I’m very new to all of this…but I’m already becoming facinated with the Forex and EAs in general.
Regarding Forex Megadroid,
I’ve seen the hyped ads, but they do claim great returns every year back to 2001 or thereabouts. I’ve also seen sites that compare and rate EAs, but these “objective, non-partisan” sites might have been created by an EA manufacturer…e.g., Megadroid!
95% successful trades? Really?? Does anyone believe this?
Is there a place I can see how it does weekly? With the settings used? Actually, I’d like to see how it does daily…but I’d settle for weekly.
How much drawdown? I haven’t seen anything.
It seems to me if all of this was true, EVERYBODY here would be using it…talking about it, etc. But looking through these threads, it’s not headline news.
Achieving 95% winning trades is actually very simple.
Spend the next 6 months trading this system, and you’ll see just how easy it is. Whenever you feel like trading, toss a coin, if its heads BUY, if its tails sell.
Set a 10 pip profit, and a 200 pip stop loss, or a 5 pip profit and a 90 pip stop loss. Take 200 trades and come back and tell us your win rate, there’s a good chance it’ll be greater than 95%. So you just achieved a 95% win rate just by knowing nothing, and tossing a coin !
If you then actually restrospectively analysed those 200 trades you’d know everything that you’d ever need to know about trading and you wouldnt need an EA, but thats another story
If you look at the average profit being achieved by this EA its less than 6 pips, and at times they’re using 180 pip stops. That’s why it has a 95% win rate, something would be seriously wrong if it didnt. It needs at least a 97% win rate just to break even
The problem is, one stop of a 180 pips, wipes out the last 30 trades gains, 2 losers in a month and you’ve lost the gains from the last 60 trades.
The nice thing is losses rarely happen, consecutive losses are even rarer, and by the time the inevitable happens and people start losing in large numbers, the time in which refunds are honoured will be long gone, and the developers will have moved on to their next idea. Its a great business model.
Woah, and thank you! I’ll have to re-read what you wrote a couple of times…this isn’t second-nature to me yet.
Btw, I just looked at their data on their main site. In 2010, looking at just two random orders, one order size was over 12% of the account balance…the other was over 14%. Man, I don’t know if I have the stomach to put down 12 or 14% of my account on each trade…and sometimes more than one order is open. I suppose they do this since they’ve got this 95% win ratio. But 12%! 14%!!
But then again, if you ran this thing as shown, you would have made a lot each year. Right? Is this still true??
EDIT: Looking at just a few trades again, it looks like their S/L ranges from about 50 to 120 pips. TP is around 15. And about 5 big losers each year (from 4K to 19K in 2009, all around 12K in 2010…but less than five this year I think). But all those wins in the thousands…they really add up.
Glad you picked up on the problem with the rather excessive risk. Of course the more you lose, the harder it is to dig yourself back out of the hole, if you lose 20%, you need to make 25% to get those losses back, lose 50%, and you have to make 100% to get the losses back ! Thats the main danger of using excessively large position sizes.
There are also all sorts of very subtle problems that arise from EA’s that employ these kinds of risk to reward ratio’s, if your interested take a look at optimal f position sizing, and see what can potentially happen when position sizes become too large.
The important thing to understand is the concept of mathematical expectancy, its not about win rates, its just about how often you win, and how much you win, versus how often you lose, and how much you lose. In theory it is possible to have a very profitable system from a method that only win’s 10% of the time, with loads of small losses, offset by the occassional very large gain.
Markets are fairly evenly balanced, but the spread tips the balance in the favour of the broker. On top of that, psychology tends to sabotage most people, and they generally do the exact opposite of whats actually necessary, so they refuse to accept losses, and those losses tend to get larger, or they grab rewards far to quickly in fear of gains evaporating away. There’s also a huge problem of traders developing unrealistic expectations fuelled by the most ridiculous claims of people making thousands of pips per week, and rarely losing etc. If you do a bit of maths you’ll see just how ridiculous these kinds of claims are.
The truth is that you dont have to tip things very much in the opposite direction to make very considerable gains over time.
Yes, I totally agree. From reading here, I’ve seen advice to limit trades to 2% of the account.
