too: http://www.alpari.co.uk/en/cnews/show/id/570/

A while ago I got a bunch of books from Amazon that I’m currently going through. I just finished a real page turner that I definitely recommend to anyone, even vaguely, interested in financial trading. It is the story of Long Term Capital Management (LTCM) and the people behind it, a lot of professors, MIT graduates and even two Nobel price winners (every Swede knows that Alfred Nobel didn’t consider Economics a real science and that the prize in Economics really is given by the Swedish Riksbank in memory of Alfred Nobel, and not by the Nobel Committee itself). What I find the most interesting is the belief that these guys had in their models of the world and that markets are rational and efficient. This lead them to take risks that were hard to understand and quantify. Essentially they never closed positions for loss, they waited til they reversed and showed a profit. They could do this for a long time because they had large sums om money and could get loans from a number of banks.

I find myself in the same situation (but at a much smaller scale of course) with the range trading strategy implemented in my Green EA. The strategy and model was based on a currency (or whatever really) that traded in a defined price range. Both currencies I traded with the strategy, AUDNZD and EURCHF, had been confined in a range for over 10 years when they both broke out at almost the exact same time this spring. AUDNZD reversed back into the range (within safety limits), but EURCHF is currently about 1400 pips outside and really shows no signs of reversing. Had I let this roll all my accounts would have been destroyed now (just like the demo that I haven’t interfered in here).

The same happened to LTCM. They traded a lot of different instruments (focus on bonds) in a lot of different regions, that normally hedged each other. Anyway, I don’t want to give away the ending. Read it yourself

When Genius Failed: The Rise and Fall of Long-Term Capital Management