Scam Example 1 – Let Losers Run!

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This robot shows you one way in which unscrupulous marketers can try and scam you by showing you highly misleading "live" results on their website. The expert advisor uses the "hedging" feature of MetaTrader 4 to prevent losing trades ever being displayed in the list of closed trades. You've probably heard the advice that you should cut your losses short and let your profits run. This EA does exactly the opposite. It still manages to produce an extremely impressive graph though!

This scam example is based on our first example robot which used random entries. This time however it goes both long and short at the same time. When one out of the two trades reaches its take profit level it shows up in the MetaTrader "Account History" list as a closed trade with a healthy profit. At this point the take profit and stop loss prices on the losing order are cancelled. The loss is allowed to run forever! Rinse and repeat, and check below to see what happens. Whilst the green equity line on the backtest results reveals the true picture, the blue account balance line shows no losing trades whatsoever, at least until the strategy tester closes every order at the end of the test. The thing is though, on a forward test on a demo account, any reports created from the "Account History" tab in MetaTrader only show the impressive account balance. Try it for yourself and see.

Here are the results from the MetaTrader strategy tester (but with the list of trades shortened):

Strategy Tester Report
GuruScam01
Symbol EURUSD (Euro vs US Dollar)
Period 1 Minute (M1) 2009.05.04 00:00 – 2009.05.29 21:59 (2009.05.04 – 2009.05.30)
Model Every tick (the most precise method based on all available least timeframes)
Parameters Magic=54321; Slippage=30; ProfitTarget=500; StopLoss=5000; Lots=0.1; StpMode=true;
Bars in test 29376 Ticks modelled 1313890 Modelling quality 25.00%
Mismatched charts errors 0
Initial deposit 10000.00
Total net profit -5682.50 Gross profit 22486.30 Gross loss -28168.80
Profit factor 0.80 Expected payoff -33.43
Absolute drawdown 5784.90 Maximal drawdown 6596.20 (61.01%) Relative drawdown 61.01% (6596.20)
Total trades 170 Short positions (won %) 85 (40.00%) Long positions (won %) 85 (100.00%)
Profit trades (% of total) 119 (70.00%) Loss trades (% of total) 51 (30.00%)
Largest profit trade 879.80 loss trade -937.70
Average profit trade 188.96 loss trade -552.33
Maximum consecutive wins (profit in money) 84 (4200.00) consecutive losses (loss in money) 6 (-1386.30)
Maximal consecutive profit (count of wins) 4200.00 (84) consecutive loss (count of losses) -3390.90 (5)
Average consecutive wins 5 consecutive losses 2

