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Wednesday, September 14, 2011

FreeFXTradingRobot Review

This week's review is for a system which you can obtain for free here. The free version covers EURUSD but they have a full version of the system which covers USDCHF, EURCHF and USDCAD. For many of you, the free version will probably be enough.  The paid version retails for $77 and I suspect when you follow the link there will still be "14 copies" left (if not more!).

The free Robot is very much bare bones - there is no manual or installation instructions. You get an email with the .ex4 file attached and you have to drop the file into your Metatrader experts folder. You may then need to exit and reload Metatrader before the robot is listed.

This strategy advertises itself as a low drawdown system. The Relative Drawdown of their EURUSD example is 15.7%, but in my tests it's actually lower.

One issue of concern is the StopLoss. It's set at a staggering 800 pips, with a TakeProfit of 70. Our tests haven't come across an environment when this was an issue, but I wouldn't want to be holding a position when this proved to be the case.

In their defense, they do default to a cautious 0.01 Lot size and Optimization is selected as default (our tests do not use Optimization).

Comparative Test Period

As before, we use our three test periods to compare performance with other FX Robots. We default to using no Optimization, 0.1 Lots, $10,000 starting capital, trading Long&Short in EURUSD on a 15-minute timeframe.

The time frames are:

March 31st 2000 - 2001
June 29th 2003 - 2004
May 17th 2001 - 2002

Comparative Results

The initial results were promising. The Robot enjoyed a very high win percentage which offered a sizable Profit Factor. The Relative Drawdown was also very attractive.

The cash:equity curve show the steady returns

Compared to our current leader, Forex MegaDroid, how did it perform?

Comparisons were very favourable (particularly for a free system). In terms of Net Profit it only offered 28-81% of Forex MegaDroid returns, so the robot didn't bank as much. But the returns offered came with a considerable drop in Relative Drawdown - well over half the drawdown of Forex MegaDroid. The Win Percentage was also very high at over 99% winning trades.

Random Test Period

The robot was also tested against three randomly selected 12-month periods, between 2000 and 2010. These periods were:

January 4th 2005 - 2006
July 12th 2007 - 2008
January 25th 2000 - 2001

Random Test Results

As with Forex MegaDroid, the performance of the robot was not as high in more recent years. This may reflect strategies which were designed optimized for the early part of the decade (or before) and subsequently don't perform as well in the 'post-publish' years (although I have no idea when this strategy or others were first published).  The maxim "past performance may not reflect future performance" rings true for any of these robots.

Despite this, the robot did return a small profit and Relative Drawdown and Loss per Trade was not horrific. The cash:equity curves looked like this:

For the July 12 2007 - 2008 period I ran the strategy again, this time using Optimization. Unfortunately, the end result dropped the profit from $601 to $574 and increased Relative Drawdown by 0.02%.


For a free system, this is not a bad place to start. The robot has a high win percentage because of the weighting towards quick profits and a massive stop loss - although during the backtest it did adjust the stop loss, so getting hit for 800 is unlikely but the fact that it's there means it can happen.

For now, it holds the second best strategy ranking - but it's still early days.

If you are looking to trade other currencies beside EURUSD you will need to shell out $77 for the full version.

The creators offer a number of other products (none of which I have purchased or tested), including "50 Forex Trading Secrets", a Currency "Masters" club, and a Forex Trading Apprentice - which is apparently closed to the Public(!), and a second Forex Trading Apprentice - which is open to the public - but has annoying 'Do you want to leave this page' popups (you have been warned!).

Our Current Strategy Leader is: