Forex Robo Trading

I know in writing these articles it must seem like I’m knocking Metatrader. Metatrader is excellent piece of software that provides a gateway to the Forex markets. Were it not for Metatrader we wouldn’t have a cross broker platform with which to trade on and more importantly, a platform to run advanced Forex Expert Advisor software. However Metatrader 4 does have some limitations, especially when it comes to providing a visual presentation of trading performance.

What I am referring to is the chart that is produced in the detailed Metatrader reports. Just glancing at these charts can be quite misleading as the vertical axis is not a constant metric between one graph and the next. So for example if the balance values being displayed began at $5000 and ended at a high of $5050 then we’d have a line that began at the bottom left of the chart and ended at the top right of the chart. If however the balance values ended at a high of $7050, then we’d also have a line the went from the bottom left of the chart and ended at the top right of the chart. In other words both charts would look extremely similar. When if fact the second result is 40% better than the first.

The clearest illustration of this can be seen by looking at results from three of the Expert Advisors that are currently running.

Gomega Xray

Forex Conqueror

Forex MegaDroid

At face value the 3rd chart for Forex MegaDroid looks by far the most impressive. A nice smooth, steeply rising balance line. And certainly its win rate is very impressive, but unfortunately it achieves that cost of having a very small take profit target.

All is not as it would seem however. These charts are somewhat deceptive. If we were to take these charts and put them on a unified scale, the reality of which EA is performing the best is much clearer.

To try and illustrate the point I’ve point together a rather crude normalized chart showing the relative account balances along with Gomega Xray’s equity balance. The reason it is important to show Xray’s equity balance is because Xray trades on a long term strategy across multiple currencies and at any one moment may have as many as 5 or 6 trades open.

This balance scale on this chart starts at zero, so as to give and even more realistic idea of relative performance. The Megadroid and Conqueror charts have been shifted right to account for a slightly later starting date and the horizontal axis has been stretched so they all end points line up. The Megadroid and Conqueror charts also had to be significantly squashed vertically to match them accurately onto the Gomega chart.