An impressive graph that is just a scam

# Time Type Order Size Price S / L T / P Profit Balance
1 2009.05.04 00:00 buy 1 0.10 1.32818 0.00000 0.00000
2 2009.05.04 00:00 modify 1 0.10 1.32818 1.27793 1.33318
3 2009.05.04 00:00 sell 2 0.10 1.32793 0.00000 0.00000
4 2009.05.04 00:00 modify 2 0.10 1.32793 1.37818 1.32293
5 2009.05.04 02:40 t/p 1 0.10 1.33318 1.27793 1.33318 50.00 10050.00
6 2009.05.04 02:40 modify 2 0.10 1.32793 0.00000 0.00000
7 2009.05.04 02:40 buy 3 0.10 1.33346 0.00000 0.00000
8 2009.05.04 02:40 modify 3 0.10 1.33346 1.28321 1.33846
9 2009.05.04 02:40 sell 4 0.10 1.33321 0.00000 0.00000
10 2009.05.04 02:40 modify 4 0.10 1.33321 1.38346 1.32821
11 2009.05.04 09:29 t/p 4 0.10 1.32821 1.38346 1.32821 50.00 10100.00
12 2009.05.04 09:29 modify 3 0.10 1.33346 0.00000 0.00000
13 2009.05.04 09:29 buy 5 0.10 1.32816 0.00000 0.00000
14 2009.05.04 09:29 modify 5 0.10 1.32816 1.27791 1.33316
15 2009.05.04 09:29 sell 6 0.10 1.32791 0.00000 0.00000
16 2009.05.04 09:29 modify 6 0.10 1.32791 1.37816 1.32291
17 2009.05.04 12:25 t/p 6 0.10 1.32291 1.37816 1.32291 50.00 10150.00
18 2009.05.04 12:25 modify 5 0.10 1.32816 0.00000 0.00000
19 2009.05.04 12:25 buy 7 0.10 1.32287 0.00000 0.00000
20 2009.05.04 12:25 modify 7 0.10 1.32287 1.27262 1.32787
21 2009.05.04 12:25 sell 8 0.10 1.32262 0.00000 0.00000
22 2009.05.04 12:25 modify 8 0.10 1.32262 1.37287 1.31762
23 2009.05.04 14:40 t/p 7 0.10 1.32787 1.27262 1.32787 50.00 10200.00
24 2009.05.04 14:40 modify 8 0.10 1.32262 0.00000 0.00000
25 2009.05.04 14:40 buy 9 0.10 1.32816 0.00000 0.00000
26 2009.05.04 14:40 modify 9 0.10 1.32816 1.27791 1.33316
27 2009.05.04 14:40 sell 10 0.10 1.32791 0.00000 0.00000
28 2009.05.04 14:40 modify 10 0.10 1.32791 1.37816 1.32291
29 2009.05.04 15:15 t/p 9 0.10 1.33316 1.27791 1.33316 50.00 10250.00
30 2009.05.04 15:15 modify 10 0.10 1.32791 0.00000 0.00000
31 2009.05.04 15:15 buy 11 0.10 1.33344 0.00000 0.00000
32 2009.05.04 15:15 modify 11 0.10 1.33344 1.28319 1.33844
33 2009.05.04 15:15 sell 12 0.10 1.33319 0.00000 0.00000
34 2009.05.04 15:15 modify 12 0.10 1.33319 1.38344 1.32819
35 2009.05.04 17:04 t/p 11 0.10 1.33844 1.28319 1.33844 50.00 10300.00
36 2009.05.04 17:04 modify 12 0.10 1.33319 0.00000 0.00000
37 2009.05.04 17:04 buy 13 0.10 1.33886 0.00000 0.00000
38 2009.05.04 17:04 modify 13 0.10 1.33886 1.28861 1.34386
39 2009.05.04 17:04 sell 14 0.10 1.33861 0.00000 0.00000
40 2009.05.04 17:04 modify 14 0.10 1.33861 1.38886 1.33361
41 2009.05.05 07:54 t/p 14 0.10 1.33361 1.38886 1.33361 50.00 10350.00
42 2009.05.05 07:54 modify 13 0.10 1.33886 0.00000 0.00000
43 2009.05.05 07:54 buy 15 0.10 1.33358 0.00000 0.00000
44 2009.05.05 07:54 modify 15 0.10 1.33358 1.28333 1.33858
45 2009.05.05 07:54 sell 16 0.10 1.33333 0.00000 0.00000
46 2009.05.05 07:54 modify 16 0.10 1.33333 1.38358 1.32833
47 2009.05.05 10:29 t/p 15 0.10 1.33858 1.28333 1.33858 50.00 10400.00
48 2009.05.05 10:29 modify 16 0.10 1.33333 0.00000 0.00000
49 2009.05.05 10:29 buy 17 0.10 1.33886 0.00000 0.00000
50 2009.05.05 10:29 modify 17 0.10 1.33886 1.28861 1.34386
51 2009.05.05 10:29 sell 18 0.10 1.33861 0.00000 0.00000
52 2009.05.05 10:29 modify 18 0.10 1.33861 1.38886 1.33361
53 2009.05.05 18:21 t/p 18 0.10 1.33361 1.38886 1.33361 50.00 10450.00
54 2009.05.05 18:21 modify 17 0.10 1.33886 0.00000 0.00000
55 2009.05.05 18:21 buy 19 0.10 1.33356 0.00000 0.00000
56 2009.05.05 18:21 modify 19 0.10 1.33356 1.28331 1.33856
57 2009.05.05 18:21 sell 20 0.10 1.33331 0.00000 0.00000
