October has ended, Helloween has passed, yet markets continue to troll its participants left-and-right. This monthly outlook will consist of 4 parts:
- usual comparison of 25 most-subscribed MQl5 signals, as well as 2 of our own trading signals and 3 of those that our followers asked to analyze;
- discussion on our own Millionaire Signal;
- discussion on Hamster EA;
- discussion on readers' (ir)rational behaviour;
FX Sumo would like to remind its followers (and neutral observers) that we have our Telegram group, link: https://t.me/joinchat/Hpt7gUyosD5JZw-BFsVN3g
The aim of this group is to share information about various trading signals and educate its members on ways of interpreting trading statistics and financial matrices of these signals.
Here is the full-list of analyzed signals:
Contrary to the last monthly-update, general signal analysis part will be much more shorter & more concise. Reasons for that? - most of these signals have been discussed in our previous updates, there is no need to repeat the same message over and over again.
Discussion on Millionaire Signal.
Since the signal was created in this year's July, FX Sumo had never discussed in more detail the trading process behind this signal. We feel that recent events and market turmoil has forced us to bring this up.
In the period till October, the signal had managed to generate 18% growth with just 4,1% drawdown, which lead to quite impressive growth/DD ratio. This performance was based on 2 different Eas - one running on EURUSD pair, second - on GBPUSD. Each of the 2 seperate Eas individually had shown great potential in backtests, however, it was clear for us that combining these would create amazing synergy opportunities, as the inter-correlation between these algorithms is very low. Diversification opportunities here allow us to aim for higher growth levels with the same levels of risk, effectively increasing growth/DD ratio and providing more effective trading.
Backtests of the 2 current Eas are available here Our Signal.
Do we believe that we have reached the point where Millionaire signal would face only non-diversifiable (market) risk? - Nop, not really, however, we are working towards that. Before we get to the steps that we have taken, we have to discuss the events that took place through-out last 2 weeks. The way we see it, market risk hit many trading strategies off-guard, including our own. Godamn troll market - that's what You get for not celebrating Halloween and not giving some local wanna-be-american kids candies, all of this nonsense gets back at You.:/
In the last 3 updates FX Sumo did state that there were risks of experiencing higher DD and now we reached it . When one of our followers first brought this up, we had open buy positions on GBPUSD -> market was crashing, our first GBPUSD trade was ~300 pips in minus, yet our DD stayed below 5%, had no real problems with that. The start of November and this crazy reversal did 2 things for us -> allowed to surprisingly fast exit from those GBPUSD longs, but at the same time new short-trade basket was opened on EURUSD. For those wondering, both of the current employed strategies are chosen not only because of their individual results, but also because their results have very low correlation, thus, provide great diversification opportunities -> in the result, we were not surprised to see EURUSD and GBPUSD trades on different directions. For EURUSD -> grid cycle was opened, and we experienced this abnormal movement upwards. In the asian/Oceanian session of 1st November EURUSD rose by 80 pips -> at that moment our losses on EURUSD shorts and GBPUSD longs were the same, total DD was below 3%. for the next ~30 hours both EURUSD and GBPUSD continued to skyrocket without any meaningfull corrections -> these were not normal market conditions, and these led to close-out on GBPUSD trades and massive problems on EURUSD, first short-position being ~170pips in minus. looking back, 27% DD looks massive, but it is still much less than our backtests would suggest. Would we like to repeat this anytime soon? - nah, not really.
Here are the steps that we have taken since 5th of November:
- decreased risks by half on the Ea that was running on EURUSD pair. In the 10-yr backtests twice this Ea had created drawdown higher than 50%. In the result of these adjustements, recent DD level of 27% will effectively match 54% DD in backtests, therefore, 27% DD level should represent a strict not-to-be-reached benchmark value;
- for more than 3 weeks we are testing on live-trading conditions an Ea that could be added to this mix and would improve smoothness of the current results. This Ea would perform on EURUSD and USDJPY currency pairs, backtests can be seen below:
We are still unsure about the exact moment at which this will be added to Millionaire Signal, as we don't want to rush things. Either way, we are hoping that live results will be as confident as backtest simulations and this will be good to go in the upcoming weeks.
Despite our growth/DD ratio being screwed up, we believe that we have taken steps in the right direction and we encourage neutral observers/fanatics to try out our product and give their evaluation afterwards -> that's the best and most efficient way on how we can improve the quality of service that we try to provide here.
Hamster Ea - wild & uncontrolled horse.
