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Forex Hippo - Expert Advisor Review

The Forex Hippo website consists of yet another long sales letter page. 8O

Forex HippoIt tells the story of Matt Robinson who was fed up with his job, fed up with everyone at work, fed up with losing money and fed up with fraudsters. In fact the poor chap seemed so fed up with his lot in life that I'm quite surprised he didn't top himself.

Instead though, Matt decided to quit the rat race and start selling his Forex Hippo robot which he describes as "The Real Deal". Since becoming Hippo-tised our hero has become a full-time forex trader and now "earns as much money as a doctor". Wow!

Forex Hippo allegedly gulps up profits, so I sincerely hope that it doesn't gulp up any of my money by mistake! Let's try to find out.....

Forex Hippo comes with its own self-installer. The PDF instruction manual is easy to understand. The manual is 23 pages in length, but only its last few pages are of any real relevance, as most of the manual explains how to install MT4 and the Hippo EA.

About the EA

Forex Hippo works on eight different currency symbols, EUR/USD, EUR/CHF, EUR/GBP, EUR/JPY, USD/CHF, USD/JPY, GBP/USD and GBP/CHF. Forex Hippo is attached to 1-hour charts and seems to be a trend following system which acts on a combination of several different indicators to enter its trades.

The user is required to input a number of external parameters to control things like stop-loss and take-profit levels, as well as being able to decide whether to close positions out before the market closes on a Friday, or whether to even bother trading on a Friday at all. I guess now that Mr Robinson is earning as much money as a doctor, he can probably afford to take Fridays off.


Setting Forex Hippo up

Forex Hippo users have the choice of trading either fixed lots or variable lots which risk a specified percentage of the free margin on the account. The default setting is to risk a whopping 15% on each trade - something that I'm not happy with, especially if all 8 symbols are being traded simultaneously. Risking this much could theoretically produce astronomical returns, but this sort of risk could also blow the account right out of the water if the stop-loss on several symbols were hit at the same time, so I don't intend to even go there. I was taught to never risk more than 4% on a single trade, so that's the setting I intend to use in my tests.

There are several other settings that the user can adjust including a couple of filters for trade entries and exits and an option to use "Stealth Mode". The Stealth Mode sets a dummy protective stop-loss and take-profit level on the broker's server and the EA will close out of trades automatically once the true SL or TP is reached.

Despite offering all of the different parameters to its users, the Hippo manual then advises that all of the settings be left at their default value with the exception of 3 or 4 values which should be altered for the different symbols that Hippo can be used with. If something ain't broke, I don't believe in trying to fix it so, aside from lowering the risk level, I dutifully followed the instructions and left everything alone unless otherwise stated.


The Strategy Tests

Following the recommended settings within the manual, I set up 10 year backtests on some of the suitable currency symbols. I didn't encounter any problems in the tester, so I've published my results below as I suspect they'll speak for themselves. I also noted the spread which was used for each test.

The win rates and SL and TP levels vary widely from one symbol to the next, so you'll need to look at each test report in closer detail for a better understanding.

GBPUSD - 2.9 pips spread
Strategy Test

EURUSD - 2.8 pips spread
Strategy Test

USDJPY - 2.6 pips spread
Strategy Test

EURGBP - 2.6 pips spread
Strategy Test

Although Forex Hippo can be used with 8 currency symbols, I decided to give up testing after just 4 symbols as the results weren't exactly blowing me away.


Conclusion

Clearly Hippo's strategy test results show that some symbols work better than others and that, over the course of 10 years, some years will be good and some years will be bad. I suspect the biggest limitation is that Hippo is inflexible in its use of a rigid SL and TP. The fact is that market conditions are constantly changing, so it's no real surprise that the best SL and TP levels one year won't necessarily apply the following year.

With this in mind, I suspect that Hippo could be better optimised for the last 6 or 12 months and it will probably continue to perform if it is regularly re-optimised.

As an exercise, I decided to use a script to merge the four test reports into a single report. The merged report isn't entirely accurate because it discounts the compound money management effects of running multiple symbols concurrently. Strangely enough, the report does show an overall profit for the 10 years.

With a bit more time and effort than I'm prepared to put in, I suspect that Hippo could be improved upon and I would describe it as "work in progress". Anybody who chooses to purchase Forex Hippo could conceivably get some good returns through spending a bit of time and effort in selecting the best settings.

Merged Strategy Test

Anybody using Hippo needs to bear in mind that each currency symbol will only take around 70 or 80 trades a year and it isn't what I'd describe as a prolific trader. As Hippo only has one open order at a time, NFA hedging and FIFO compliance isn't a problem.

The one thing I did notice is that the spread is deducted from the TP and SL levels when using the stealth mode. In other words, if you set a TP of 30 pips and the spread is 2 pips, then the trade will close when the trade is 28 pips in profit. I ran a quick comparison test with the stealth mode switched off and discovered that the spread wasn't being deducted, so I would suggest that there's a bug in the code. It's therefore also possible that my test results would have improved if I had ran the tests with stealth mode switched off.


Forward Tests

As part of my testing, I've set Forex Hippo up on a $5k Alpari UK demo account trading all eight suitable currency symbols variable lots and risking 4% of the account on each trade. The exception is the EUR/JPY cross where I'm only risking 2% as per the guidelines in the Hippo instruction manual.

The other EA settings are all as per the guidelines within the manual.


You can monitor Forex Hippo's performance at MellyForex by clicking here.

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