58 2009.05.05 18:21 modify 20 0.10 1.33331 1.38356 1.32831
59 2009.05.06 02:22 t/p 20 0.10 1.32831 1.38356 1.32831 50.00 10500.00
60 2009.05.06 02:22 modify 19 0.10 1.33356 0.00000 0.00000
61 2009.05.06 02:22 buy 21 0.10 1.32829 0.00000 0.00000
62 2009.05.06 02:22 modify 21 0.10 1.32829 1.27804 1.33329
63 2009.05.06 02:22 sell 22 0.10 1.32804 0.00000 0.00000
64 2009.05.06 02:22 modify 22 0.10 1.32804 1.37829 1.32304
65 2009.05.06 13:15 t/p 21 0.10 1.33329 1.27804 1.33329 50.00 10550.00
66 2009.05.06 13:15 modify 22 0.10 1.32804 0.00000 0.00000
67 2009.05.06 13:15 buy 23 0.10 1.33378 0.00000 0.00000
68 2009.05.06 13:15 modify 23 0.10 1.33378 1.28353 1.33878
69 2009.05.06 13:15 sell 24 0.10 1.33353 0.00000 0.00000
70 2009.05.06 13:15 modify 24 0.10 1.33353 1.38378 1.32853
71 2009.05.06 15:06 t/p 24 0.10 1.32853 1.38378 1.32853 50.00 10600.00
72 2009.05.06 15:06 modify 23 0.10 1.33378 0.00000 0.00000
73 2009.05.06 15:06 buy 25 0.10 1.32851 0.00000 0.00000
74 2009.05.06 15:06 modify 25 0.10 1.32851 1.27826 1.33351
75 2009.05.06 15:06 sell 26 0.10 1.32826 0.00000 0.00000
76 2009.05.06 15:06 modify 26 0.10 1.32826 1.37851 1.32326
77 2009.05.06 19:37 t/p 25 0.10 1.33351 1.27826 1.33351 50.00 10650.00
78 2009.05.06 19:37 modify 26 0.10 1.32826 0.00000 0.00000
79 2009.05.06 19:37 buy 27 0.10 1.33380 0.00000 0.00000
80 2009.05.06 19:37 modify 27 0.10 1.33380 1.28355 1.33880
81 2009.05.06 19:37 sell 28 0.10 1.33355 0.00000 0.00000
82 2009.05.06 19:37 modify 28 0.10 1.33355 1.38380 1.32855
83 2009.05.07 01:38 t/p 28 0.10 1.32855 1.38380 1.32855 50.00 10700.00
84 2009.05.07 01:38 modify 27 0.10 1.33380 0.00000 0.00000
85 2009.05.07 01:38 buy 29 0.10 1.32851 0.00000 0.00000
86 2009.05.07 01:38 modify 29 0.10 1.32851 1.27826 1.33351
87 2009.05.07 01:38 sell 30 0.10 1.32826 0.00000 0.00000
88 2009.05.07 01:38 modify 30 0.10 1.32826 1.37851 1.32326
89 2009.05.07 11:06 t/p 29 0.10 1.33351 1.27826 1.33351 50.00 10750.00
90 2009.05.07 11:06 modify 30 0.10 1.32826 0.00000 0.00000
91 2009.05.07 11:06 buy 31 0.10 1.33378 0.00000 0.00000
92 2009.05.07 11:06 modify 31 0.10 1.33378 1.28353 1.33878
93 2009.05.07 11:06 sell 32 0.10 1.33353 0.00000 0.00000
94 2009.05.07 11:06 modify 32 0.10 1.33353 1.38378 1.32853
95 2009.05.07 13:35 t/p 32 0.10 1.32853 1.38378 1.32853 50.00 10800.00
96 2009.05.07 13:35 modify 31 0.10 1.33378 0.00000 0.00000
97 2009.05.07 13:35 buy 33 0.10 1.32757 0.00000 0.00000
98 2009.05.07 13:35 modify 33 0.10 1.32757 1.27732 1.33257
99 2009.05.07 13:35 sell 34 0.10 1.32732 0.00000 0.00000
100 2009.05.07 13:35 modify 34 0.10 1.32732 1.37757 1.32232
101 2009.05.07 13:39 t/p 33 0.10 1.33257 1.27732 1.33257 50.00 10850.00
102 2009.05.07 13:39 modify 34 0.10 1.32732 0.00000 0.00000
103 2009.05.07 13:39 buy 35 0.10 1.33292 0.00000 0.00000
104 2009.05.07 13:39 modify 35 0.10 1.33292 1.28267 1.33792
105 2009.05.07 13:39 sell 36 0.10 1.33267 0.00000 0.00000
106 2009.05.07 13:39 modify 36 0.10 1.33267 1.38292 1.32767
107 2009.05.07 13:52 t/p 35 0.10 1.33792 1.28267 1.33792 50.00 10900.00
108 2009.05.07 13:52 modify 36 0.10 1.33267 0.00000 0.00000
109 2009.05.07 13:52 buy 37 0.10 1.33825 0.00000 0.00000
110 2009.05.07 13:52 modify 37 0.10 1.33825 1.28800 1.34325
111 2009.05.07 13:52 sell 38 0.10 1.33800 0.00000 0.00000
112 2009.05.07 13:52 modify 38 0.10 1.33800 1.38825 1.33300
113 2009.05.07 14:07 t/p 37 0.10 1.34325 1.28800 1.34325 50.00 10950.00
114 2009.05.07 14:07 modify 38 0.10 1.33800 0.00000 0.00000

