OUTLOOK FOR MAY, 2019
It is June already, weather is unbearabely hot, and a ton of trading signals have literally melted to the ground within the last month. The last 3 weeks have been overwhelmed with different fundamental news and shake-ups, resulting in absolutely chaotic trading conditions. Like, You know it is really ugly when You have to wait for another week to pass before releasing the damn article, as 1/3 of soon-to-be-analyzed trading signals have DD of 40+% at that particular moment. Horrible.
The structure of this article will differ from those in the recent history. We won't focus so much on individual signals; contrary to that, we will briefly present some more general ideas that crossed our minds during the last weeks.
This article will consist of 5 parts:
- MQL5, bans and affects on our signals & behaviour on the site;
- Revision of the signals that we placed the highest in the previous update;
- Social Trading Vlog - what that is and why should it be useful to follow the channel;
- Discussion of historical "top-performers" and our valuation standards;
- Discussion of the MQL's 15 most-subscribed signals and their quality; where do we rank among these heroes?
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.
Last month we got banned in MQL5 for "promoting" our previous monthly update (Outlook for April, 2019) on other signal providers' walls. Yes, the same signal providers, whose signals we did include in our analysis (it wasn't like we were spamming left-n-right without a clear reason). Obviously, it is absolutely fine when people promote some dumpster-like products 3x per day, yet, any sort of criticism is being "sushed" down by the site. Honestly, we should have known better, thus, this was our own mistake that lead to a major problem.
Some of You may have spotted that one of our trading signals - FX SUMO Steady - is missing. No worries, it hasn't blown up or anything; actually, this is quite comical... In mid-May FX SUMO decided to link the Steady signal to Myfxbook platform (Millionaire was already there before); in order for that to be done, investor password had to be changed. Wink-wink-wink, as soon as the investor password was changed, MQL5 platform was no longer able to connect to the account, thus, it was put in the archive (archived link) Then came the best part - as we were banned from MQL5, we couldn't edit the signal, thus, there was no chance of bringing it back at that moment. Sure, now, when the ban has expired, we could edit the signal again, however, the full month of "offline results" would be there. We are debating what should be done in these conditions, as our history and its credibility has been messed up. Btw, it is still not clear for us why we are not allowed to edit our own product(s) even when being banned. It seems ridiculously dumb, not to say least...
Our takeaways form this mess? - as our freedom to voice our opinions has been restricted numerous times already, going forward we have decided to use the MQL5 platform only for commercial purposes. We won't argue with anyone or post anything in public that could lead to potential sanctions from "someone above". Our content will be directly focused on raising awarness of our blog, Telegram group and our own trading signal(s). We will continue to present our opinions wildly and loudly on different platforms, on which we cannot be targeted so easy.
The last 3 weeks made us to think. Yes, trading conditions were raugh, and yes, signals blew up one after another, however, we were not ready to see so many of our previously highly-valued signals to perform such poorly. Examples of this? - Masa was disgustingly bad, Trading to Win and its author just went crazy and lost his damn mind. These 2 made us wonder whether there should be implemented potential changes in the methodology of how we value different signals.
Looking back, it is quite clear that we had overvalued the money management behind these signals. It is easy to judge "post factum", however, it seems that going forward we should stress more the quality of money management, even if that comes together with lower trading efficiency. Yes, monthly growth/DD ratio of 2 or more seems sexy as hell, but what's the point if we cannot manage our funds properly? - 3 to 4 outstanding months, just to have the one, in which we lose cumulated gains and then some, really? - that's just not accaptable, no fucking way. This is investing not gambling, for crying out loud.
The new changes in money management valuation are as follows:
- Required live history lenght increased from 3 to 6 months;
- Required live amount of trades -> 500;
- Required growth/#of trades ratio < 0.5;
If a signal doesn't qualify for any of these 3, no way in hell it's money management will be recognized as accaptable. We are sick and tired of seeing situations when a signal performs reasonably for half a year, and then just breaks apart. The required amount of trades will remain this high going forward, as controlling time horizon, obviously, is not enough - we want to see real experience dealing with all-type of nonsense, not just "50 trades->300%growth" bullshit. Yes, this will dramatically reduce the amount of signals that would qualify for "reasonable money mgmt standards", but we couldn't care less, honestly. By having these checks in place we would have never picked Masa or that other lunatic,
Eh, and no more valuation of "communication" or sht -> as long as a signal performs good, its owner is positive and active; as soon as shit brakes lose, everyone goes quiet. No fucking way You should be ranked higher than others just because You talk more -> nop, 0 chance.
