Forex Kung Fu

Most of the EA’s we are forward testing at Forex Kung Fu are trading lower. Hopefully they turn their act around soon.

I watch with interest what is going on at the Automated Trading Championships -’Better’ EA is doing phenomenally well. I am very interested in winwin2007 - as it is a scalping strategy and the author may release the EA to the public.

I am full bore into developing a custom platform for trading Forex - it will run on linux, support the FIX protocol so I don’t have to deal with Market Maker brokers, will support the new FIX FPL standard for rapid strategy development, and bring a more rich backtesting environment than the MetaTrader platform currently offers. I have teamed up with an old friend who is very good in Math who is anxious to apply Monte Carlo and Reinforcement Learning to the Forex markets. I think it will be a lot of fun, and financially rewarding.

Will keep you posted!

I have been doing a lot of research on the best place to open a trading account and have learned a lot along the way. I need an account which is friendly to scalpers, offers very low pip spreads, and supports both MetaTrader and has an open API.

What I discovered along the way is why MetaTrader is for free - they charge the MM (Market Maker) Brokers. Why is that? Because the MetaTrader backend hosted by the broker allows the broker to manipulate spreads, and do a lot of other mischievous activity to take your money. Believe it or not Market Makers actually trade against you, a topic I will cover later.

Along comes ECN’s, or Electronic Communications Networks. These type of brokers do not trade against you, offer incredibly low PIP spread rates - they actually allow you to post your own bid/ask rate! The problem? Most of them do not offer MetaTrader support - there are workarounds available, but who knows how stable they are.

Well this works out well for me anyway - I was planning on building my own trading platform for Linux anyway. Most of the ECN’s have an API called the FIX protocol, and there are some tools available that handle the protocol level connection stability, allowing me to concentrate on the strategy and dealing with incoming pricing.

For the interim, until I get my own custom platform together, I would like to connect MT4 to an ECN with low spread rates. Anyone know a good one? For my custom platform I was planning on testing with EFX - anyone have experience with them, or the FIX protocol in general?

I have deployed CarryGrid v5 on our live testing server. I have added a link to their website under ‘EA Providers’

From their website:

Our software uses the ripples in shorter term trend to find good value positions within the longer term trend. We also look to maximise profits by holding on to the end of the wave. This system is based on a very successful but not well known manual technique that has been trading successfully by traders for some time. In addition, because the system is automated, we are able to add in additional features that only a computer that is available 24/7 can perform. We have the following in our favour.

Market direction using a custom indicator - we go with the direction the market is heading, not against it.

Swap (also known as the ‘interest rate differential’ - which in simple terms means you get paid handsomely every day of the year for simply holding a position!)

Position spreading/dollar cost averaging into positions. This EA is best run on the daily chart, and trend is taken on daily chart so we are pretty much immune to news events and the daily fluctuations barely concern us. We do not take a single position, we scale into a position with the appropriate lot size, when the price is moving in the right direction.We do allow to you run the EA on any timeframe you wish, but the longer-term the chart, the better your results will be.

With other EA systems, often they will focus on the short term trends and trade following the ripples, which brings about more risk. This would explain why many other EA’s seem to look good in theory, but do not perform as well in the long run.
Our system is the result of man-years of research & development and has been designed to work on all market conditions using this longer term method. You can start with any account size, be it a mini or full sized account. You should have some prior experience of forex trading and running Expert Advisors (EA’s).

Fx-Bandit is trading with a lead. I am beginning to believe FX-Bandit has the highest risk-reward ratio by default. CK just posted a good review of Fx-Bandit at http://ckowyong.com/blog/?p=68

The main issue both I and CK have is defining what an effective stop loss strategy entails. In that post some of CK’s readers define their thoughts on the issue. I am definitely interested in trading this EA, but I think I will be doing so with 10%-20% of my available assets until I come to an understanding of what an effective stop loss means to me. Right now the live testing done on forexkungfu with Fx-Bandit is being done with no stop loss.

Steinitz and PipBoxer have been trading plus / minus 2%.

I have written several other EA authors asking for evaluation versions of their EA’s - hopefully we can add them to the live testing soon.