Here's the source code for the "robot":

//+------------------------------------------------------------------+
//|                                                   GuruScam01.mq4 |
//|     Copyright © 2009, Marketing Dreams Ltd. All Rights Reserved. |
//|                                         http://trading-gurus.com |
//|                                                                  |
//| GuruTrader™ scam example 1                                       |
//| Version 1.0                                                      |
//|                                                                  |
//| How to produce an impressive "live" equity curve while actually  |
//| losing money!                                                    |
//|                                                                  |
//| Wealth Warning! This expert is for educational purposes only.    |
//| It should NEVER be used on a live account. Past performance is   |
//| in no way indicative of future results!                          |
//+------------------------------------------------------------------+
#property copyright "Copyright © 2009, Marketing Dreams Ltd."
#property link      "http://trading-gurus.com"
#define SLEEP_OK     250
#define SLEEP_ERR    250
//---- input parameters
extern int     Magic = 54321;
extern int     Slippage=30;
extern int     ProfitTarget=500;
extern int     StopLoss=5000;
extern double  Lots=0.01;
extern bool    StpMode = FALSE;
//---- static variables
static int     Dig;
static double  Points;
static bool    Initialized = FALSE;
static bool    Running = FALSE;
static int     LongOrder;
static int     ShortOrder;
static double  LastBid;
static double  LastAsk;
static color   clBuy = DodgerBlue;
static color   clSell = Crimson;
//+------------------------------------------------------------------+
//| Utility functions                                                |
//+------------------------------------------------------------------+
#include <stdlib.mqh>
#include <stderror.mqh>
#include <WinUser32.mqh>
//+------------------------------------------------------------------+
//| Expert helper functions                                          |
//+------------------------------------------------------------------+
//+------------------------------------------------------------------+
//| Modifies target and stop levels of an order                      |
//+------------------------------------------------------------------+
int UpdateOrder(int Ticket, double TargetPrice, double StopPrice)
{
   int ErrorCode;
   if (OrderSelect(Ticket, SELECT_BY_TICKET) != TRUE) {
      ErrorCode = GetLastError();
      Print("Error selecting order to modify ", Ticket, ": ",
            ErrorDescription(ErrorCode), " (", ErrorCode, ")");
      return(-1);
   }
   if (OrderModify(Ticket, OrderOpenPrice(), StopPrice, TargetPrice, 0)) {
      Sleep(SLEEP_OK);
      return (Ticket);
   }
   ErrorCode = GetLastError();
   RefreshRates();
   Print("Error modifying order ", Ticket, ": ",
         ErrorDescription(ErrorCode), " (", ErrorCode, ")");
   Sleep(SLEEP_ERR);
   return (-1);
}
//+------------------------------------------------------------------+
//| Places an order                                                  |
//+------------------------------------------------------------------+
int Order(string symbol, int Type, double Entry, double Quantity,
          double TargetPrice, double StopPrice, string comment="")
{
   string TypeStr;
   color  TypeCol;
   int    ErrorCode, Ticket;
   double Price, FillPrice;
   Price = NormalizeDouble(Entry, Dig);
   switch (Type) {
      case OP_BUY:
         TypeStr = "BUY";
         TypeCol = clBuy;
         break;
      case OP_SELL:
         TypeStr = "SELL";
         TypeCol = clSell;
         break;
      default:
         Print("Unknown order type ", Type);
         break;
   }
   if (StpMode) {
      Ticket = OrderSend(symbol, Type, Quantity, Price, Slippage,
               0, 0, comment, Magic, 0, TypeCol);
   }
   else {
      Ticket = OrderSend(symbol, Type, Quantity, Price, Slippage,
               StopPrice, TargetPrice, comment, Magic, 0, TypeCol);
   }
   if (Ticket >= 0) {
      Sleep(SLEEP_OK);
      if (OrderSelect(Ticket, SELECT_BY_TICKET) == TRUE) {
         FillPrice = OrderOpenPrice();
         if (Entry != FillPrice) {
            RefreshRates();
            Print("Slippage on order ", Ticket, " - Requested = ",
                  Entry, ", Fill = ", FillPrice, ", Current Bid = ",
                  Bid, ", Current Ask = ", Ask);
         }
         if (StpMode && ((StopPrice > 0) || (TargetPrice > 0))) {
            if (OrderModify(Ticket, FillPrice, StopPrice, TargetPrice, 0, TypeCol)) {
