June has passed and FX Sumo blog is getting closer and closer to its 1 year anniversary. Most probably, there will be a special "anniversary article", which will be an extensive summary of our "lessons learned" throughout this period, but that's something for another time. Meanwhile, this article will consist of the following parts:
- valuation standards and the feedback we got from our readers;
- extensive analysis of our own Millionaire signal and its recent struggles;
- usual discussion of the MQL's most-subscribed trading signals and their qualities;
- discussion of signals that our readers proposed to be analyzed;
We encourage our followers and neutral observers to join our Telegram group, where trading signals are being evaluated and analyzed on daily basis: https://t.me/joinchat/Hpt7gUyosD5JZw-BFsVN3g
Some of people don't get the idea behind the "welcome-bot". In order for You to be accepted in the Telegram group, You have to actually type something within the first 60sec (simple "Hi" would be enough). Why? - in order to protect the existing members from spam-bots that try to enter the chat (happens a few times per day), we have created this simple "lane of defence". For some of potential group members this could cause inconvenience, and FX SUMO appologizes for that.
In the previous article (Outlook for May, 2019) we cemented the need for higher standards when evaluating trading signals. There was a general consensus (among those readers that reached out to us) that this is a step in the right direction, however, questions were raised of whether the chosen limits shouldn't be lowered. Out of the 3 newly introduced(changed) measures
- Required live history lenght increased from 3 to 6 months;
- Required live amount of trades -> 500;
- Required absolute growth%/#of trades ratio < 0.5;
second one was the one that seemed too drastic for several readers. Some of You argued that there might be some signals that trade on larger timeframes or have very strict entry conditions, resulting in lower amount of closed positions. Our answer here is pretty simple - generally speaking, we dont care.:)
No, this is not ignorance or anything. Our point here is plain and simple - we want to see that a particular signal has accumulated legit history, which would be indicative of its future results. If a signal has been "live" for 6 months, yet, its "trading activity" (measured by MQL5) is close to 0, we cannot state that it has gone through different trading environments and conditions, can we? Intuitively speaking, accumulated trading activity helps us to determine whether money management is there, while amount of closed positions indicates the consistency of returns. Should we care about times when signal is passive and staying off the markets? - nop, not really; we want to see actual decisions being made and effects these have on the total outcome, that's it.
FX Sumo is ready to change the amount of required trades from 500 to 300, but that's as low as we will go. This value will remain flexible, will see how it goes.
Millionaire. For fk sake, what a garbage month this was. You know that You are in for a treat when both breakout and grid strategies struggle simultaneously.
The signal was started precisely a year ago, however, due to December, when trading was re-calibrated (Millionaire Signal, update as of 2019), its "true history" is only 11 months old. Throughout the first 10 months we had managed to come up with healthy profits every single month, however, the picture changed in June.
Despite more than 220 closed positions, there was no consistency whatsover; on top of that, Millionaire breached its previous highs in terms of DD. We couldn't have imagined any worse scenario, nothing went our way. If there is someone out there willing to pick on us, this is the time to do just that - this is what a truly bad month looks like for us. We could always make statements like "while we struggled, almost every other signal blew up" OR "better to have periodic DD than blown account", but who cares, really? - the fact that other signals perform poorly doesn't help our case. We will be first ones to tell that this recent performance was as bad as it gets, and we are not shining away from this. SO - What went wrong?
The story has 2 sides - spike in DD and negative total return aspect.
With DD, the story is relatively short - once again, one of the underlying grid-Eas generated a basket of trades on EURUSD that caused massive troubles. Yes, it was the same Ea, which risks we had previously cut in half (after the previous "25% DD spike"), and, yes, in 10 years of backtest history, it had never opened such heavy total basket of trades. Should we be concerned? - Yes, but to some extent only. This recent basket reminded us once again the risks behind running any grid-type strategy. If previously we were willing to increase grid trading sizes proportionally to our growth in account balance, right now we remain hesitant. We are still in shock of what happened here, however, we don't want to become prisoners of the moment. Based on statistics and all the available information, this recent upside movement in EURUSD was very unusual - 90 straight hours up without any meaningfull correction, really? - such moves are not expected to repeat anytime soon. Honestly, we would love to see the risks behind these grid strategies lowered, however, that should happen naturally as account grows bigger and trading sizes remain as they are.