There are also all sorts of very subtle problems that arise from EA’s that employ these kinds of risk to reward ratio’s, if your interested take a look at optimal f position sizing, and see what can potentially happen when position sizes become too large.
Yes, I want to avoid these.
The important thing to understand is the concept of mathematical expectancy, its not about win rates, its just about how often you win, and how much you win, versus how often you lose, and how much you lose. In theory it is possible to have a very profitable system from a method that only win’s 10% of the time, with loads of small losses, offset by the occassional very large gain.
Yes, this makes sense. But then again, those guys get great yearly returns…hundreds of percent profit each year. Going through the backtesting…I’ve seen around 3-4 month’s profits being wiped out…but then the rest of the year made up for it and went ahead. Knowing me, I’d be checking on my balance several times a day…and risking that much would drive me nuts.
Markets are fairly evenly balanced, but the spread tips the balance in the favour of the broker. On top of that, psychology tends to sabotage most people, and they generally do the exact opposite of whats actually necessary, so they refuse to accept losses, and those losses tend to get larger, or they grab rewards far to quickly in fear of gains evaporating away. There’s also a huge problem of traders developing unrealistic expectations fuelled by the most ridiculous claims of people making thousands of pips per week, and rarely losing etc. If you do a bit of maths you’ll see just how ridiculous these kinds of claims are.
Yes, I set up a demo acct on MBTrading using MT4 and I have the psychology of the masses at this time. The price action was just jerking me around by the nose! I just don’t want to sit and make decisions like that…it’s too much stress. That’s why I want an EA…something that trades 2% of my account at a time…perhaps only one order open at a time. So if something goes wrong and a stop isn’t executed, etc., I’m only out a little.
The truth is that you dont have to tip things very much in the opposite direction to make very considerable gains over time.
Yes, you mean one can go for a much lower win rate and still make money consistently right? Do you trade with a commercial EA? I’m still playing around with writing one…it works so-so (only backtesting now). But then I see these ads for Megadroid that might pay for itself in a week or two with a little account…and maybe I could define the max % order size and use that.
Besides the large S/L and small TP, does the “guts” of Megadroid contain a good strategy? Maybe one can modify the S/L, TP, and % order size and still have a decent EA.
The replies to your question in this thread deal in generalities and conjecture.
Go to this thread which has actual users of MGD and read it if you haven’t already.
Check the Real Money Accounts Competition at forex-robots.com, the Megadroid it’s really reaping the market. It seems to me that they found a solid robot finally.
Best,
It is been one of kind best in the time stipulation as it uses just 1 hour time frame to trigger the entry unlike the others had take 1 minute entry point.
This means instead of trying to take a trade every time, it acts like a predator waiting patiently for its kills.
Among all the forex robts this one had the highest winning robost as far as i am concerned…because of its above mentioned feature.
The results so far had proven that this strategy is worthfull and works well in all conditions
Forex Megadroid Forex Trader is a good tool to diversify your current trading portfolio.
First, MD does not use the SL that it shows on the screen. It looks like a 4 or 5-1 SL to TP but it is not. MD looks at time in the trade vs gain/loss and will close orders at any time. The entered SL is only to prevent stop hunting and give an emergency stop.
It is not always right and I have been through 10-20 trades that were down 10-15% and recovered for break even.
Second since it only trades in the overnight quiet time, there is very little volatility.
I have been trading it since April, live accounts since June. Honestly it made me very nice money for May-July. It did hit a big loss in August and I am back to where I started.
You may be right. Many people feel that over time you will never win with robots. Close to 200 trades and my experience has been consistent with the MD claims so far and assuming the thing recovers with the Fall, I remain positive on MD.
I would be interested on your take on the Martingale side of Megadroid. If you leave Recovery =ON it will double down and increase trades to recover a loss.
I have seen it do this well. I have argued with a friend that Martingale, though dangerous in Vegas, works fine in the case of Megadroid, since it does achieve 95-96% winning or at least break even trades.
They do, watch before you talk man. They have Real Money Accounts and you can log into them so they’re not fooling anybody. On top of that just check the Funnel account it was the winner until yesterday when it blew the account.