Since we just mentioned money management, FX SUMO strongly advises our readers to check out this particular channel in Youtube - Social Trading Vlog. In very short, the person behind this one is doing something similar to us, just on different platform (eToro vs MQL5). Contrary to us, this Maltese is an actual subscriber of other signals, and once a week he analyzes his portfolio's performance, which consists of various signals. Through interaction with audience he discusses whether particular signals should be included/excluded from his portfolio. What is more, this individual is very risk averse, and he tends to invest only in very safe traders. Finally, he seems to be just a really cool guy, so we definitelly advise You to watch some of his videos.:)
Back to us. Did You know that we have been producing these articles for 10 straight months? - yes, we are getting close to our 1 year anniversary and it is time to start drawing some long-term conclusions.
Since very first "update", we have tried not only to smirk about majority of horrible MQL5 trading signals out there, but also put major effort into finding some positive outliers. Many of our readers have pointed out that at times we have been overly optimistic about certain signals; frankly speaking, seems that they were right. Like we mentioned before, our pre-requirements of money management importance was lower-than-needed, as we always tried to put 50/50 importance between MM and trading efficiency. How many hotshots have come from nowhere with great trading efficiency and, seemingly, well-defined money management? - Well, here is the summary of all those signals that we have ranked in the same level or higher than our own Millionaire Signal throughout the last 10 months:
Total of 21 such signals, only 4 left today. Emmm, really?
2 conclusions here:
- This is the justification for previously introduced changes in the valuation of trading signals -> no way in hell we will have ~1/5 chance on going correct with our picks. That's just sad-sad-sad result, which has to be fixed asap -> even if that means lower amount of "positive" signals;
- Some people have criticized us for putting our signal at the very top for the last 2 months -> emm, really? - take a look again on those numbers and tell us this: what is our motivation to suddenly put some random new signal higher than ours (or those others with established positions, like Blackwave)? Short term efficiency, combined, with unproven money management? - nop, sorry, we have done that quite enough, have learnt our lesson the hard way.
Probably, we have been overly optimistic about these signals, as we felt ashamed of putting our signal at the very top. You know what? - after going through these stats and seeing the big picture, we don't really give a shit. You have a trading signal that looks good and could be a good investment choice? - nice, now add it to the favourites, and wait for accumulated history of 6 months and atleast 500 closed positions, otherwise, don't touch that -> as with everything surrounding MQL5, You should know better (history is there to prove our point).:)
Eh, yes, yes, don't be so impatient, here comes the last part about the current trading signals and their analysis.:)
Normally, we would analyze 25-most subscribed trading signals, however, still many of those are under heavy DD situations, thus, not visible for general public. Let's go a different way -> here is the list of those popular (13 out of 15 analyzed), yet, garbage signals that You should stay away:
Familiar names, right? What about those signals that our readers proposed to be evaluated? - Well, in very short, none of those 5 signals were even included in this analysis, as neither of those would qualify under our updated "sufficient trading history" requirement.
Message to our readers:
Including our own trading signal, there were only 2 others trading signals that had money management capable of dealing with the current chaotic trading conditions.
Shikari - previously we had pointed out the excellent money management behind this one, and the last month didn't make us regret our take. Yes, DD climbed substantially, reaching 8% mark, but it is still within the limits of previous highs. The signal was facing all the same problems (with GBP and EUR) as the other, "more effective" trading signals, yet here it is, standing tall and strong. In the previous reviews we were sceptical about the efficiency of this system as well as the author and his knowledge about the market, but You know what? - fuck that. The signal has managed to significantly outperform avg. market return (~8% per annum) for 5 straight years, and is recieving for that only 30USD per each subscribtion (compared to, for example, 250USD and this Frero guy with all his subscribers). You know that it's impossible hard to be achieved, right?
Blackwave Pacific - similarly to the previous signal, the last month made us appreciate once again the steadiness of this signal and its results. Yes, trading efficiency on monthly basis is not always perfect, but, let's be real, with controled money management in line, it shouldn't even be possible. Knowing the historical risks behind the signal, its perfromance has been exceptional, not to say least. We are happy to see that almost 100 people are following this one!
Millionaire Signal - the last 4 weeks have been the most challenging of this year. Similarly to almost every other trading signal out there, GBP crash and recent "shaky" moves on EURUSD left a negative mark on our trading performance. Despite having positive-growth trading month, our efficiency was below expected, and there is still a basket of GBPUSD positions open that, hopefully, will be closed in the upcoming week. Money management held its ground in spite of having open positions in hundreds-of-pips under the water, which was the most positive aspect from all this shitstorm. This month hasn't started the way we wanted, as the signal is ~1,8% in the loss, however, we are expected to turn that around. Will see how we go, but we remain optimistic about our future perspectives.:)
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,