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Forex Robot World Cup, scam or not?

February 16th, 2010

If you ever have bought a EA from anyone I’m sure you’ve already have received a lot of spam from them about the Forex Robot World Cup (FRWC). I’ve been getting the spam from FAP Team, MD Team, GridBot developers and numerous of professional affiliate marketers. I find it truly funny when for example the developers of FAP Turbo or MegaDroid spams me about other products, telling us that it is the best EA ever (much better than the one you bought from them a while ago and they still sell).

You can read up on the details on the FRWC at the site, but in short it is a competition with a $100 000 first price than was just won by a guy in Croatia with a EA called LMD Multicurrency. It made 145% profit over two months of live trade at FXCM (that apparently sponsored the event). Other EAs in the competition have been quite impressive also, like one called HiRider that placed second with a 88% gain. Sounds good right? Well…

The reason you get spammed so much right now is that the FRWC is about to sell these EAs, you see the developer had to sign over the right to promote and sell their EAs for six months to the FRWC in order to enter the competition (I can’t believe anyone agreed to this). And now they will start selling them (all I think, but at least the top 5) for $999. They’ve also combined the top 5 bots into one, called Fusion V, that made something like 350% in a month of live trading. Out of that $999 the FRWC offers 50 % (!!!) to affiliates. That is $500 per sell that is going to the marketers. Can you see now why everyone is trying to promote these EAs? The percentage is just crazy, and that $500 is much more per sell than all of them made on their own products!

So, are the bots good? Well they where during the competition at least. Several independent sources I trust have been able to log into the live accounts to verify the results. But two months really is too short of a time to state that these are profitable in the long term. I am intrigued thou. Personally I think HiRider seems better than LMD Multicurrency because it have been a consistent winner.

But what if it was just a fluke then? The two months the competition ran was the most optimal for the winning EA, during which conditions where just right. Do remember that it ran over the holiday season, when markets behave rather strange. Perhaps it isn’t too hard to find a few that performs this well, during a limited period, if you start with a large enough number to begin with (they started with 329). Remember the ScamBot by DonnaForex that I demo traded? It performed well for a while with a completely random logic.

The last time I considered buying a EA this expensive I wish I hadn’t, and I had to return it (FAP Turbo Evolution, before the FRWC this was the biggest marketing hype in the Forex online world). This time I’m quite tempted again. In the bag now is some rather impressive EAs I think, and I would have loved paying $999 for them if it was only offered to me. Of course it isn’t. So anyone can buy them and run them. If many do they will try to take advantage of the same “flaw” in the market. Since the market is adapting it will adjust to the strategy and heal the “flaw”, making the EA less profitable or even completely void. Forex is a zero sum game (or even negative sum game). It has the advantage over other zero sum games in that regular people and companies need to act in the market to convert currencies, in order to buy and sell goods abroad. This is what gives the Forex market it’s huge liquidity and it is the regular entities in the market that pay the gains to traders (and of course a lot of traders lose also). Is it really feasible you think that an EA can return 350% on its investment per month and no one of the real customers in the market will react? They have to pay these profits in added spreads because no value is created in the market.

Ah well, I’ll stop ranting. I really think this is a case of too good to be true (even thou the live performance now have been good it might not be repeatable for the coming months). But still I am tempted.

So, here’s my affiliate link. I don’t expect you to use it.

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  1. July 2nd, 2010 at 10:09 | #1
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