US based forex brokers that offer the MetaTrader platform will have some work to do to comply with the latest regulations from the National Futures Association, which will be introduced on May 15th. So will the developers and users of a lot of forex "robots".
New NFA compliance rule 2-43(b) (Offsetting transactions) will put an end to the practice of having both long and short positions open in the same currency pair at the same time, commonly referred to as "hedging". This ability is relied on by some expert advisors, which will need to be rewritten before the deadline. Many users also run more than one robot on one currency pair, and this will be impossible to do successfully after May 15th.
Using more than one forex trading system at a time is an effective way of gaining some valuable diversification, so this could potentially be a major problem. Some brokers allow one individual to open numerous accounts, which could provide a solution. However this will cause yet another problem – a need to put more total capital into all those new accounts, or at the very least to be prepared to frantically transfer cash on a regular basis from an account that is showing a healthy profit to one where the robot is experiencing a significant drawdown.
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Yesterday I received an email from Forex MegaDroid support. It seems as though I'm not the only one having some trouble getting profitable backtest results. Here is an extract:
Due to the many variations in broker-end settings (server time offset, trading times, differences in pricing and spread) coupled with the fact that some brokers implement Daylight Saving in actual trading but do not always apply it to their back-test data, users have experienced a lot of confusion and frustration while attempting to produce reasonable back-tests.
We are therefore requesting that all users follow the instructions in the manual to download and install MetaTrader from the ForexMeta website for back-testing purposes.
It seems as though Albert and John are keen for users of their robot to take a good look at the ForexMeta website. I wonder why that is? They recommend them in the MegaDroid manual too:
We personally like ForexMeta as they are extremely helpful, they do not penalize robot users (unlike some brokerages)….. However you are free to use any MetaTrader 4 broker you wish.
If you can use Forex MegaDroid and other forex trading systems with any MetaTrader broker, which one should you choose? More on this thorny subject soon.
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As luck would have it a new forex "robot" launched to great fanfare last week. Unfortunately apart from everything else I'm moving house at the moment, so I didn't notice all the hype accumulating in my spam folder until well after the day of the big launch.
Forex MegaDroid apparently uses some new "artificial intelligence" technology called "Reverse Correlated Time And Price Analysis" (or RCTPA for short) to predict "the immediate future with 95.82% accuracy" and/or "with an 81.26% Accuracy Rate Over The Next 2-4 Hours". The product is a snip at only $97.00 as I write this, although apparently the price is going to increase real soon now. Of course, if you buy it using your own Clickbank hoplink it actually costs a lot less than that, and I couldn't resist the temptation to do just that.
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