Out of 25 most-subscribed trading signals on MQl5 platform, 6 are based on Hamster Ea. Keeping in mind that all of these combined have 1000+followers, one must ask whether the Ea behind these is as magical as numbers would suggest. Unfortunately, it is not even close.
We did state before that successfull strategy is a combination of trading efficiency and money management. While the Ea itself offers ton of first, none of its users have figured out any meaningful way how to manage its risks.
We have previously discussed Elani's signals - Turbo and Vegas. Both are as unsustainable as it gets, yet, the provider insists of dividing Your balance on 4 parts, trading with only 1 of it and use other when shit brakes lose. Contrary, if everything is fine, she advices to constantly withdraw profits and rebalance these 4 parts. The author has stated that on average this kind of trading should margin-call 1 time per month, atleast she is acknowledging downside risks. While it is clear that the author is unable to fully-control open positions, this is something.
Besides Elani, a new hot-shot has emerged with his signal being Nr1 on MQL5 platform and his signal's title says "with Risk Management". We decided to take closer look on how things are actually "managed" here:
This guy is being paid 16k per month for risk management -> sure as hell, must be a brilliant mind. Let's have a look on some of his quotes about his "management":
0 sense. in order to restore 60% lost margin, he would have to grow remaining 0,4 by 250% to regain what were lost. his maths says that, well, if You lose 60%, You just have to regain the same 60% and everything is good. as dumb as it gets. if 60% were to be lost, he would need ~3 months (not 1) with this pace to regain that single loss. fking idiot, managing almost a million in funds, yet 0 sense in basic maths behind all this.
fking troll, no other way to put it. when he will suffer losses, he is going to turn in his super-super-super advanced trading and regain everything with absolutely no risks.
Risk management our ass
With these risks and "management" behind, this trading would require ~80 pip move against him, and that's it -> 60% of Your account gone like wind. The author claims that during asian session such rapid moves are very unlikely to happen, yet these can happen anytime, just re-read Millionaire's case and EURUSD movement on 1st of November in asian session.
But wait, that's not it -> there are more bullshitery from the author, "money management review":
Cool document, the author is talking about ways of distributing profits and what not. Despite this being super agressive and risky strategy, potential of losses and the frequency has not been discussed at all. Well, who cares, right? as long as he is "managing things", right?
The final part of this article will be devoted towards comunication with readers.
FX Sumo have been providing MQl5 investors with non-monetized signal analysis for the last 6 months, yet we feel that something is missing here. Through these articles and our Telegram chat, we have analyzed more than 300 MQl5 signals, however, we don't feel... rewarded. When we say "rewarded", we dont think in terms of money; when we call out garbage signals that blow up in near future, close to nobody is appreciating our analysis. Somehow, people are mostly voicing their views when 1 or 2 of our picks experience some problems, and blaming us for... what exactly? These people don't even comunicate with the real signal authors that are being paid for these services, yet we are being seen as third party from outside, on which to put anger about incorrect investment decisions. Honestly, we don't feel that we deserve this, and all of this makes us re-consider the true value behind the hours of creating these articles.
Honestly, when we started this, we felt that we could bring an actual value to the community. We already knew that investors are irrational animals, but we thought that we would escalate critical thinking and hot-debates about these discussed signals. Have we succeeded? - Somehow, we don't think so. People are finding new shits to follow, and our view remains side-lined. We completely disagree on how an average investor treats signal providers; hell, we feel that even our own product is not treated the right way. Should we discuss this in more detail? - nah, not really, its better to have followers with some view than not having them at all. While other signal providers agressively advertise their shit products and continue receiving hell-lot-of money, we make non-monetized analytical findings, which are later used to disparage our name. In the end of the day, this just doesn't seem fair.
We are quite annoyed and discouraged, not the most positive note on which to end this. But hey - maybe that's the whole point of this. We could end this with out traditional lines.
That's all from our side. Guys, if You feel that this content brings value to both potential and existing subscibers of different forex trading signals, share our content with other investors as well. FX Sumo is here to educate and raise awarness, however, we are still building up site's recognition, and You could help us with this tremendously. If You have any suggestions or You disagree with some of the ideas, feel free to leave Your comment below! Otherwise, we would be happy to chat with You on our Telegram group!
On the other hand, out of 3000 different viewers that have read our takes in the last 1/2 year, only ~10 have shared those within MQL5/Facebook/other platforms. The more we think, the more we understand that we don't feel comfortable on how this ship is sailing. Either way, that's a problem for tomorrow.