What an Forex EA Independent Reviewer said about our EA ?

From ckowyong.com

"i’ve been asked soooo many times which are my favourite EAs… and i’ve always answered in a neutral way… until yesterday.
A recent visitor to the blog (by the initials of A.A.) asked this question : “out of the five EAs you tested, which one do you like the most?”

In the past, i would have said “none”… as there weren’t many Expert Advisors that i would trade LIVE with. however, in the recent weeks, i began to see the light… after traveling through the the tunnel for over 4 months. at a time where many have given up on the thought of finding a profitable EA (visit the forums and you will feel this sentiment), i started to understand what makes a good EA and which ones that i’ve tested are good enough for me to go LIVE. to cut the story short, this is how i replied to A.A.’s email (with a little more detail added in) :

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question #1 from A.A. : Out of the five EAs you tested, which one do you like the most?
right now, these are my favourites in order of preference… but it it’ll take a very very long email to explain why i like them and why i’ve placed them in this order… but i’ll try to explain briefly :

#1 : PointBreak (by Lin)
Reason : this is an EA based on the actual EA that Lin is using to trade his customer’s money. he has been using it for over 1 year now with good monthly returns. because of this, and because of the confidence that Lin has with this EA, i believe it’s one that can stand the test of time (it has already for more than a year).

being a mathematical EA, it’s not prone to unexpected market movements. it does not try to predict where the market will go, but takes advantage of the fact that the market trends (up or down) more than it ranges. as long as it’s trending up or trending down, it will continue to make small trades in the direction of the trend. if the trend reverses, it will change the direction of the trades to trade WITH the trend. this acts as like a hedge, but essentially, it’s doing something called pyramiding and averaging.

when the pair (EURUSD) starts to range (ie. goes flat), PointBreak may have a tendency to experience a drawdown. during this period, it kind of turns on a 2nd engine which attempts to get small wins from the ranging market to mediate the drawdown. once the trend resumes, it will start it’s pyramiding and averaging again.

something to take note of is that the EA treats all the above trades as one single CYCLE… and the cycle will only end when the NETT of all trades are in profit…. hence drawdowns are expected when trading with this EA. this may make some traders uneasy… but looking at the historical behavior of the EURUSD and the way the Money Management is programmed into PointBreak, all these started to make sense to me. as long as the Money Management is kept conservative, PointBreak will never over trade. and since the EURUSD historical trends more than it ranges, the mathematical logic behind the EA will put the probability of closing out each cycle with a profit in the trader’s favor.

#2 : FractalWizard (by Lin)
Reason : it’s based on a contrarian approach for trade entry… which i think gives it an advantage over traditional entry methods that waits for confirmation and often ends up chasing the trend (ie. usually late). i also like that the EA has some built-in intelligence in it’s exit strategy which attempts to cut losses short and let profits run (TP = 100 pips, initial stop based on an indicator which makes it adaptive to the market conditions). keyword here is ADAPTIVE.
being an EA that adapts to the market conditions, i’m expecting that FractalWizard will not require “re-optimisation” very often. EAs with fixed-pip stop-losses and trailing stops, in my opinion, are in a way “optimised” to be profitable in a certain market. over time, such an EA may become less profitable or may even start to generate losses.

due to FractalWizard’s adaptive nature, as well as it’s good forward-testing results (at fxhope.com), i think this EA is poised to remain profitable for a good while. it’s not a very exciting EA to watch (it does not trade very often), but i think it’s definitely one that is worth watching.

#3 : DoublePlay v4.0 (by Hal Chapman)
Reason : i think Hal has managed to make the new version of this very popular EA profitable again… judging from the good forward-testing that i’m getting : 100% winners so far! however, i’m not sure how long it will last… since it looks like the settings may have been “optimised” based on the fact that the stop-loss and trailing stop levels were changed, but are still fixed-pip values. however, a new BE (break-even) feature has been added, and it now has an optional feature of utilizing invisible stops to make sure that brokers are not able to do stop-hunting on your stops. these new features should be able to enhance the EA’s profitability… although i’ve not tested them to be able to confirm so.

despite my reservations, i know what Hal Chapman is capable of. his DoublePlay v3.5.2 was very impressive back in Sept where it doubled an account within a month. Hal knows his stuff, and i think i like what i’m seeing in DoublePlay v4.0 so far.

if i’m going LIVE with DoublePlay, i’ll probably wait till the holiday season is over and when volume is back to normal. priced at US$199 (before ck’s rebates), DoublePlay is likely to pay for itself within the 1st week if it continues to perform as what we’ve seen in our forward-test.
question #2 from A.A. : Which EA are you using for your live trading?
none right now. the last one was DoublePlay v3.5.2 back in Oct. i’ve been in 100% testing mode since then.

if i were to go LIVE again, i’ll probably go LIVE with DoublePlay v4.0 first while it’s showing good profitability to get some quick profits. once my trading capital grows… i may move the money out of DoublePlay and spread them over PointBreak (lower risk / better consistency) and maybe FractalWizard if the forward-test continues to show good results in Jan 08.
hope i’ve answered your questions :O) answering your email has also helped me crystalize my trading plan… so i’ve got to thank you for your questions too! :O) "

Merry Christmas to everyone!

Lin