               Sleep(SLEEP_OK);
               return (Ticket);
            }
   	   }
      }
      else {
         ErrorCode = GetLastError();
         Print("Error selecting new order ", Ticket, ": ",
               ErrorDescription(ErrorCode), " (", ErrorCode, ")");
      }
      return (Ticket);
   }
   ErrorCode = GetLastError();
   RefreshRates();
   Print("Error opening ", TypeStr, " order: ", ErrorDescription(ErrorCode),
         " (", ErrorCode, ")", ", Entry = ", Price, ", Target = ",
         TargetPrice, ", Stop = ", StopPrice, ", Current Bid = ", Bid,
         ", Current Ask = ", Ask);
   Sleep(SLEEP_ERR);
   return (-1);
}
//+------------------------------------------------------------------+
//| Performs system initialisation                                   |
//+------------------------------------------------------------------+
void InitSystem()
{
   Running = FALSE;
   RefreshRates();
   LastBid = Bid;
   LastAsk = Ask;
   Initialized = TRUE;
}
//+------------------------------------------------------------------+
//| Checks for entry to a trade                                      |
//+------------------------------------------------------------------+
int CheckEntry(double Size)
{
   LongOrder = Order(Symbol(), OP_BUY, Ask, Size,
         Ask + (Points * ProfitTarget), Bid - (Points * StopLoss));
   ShortOrder = Order(Symbol(), OP_SELL, Bid, Size,
         Bid - (Points * ProfitTarget), Ask + (Points * StopLoss));
   if ((LongOrder > 0) && (ShortOrder > 0))
      return(1);
   else
      return(0);
}
//+------------------------------------------------------------------+
//| Checks for exit from a trade                                     |
//+------------------------------------------------------------------+
int CheckExit()
{
   int ErrorCode;
   if (OrderSelect(LongOrder, SELECT_BY_TICKET) != TRUE) {
      ErrorCode = GetLastError();
      Print("Error selecting order ", LongOrder, ": ",
            ErrorDescription(ErrorCode), " (", ErrorCode, ")");
      return(-1);
   }
   else if (OrderCloseTime() > 0) {
      Print("Order ", LongOrder, " closed: ", OrderClosePrice(),
            ", at ", TimeToStr(OrderCloseTime()));
      UpdateOrder(ShortOrder, 0, 0);
      return(1);
   }
   if (OrderSelect(ShortOrder, SELECT_BY_TICKET) != TRUE) {
      ErrorCode = GetLastError();
      Print("Error selecting order ", ShortOrder, ": ",
            ErrorDescription(ErrorCode), " (", ErrorCode, ")");
      return(-1);
   }
   else if (OrderCloseTime() > 0) {
      Print("Order ", ShortOrder, " closed: ", OrderClosePrice(),
            ", at ", TimeToStr(OrderCloseTime()));
      UpdateOrder(LongOrder, 0, 0);
      return(1);
   }
   return(0);
}
//+------------------------------------------------------------------+
//| Expert initialization function                                   |
//+------------------------------------------------------------------+
int init()
{
   Dig = MarketInfo(Symbol(), MODE_DIGITS);
   Points = MarketInfo(Symbol(), MODE_POINT);
   Print("Digits = ", Dig, ", Points = ", DoubleToStr(Points, 5));
   if (!IsDemo() && !IsTesting()) {
      MessageBox("Wealth Warning! This expert is for educational purposes only." +
            " It should NEVER be used on a live account." +
            " Past performance is in no way indicative of future results!");
      Print("Initialization Failure");
      return(-1);
   }
   InitSystem();
   Print("Initialized OK");
   return(0);
}
//+------------------------------------------------------------------+
//| Expert deinitialization function                                 |
//+------------------------------------------------------------------+
int deinit()
{
    Print("DeInitialized OK");
    return(0);
}
//+------------------------------------------------------------------+
//| Expert start function                                            |
//| Executed on every tick                                           |
//+------------------------------------------------------------------+
int start()
{
   if (!Initialized) {
      return(-1);
   }
   else if (Running) {                    // Are we in a trade at the moment?
      if (CheckExit() > 0) {              // Yes - Last trade complete?
         Initialized = FALSE;             // Yes - Indicate we need to reinitialise
         InitSystem();                    //  and start all over again!
      }
   }
   else {
      if (CheckEntry(Lots) > 0) {         // Entered a trade?
         Running = TRUE;                  // Yes - Indicate that we're in a trade
      }
   }
   return(0);
}

You can also download the source code here.

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