Negative total returns for June is what disturbs us as much as the previously discussed DD spike. The idea behind having 8 seperate Eas with low inner-correlations is to be able to compensate one Ea's struggles with success of others. Obviously, as history shows, this had worked out just fine in the previous months, however, in June with all the political uncertainity, the mix of these 8 strategies were not able to come on top. We feel that a major reason for this was the simple fact that 2 out of 4 underlying grid-strategies were struggling extensively throughout the period, thus, these just didn't add their typical share to the total profits. Usually, there are quite many baskets that are being closed in profit, however, as soon as these grids get "dragged out", more time has to pass for profits to be fixed and overnight swaps eat out larger share of profits. Should we be concerned? - as above, yes, but to some extent only. Clearly, there are market conditions, at which our current set of Eas tend to struggle, therefore, we must still continue our search for new strategies that could be combined with the existing set. Still, when compared with our positive months, this was rather insignificant loss, thus, not going crazy over this.
Don't get us wrong, we are not trying to minimize of what happened, quite contrary. Just letting You know our mindset when dealing with this and analyzing of what changes should be made in the future.:) We are looking positively towards the upcoming month, as we see the opportunity to bounce back from this hit. Cocky? - nop, just confident in the gameplan we have set here.:)
Here is the list of 15 current most-subscribed MQL5 trading signals:
Yes, did replace the icons, as some of our readers were upset of the previous choice.;)
Everything considered, this TOP remains as bad as previous months, no improvement. 13 horrible signals, all will blow up in near future, yet, wildly popular for now. FX Sumo previously had positively highlighted 2 trading signals - Shikari and Blackwave Pacific. The 2 remain at our watchlist, due to money management conditions primarly. Interestingly enough, both of these did struggle as well in June, reaching multi-month highs in DD, yet, these levels remained reasonable. Shikari is still fighting with the open positions that are generating quite a loss, however, we do expect the signal to recover and solve these short-term problems.
Our readers did propose their list of signals, and, hell, that's not a bad list to monitor:
Martin2017 - guys, there is no need to consider demo signals, we cannot evaluate these seriously.
GapFixer Gap 2 - impossible to be copied effectively with that list of chosen trading pairs and the share of trades that are opened/closed in the hour after midnight. Unless broker is the same, VPS is lightning fast and general trading conditions are perfect, stay away.
Ciculu 1 - similarly to the previous signal, the choice of traded pairs is far from perfect.
FXBO Investments - we do expect MM to break down some day in the future. If we were to manage the signal, we would change martingale to less aggressive amplification of position sizes. Trading efficiency is above average, thus, there is some potential, but, yeah, that style of building trading baskets makes no sense whatsoever.
Balanced FX Portfolios - we don't get this one, honestly, we just don't. The guy talks a lot - who doesn't while everything is going okey? - have learned the hard way that communication aspect is meaningless. Historical performance? - inflated, not indicative of future results. Reliability of live performance? - 80 trades/3 months, sample is not large enough, obviously. Yet, somehow, 50k stacked, we are amazed. While everyone is pissing hot about this one, we have a strong feeling that the individual behind this signal is closely linked to Elena and her historical shenanigans.
SIEa - have previously analyzed this one, it remains a rather neutral choice. Similarly to other signals, this one did struggle quite a lot in June, and is still holding on to open positions. Compared to other signals with open positions, this has floating losses for much lenghtier periods of time, which makes us to question both money management and trading efficiency stability in medium to long run.
Banker - this is solid alternative for Shikari signal -> similar trading efficiency, maybe even slighly better money management. We will monitor this one's performance in the upcoming months.
Ga Soft Martingale - we like everything about this one, except, that laughable balance size. No, it doesn't use martingale - from our perspective, just the fact that the author uses this word in the signal's name draws away majority of potential subs. Typically, we are accustomed of seing bad signals over-hyped; this is completely opposite story, sadly.
Invest Small Capital with monthly Growth - all around solid choice. The fact that the signal trades DaX30 index provides some great diversification opportunities for subscribers willing to diversify away risks of copying other trading signals. Trading balance is quite high, trades are being made on both directions (not typical "buy&hold" trades we are accustomed of seing in equity markets), not bad, not bad at all.
We feel that it is extremely important that our readers give their feedback for our material. We encourage You to analyze and criticize our findings, as well as actively engage in these discussions. Share FX SUMO analytical/educational articles and raise the level of critical-thinking for Yourself, as well as the overall community. More than ever we have to look-past all the fog to see the real picture; the list of analyzed signals is still of very low quality -> this has to change ASAP, otherwise, new stories of lost money will be unfolded very very soon.
Best of luck,