A couple of months ago FXCM told us that they were working on educational materials to explain the changes involved in complying with the new NFA "hedging" and FIFO regulations to their customers. Here is one of FXCM's new educational videos explaining to their customers how to manage risk in this brave new world of forex orders without built in stops. To summarise, FXCM are introducing a new type of order called "One Cancels the Other" or OCO for short, which will already be familiar to many futures traders.
Only a couple of days ago FXCM were saying that "your MT4 EA may stop working after July 31."
Now FXCM are also saying that forex trading systems (better known as "robots" in MetaTrader land) that use the Order2Go API with FXCM's own Trading Station II platform aren't necessarily going to be working as expected by the NFA deadline either. In an email to software developers FXCM state that:
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We've just added a new instalment to our course on how to build your very own forex trading system. This one explains a new variation on an old boiler room trick that can be used by scammers to show unrealistically profitable test results for MetaTrader robots.
To go with the new lesson we've also added another example to our series of educational MetaTrader robots. This one implements a robot that uses the very same trick to generate results that show no losses whatsoever.
As I was typing this it suddenly occurred to me that here at the Trading Gurus we now have a robot a bit like Forex Megadroid in so far as it would show no losing trades for any period of time we wished to test it over. I tried backtesting our example scam robot using the EUR/USD pair starting from March 20th 2009, and this is what the MetaTrader 4 strategy tester showed me:
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I was browsing the MQL4 forum in the hope of discovering some more news about the apparent delay in the release of MetaTrader 5 when I beheld a surprising sight. In a banner across the top FXCM were promoting their UK operation once more. This time they were being terribly blunt. It's a question we have asked here at the Trading Gurus several times, and here is how the FXCM marketing machine expressed it:
Is Your MT4 EA About To Break? If you're trading through a U.S. regulated firm, your MT4 EA may stop working after July 31.
I clicked on the bright orange "Learn More" button in the hope of learning more, and I discovered that according to FXCM:
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If you recall we didn't have much luck comparing the original MetaTrader version of FapTurbo with FapTurbo Evolution in forward testing. We have managed to do rather better with our backtesting. One of the reasons backtesting FapTurbo Evolution in Dukascopy's JForex platform takes so long, if you follow the instructions in the Evolution manual at least, is that it uses tick data rather than one minute bars like MT4. This makes the results more accurate, but also much more time consuming to obtain. Here's the equity curve we obtained for the period starting on 5th July trading the EUR/GBP pair using the default input settings:
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In all the excitement yesterday I forgot to mention that I also bought a copy of the unevolved version of the FapTurbo MetaTrader robot. I thought it would be instructional to compare its performance alongside the far more expensive FapTurbo Evolution, to discover how much better the new "serious robotic system" compared to the decrepit old "MetaTrader child's play" model.
Having parted with my credit card number for the second time that day, I followed the instructions in the manual and opened a demo MetaTrader account with Steve et al's recommended ECN broker, FXCBS. Apparently this stands for "Forex Central Brokerage Services" and is the trading name of the Fienex Group, who it seems are based in the British Virgin Islands rather than the Bahamas. As I installed yet another version of MT4 onto one of our VPSes and then went through the FapTurbo activation process, little did I realise how limited the capabilities of the original FapTurbo robot actually are. Take a look at the results of our first original FapTurbo forward test:
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Woe is me! It looks like I made a big mistake earlier today when I foolishly tried to save some money by buying FapTurbo Evolution using my own ClickBank hoplink. I really wish I'd read all those emails from the Forex MegaDroid team properly. I got another email from Albert and John this afternoon, and I did read it carefully. I thought it was going to be a reply to my support ticket about memory apparently leaking from their Droid, but I was mistaken.
Instead it was reminding me that FapTurbo Evolution was about to sell out, and if I didn't make a decision quickly I'd lose the golden opportunity to get my hands on Forex MegaDroid Pro (a $699.00 value) today, for nothing, as long as I bought FapTurbo Evolution from the MegaDroid team. I guess that's just the price you have to pay for being a bit too hasty. Now I'll have to wait for the launch of the shiny new MegaDroid, all the while regretting my earlier impetuosity.
Perhaps some kind reader who wasn't as dumb as me could let us know what we are missing. Does the Pro version of the Droid somehow manage to combine "artificial intelligence" with a "serious robotic system"? Have they plugged the hole its memory leaks from yet? So many questions, and so few answers.
One thing we do know though, because Albert and John mentioned it in their email. It uses the MetaTrader platform, not Dukascopy. Professional child's play I suppose.
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At the last count I had received 28 emails over the last few days advising me that "FapTurbo Evolution is LIVE!" and such like. Five of them were from the Forex MegaDroid team. I was a bit confused because I was sure that I got a few emails 2 or 3 weeks ago telling me about a robot called FapTurbo Swiss, which sounded a lot like this new one. Clearing my thoughts, I followed one of the plethora of links to the FapTurbo Evolution sales page, which told me at the top that:
The move away from MetaTrader into serious robotic systems was the smartest thing the FapTurbo developers could do. NO MORE METATRADER CHILDSPLAY!
With all the problems we've been having getting MetaTrader and Forex MegaDroid to work smoothly together I thought they might well have a point. In one of their emails the MegaDroid team had told me that:
If you thought of getting a copy of FapTurbo Evolution then do so NOW!
so I did. Apparently:
"Once the FapTurbo team sells the 2,000 available copies, it's off the market for GOOD!"
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Our adventures in MetaTrader land with the Forex MegaDroid took a sinister turn last night. The robot didn't make any trades but it wasn't completely idle. First it lost its memory, then it killed another robot. Maybe it was jealous and decided to stop a competitor from profiting whilst it could not? Maybe it just went totally out of its mega-mind?
I checked the UK VPS we use for live account testing first thing this morning, to discover that one of the copies of MetaTrader 4 that had been happily running an expert advisor last night, and which unlike the Droid had been making money too, had disappeared from the screen. Further investigation revealed the culprit. It was the Droid that did it! Take a look at this screenshot:
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As our regular readers will know we've been having a few problems getting consistent results from our Forex MegaDroid backtests. We've also had a major problem with our forward tests. The robot hasn't traded for weeks! However last night the Droid leapt back into action with avengeance! Please bear with us while we explain what our various virtual private servers discovered for us while we slept.
We have a VPS in the United Kingdom running a copy of the robot trading real money on a live account at Alpari UK. Last night this Droid did manage to earn us some much needed moolah. Take a look:
More on The Forex MegaDroid Forward Testing Fantasia – Variation 1
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In a recent letter to the Commodity Futures Trading Commission the National Futures Association commented on proposed further increases in net capital requirements for Futures Commission Merchants and Introducing Brokers.
Whilst the NFA:
Recognizes that the recent financial crisis has justifiably heightened concerns among all regulators that financial institutions have adequate capital appropriate for their specific business risk.
they also say that:
We are very concerned about the current suggestion of increasing the ANC requirements for FCM/BDs by arbitrarily combining the CFTC and SEC capital requirements. While this approach may be appealing in its structure, it is a step backward and embraces a simplistic capital approach rather than being reflective and offering an approach that adequately measures specific firm risk.
More on NFA "Respectfully" Criticizes SEC Capital Requirements
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