No real winners or loosers today in the EA game. Steinitz released version 2.61. From his release notes:

This release is going to solve many previous issues that dealt with:

1. Power disconnects

2. Manually closing down MetaTrader platform

3. Broker disconnects

4. Changing platform timeframes and anything else that caused the robot to run an “INIT” function that disrupts the ability for data to be stored within the robot

There were 16 functions within the robot’s code that were potentially affected by the above and now are fixed because of the use of global variables that save this crucial data that the robot is producing and/or monitoring and storing it on your computers hard drive to be retrieved later if needed. This is a major improvement!

Glenn Bacon has allowed us to test his EA’s at http://www.getforexsoftware.com/ - We thank him for this and will be adding live results to the site shortly. Over the holiday weekend we will also be rolling out backtesting results. Stay tuned.

Have a good turkey day!

After I emailed Mr Henry for an evaluation copy of his EA, I quickly realized that he is a scam artist. I wanted to do some research on him and post my results for those who are interested. The owner of fxfisherman is taking legal action against him, and he has evidently stolen his EA’s from others who posted for free on message boards. I have included some links I found about him and have attached the email correspondence I have had with him. Please feel free to post comments of your own experiences with him.

Email with Rich Henry

http://www.fxfisherman.com/ #1

http://www.fxfisherman.com/ #2

http://www.forexpeacearmy.com/public/review/www.protraderforex.com

http://www.scam.com/showpost.php?p=365747&postcount=7

http://www.scam.com/showthread.php?p=394475

I was asking an EA provider today to forward test his EA. It got a little testy, and I just wanted to show an example of who you should never buy an EA from. I added a section called ‘Won’t Allow Testing’ on the menu as a result. Basically, if they don’t let you forward test, don’t trust them.

Rich,

Look with all due respect I think having an independent site forward
test your ea brings value to you - it costs you nothing. Also I plan
on investing in several EA’s myself, so it is a potential sale for
you. But I can’t justify spending 1k on an ea i can’t forward test
myself.

I understand your position and if my thoughts change in the future I
will let you know.

Brian
Reply:

It is $50 a week not 1000 dollars. And no. We will not be ever changing
policy on giving trials. Why? Internet Piracy. We give out free trials is
like closing the doors to our company. We have been in business for years
and have never given out a single free trial to anyone for any reason. We
have tons of forward testing posted and if you do not believe it, no
offense, we do not want you as a customer anyway

rich

Hello folks,

The old results have been deleted as I have moved the running copies of MT4 to a dedicated server in a hosting center. I have set up MT4 to auto-upload results to the website every 5 minutes. Hopefully with these changes we can avoid any power or internet issues.

I haven’t added PipBoxer yet will be adding tomorrow.

Brian

Results have been updated.

Fx-Bandit II had a drawdown. There is a setting for stop/loss that was triggered. Bill told me to deactivate this yesterday, but I didn’t get to it. The stop/loss wasn’t triggered in Fx-Bandit I, so hopefully those trades will turn around.

I setup Steinitz has per his instructions on 10 currency pairs. It started trading immediately on a few pairs. Seems to be a fairly polished EA. Will start posting results tomorrow.

Pip Boxer keeps chugging along - not much to report.

Hal Chapman from Double Play said he cannot provide a demo of his EA as someone reverse engineered it.

Part of the reason I hate windows: automatic windows update restarted my machine last night and shut the EA’s off - so not sure if that had a major impact.

I updated all the results tonight. FX-Bandit is trading in the red on some active trades. I spoke with Bill at length today and he says its normal behavior. I am interested to see how these trades close. He has been very responsive and I look forward to working with him. Thanks Bill!

I met Don Steinitz who has an EA that we will be testing on Forex Kung Fu. He has a very interesting history from what I have read in the manual of his EA. He seems like a really smart guy. I will be setting up his EA ‘Steinitz Has MTF’ tomorrow. He has mentioned he has an affiliate program and has offered our readers a discount on his EA. I will post the details shortly.

Pip Boxer has opened some more trades and is currently the leader at 6% gain on original investment.

It is taking forever to setup a vmware box on my webserver hopefully I can get that done tomorrow.