For the purpose of this review (and others on this site) I will take the plunge by purchasing their software to see if there is anything of merit to this system. This way, you don't have too.
On the positive front, this is one of the cheaper systems at $67. So, what do you get for your money?
After purchasing you are taken to a download page. On the download page they make the case for FinFx brokers - should you be looking for a broker, although the MetaTrader installer will recommend a broker for you too. Next on the download page is an additional Robin Hood Mechanical FX System available for free as part of the MegaDroid package (presumably, it's not as good as MegaDroid...). I may test this system in my next post. Below the Robin Hood system are links for the MegaDroid installer and manual.
Installation was painless with the .exe file. After restarting MetaTrader the MegaDroid system appeared in my list of Expert Advisors.
The manual shows a number of revisions (to the manual) dating back to March 2009 when v1.00 was released. The most recent change was August 2010 on version 1.30, and it looks like MegaDroid is on version 1.35. So it appears there is an active upgrade (improvement?) process for the software which can't be bad. This is a review for v1.35.
The manual has a lengthy Disclaimer and Risk Warnings. In their Forward they talk about measures brokers make to thwart FX robot strategies (in general). I don't know if this is to protect against claims Forex MegaDroid not working or if this genuinely the case - I have no idea.
The next section of the manual outlines the Getting Started process. MegaDroid requires MetaTrader 4 (but presumably will work with MT5 too???). The first part of the manual details installation using FinFX. Next is set up of the Expert Advisors tab which should be set up as follows:
Next the manual outlines a manual install for the Forex MegaDroid files, although the installer handled this process without an issue. However, later updates to the software may require these steps to be completed.
They recommend not using the robot close to major holidays or after the weekend when volatility can be high (good advice).
The robot trades the EURUSD.
When the Expert Advisor is dragged onto the chart the Common tab should be set like this
The manual also goes into detailed explanations of the various Inputs and how to activate them.
Of interest were some of the input features I had not seen offered by the two other robots reviewed here including:
"Stealth": When enabled (default), broker is not informed of true target and stop loss levels. The robot handles them instead.
"Aggressive": When enabled (default), the MegaDroid robot trades two strategies (one conservative and one aggressive) simultaneously.
"NFA": (disabled by default). Trades according to rules imposed by the NFA and should only be enabled on consulatation with your broker.
"S1/S2 Reference": Another work around against brokers targeting robots (these guys seem to take this seriously - Again, I was never aware of this as an issue).
"RemoteSafetyMode" Protects against opening trades during "potentially dangerous periods". Signalling looks to be handled by Forex MegaDroid and apparently "happens very rarely".
"RecoveryMode" Doubles down on losses (enabled by default). This is one I would prefer - and recommend - to keep disabled. If consecutive losses are rare by the system I would prefer to not tempt fate by doubling down if they occurred.
The manual also offers a good explanation on Risk Level and how to set up relevant to the size of your account. It also offers an extensive guide on strategy backtesting.
The only real miss on the Manual was a reminder to input your ClickBank Order number into the Inputs tab to validate your copy!!!
Upon starting the strategy on live this is the information view for MegaDroid with Alpari
Now for the test.
Expert Properties Setup
Starting account is $10,000 on 0.1 Lots on a 15-minute timeframe. The strategy will trade Long&Short and will not use Optimization in line with other comparisons. Because I am using default settings I have left RecoveryMode enabled - although it's a setting I would not be comfortable with (especially if you were caught on the wrong side of the recent EURCHF kerfuffle peg doubled down, trebled down or worse...).
Comparative Test Period
These were three 12-month periods selected randomly for the period January 1st 2000 to January 1st 2010. The three test periods common across all of my robot tests were:
March 31 2000 - 2001
June 29th 2003 - 2004
May 17th 2001 - 2002
Comparative Results
Although it's early days in the search for the most effective (viable) forex robot strategy the initial prognosis for Forex MegaDroid Robot is quite good. Like many of the commercial robots available it uses a loose stop to boost win percentages, but this can be managed by trading a smaller lot size. Where it proves itself is generating consistent profits.
The Cash-Equity curves for the three, 12-month periods are relatively stable. Only 2000-01 shows a slow start before the strategy really got going.
Disabling RecoveryMode (i.e. the double-down on losses feature which I would avoid using where possible) generated the following results.
The robot still performs well despite the sharp loss in net profit, down over 30%. This is offset by the 29% drop in Drawdown and 26% drop in average loss per trade. For a starting account of $10,000 these are still great results over 12 months.
Disabling RecoveryMode and Aggressive settings gave the following result:
The percentage values in this case are relative to RecoveryMode off. Go figure why a less aggressive strategy should show an increase in Loss per trade for two of the three look back periods!
While unlikely to be statistically valid, there was a 6% increase in Net Profit and a 1% loss in Relative Drawdown, when Aggressive and RecoveryMode were switched off.
Random Test Period
Another three, 12-month periods were selected, using default settings - so Aggressive and RecoveryMode were enabled. The three periods were:
November 13th 2006 - 2007
July 24th 2009 - 2010
February 3rd 2005 - 2006
Random Test Results
The results were a little more mixed. The 2009-2010 period was particularly disappointing given it experienced 5 consecutive losses, with the RecoveryMode doubling down factor considered, increased the loss per trade to $334. Disabling RecoveryMode reduced the loss per trade to $185 and increased the profit factor to 1.8 for a Total Net Profit of $2,083 for this period. Drawdown also dropped dramatically to a far more tolerable 12.39%.
The cash-equity curves for the robot were as follows:
Conclusion
This is only the third Forex robot I have looked at and the initial prognosis is good. It has a number of benefits compared to its competitors:
[1] It's cheap; $67 for a piece of trading software is below the typical $150 spot of others
[2] It doesn't overtrade. Based on the aforementioned tests it generates 100 - 200 trades on a 15-minute EURUSD time frame over 12 months. On average, you are probably looking at 1-2 trades ever couple of days.
[3] It can be configured to be less risky. Yes, profits are reduced - but so is the risk of ruin. Profits in reduced risk form are still very good. I strongly recommend disabling RecoveryMode.
Maybe the limits of Forex MegaDroid Robot success in real-time are tied to broker "tricks" as the creators allude too??? I haven't tried trading it live so real results may vary. But until I come across something better Forex MegaDroid Robot is a good place to start.
