I've already got a couple of other EAs in test which could be classified like this as pre-Asian scalpers, and my biggest concern about robots such as this is that liquidity in the market is at its thinnest during these times and there can be issues in executing trades. The inevitable requotes and slippage often means that this type of EA performs well in demo, but fails to live up to expectations when users run the system live.
The attractions of the Real Profit EA, however, are that it not only seems to offer a quite attractive risk/reward ratio by comparison to some of the similar robots available, but that the developer is happy to test his EA using real money live accounts as proof that his product works.
The website contains quite a bit of factual information and isn't the typical single sales letter page which is commonplace with many other EAs. There are both live statements and backtest results on the website, together with a forum which is maintained by the Real Profit EA team to provide support for their users. It is also possible to download a FREE demo version of the EA which enables prospective purchasers to test the EA on a demo account to see how it performs before they buy.
The Forex Real Profit PDF instruction manual consists of 26 pages, and is clearly written and easy to understand. As is normally the case with these manuals, around half of the pages cover how to install and configure MetaTrader 4.
About the Forex Real Profit EA
As I've already stated, this robot trades for just one hour each day and it has default settings for 7 different currency symbols - EURUSD, EURCHF, EURGBP, USDCHF, USDCAD, EURCAD and GBPCHF. In addition, users are welcome to run the EA on any other symbol they choose, but doing so is very much at the user's own risk as it won't have been optimised by the vendor and the user will need to perform his own testing and optimisation.
The EA only opens one trade at a time, so NFA non-hedging and FIFO compliance isn't an issue. In addition, the EA contains a neat little feature which will prevent the EA from opening a trade if there is another trade already opened by a different EA on that symbol. As I say, the feature is a nice idea, but it really needs some other EA developers to follow suit with their products in my opinion, otherwise the feature will only work one-way.
Some days, the EA may take several trades on the same symbol within the same 1-hour session but, at other times, it may go several days without taking any trades. The fact that it works on a number of different currency symbols therefore serves to make the EA more appealing, as it normally finds a trade on at least one of the suitable symbols each session.
The Forex Real Profit EA will also trade only on four days of the week. It won't trade on Fridays so as not to leave any open trades over a weekend, and it won't trade on Sundays in case some market moving news has occurred during the weekend which could impair the EA's performance. In addition, all US public holiday dates are programmed into the EA to prevent it trading then.
The EA trades on the M15 timeframe and, although its precise logic is hidden away securely inside its DLL, I have managed to figure that it gets much of its mojo from the use of Bollinger Bands coupled with an underlying directional filter.
The EA uses a static stop-loss and its initial risk/reward ratio based upon that stop-loss is quite high, but the EA generally manages to close trades well ahead of a SL being hit. This has the effect of lowering the risk/reward ratio (expressed in pips) to a very respectable 1.5. This value is very low for a scalping robot.
Setting Real Profit EA up
I've made no secret of the fact in previous articles that I like to see an EA which is "idiot proof" and easy to set up. I just happen think that if there are only a few external parameters to alter, then there is less opportunity for a user to make mistakes.
The Forex Real Profit EA contains no fewer than 27 external parameters, of which the first 3 are merely cosmetic and serve no purpose whatsoever. I guess that having lots of parameters means that some users feel psychologically that they are in greater control, but I would personally rather see parameters such as the trading times hard-coded into the EA to reduce the risk of error. On the subject of trading times, the EA contains an option to obtain the broker's server GMT offset automatically which is OK for live trading, but this needs to be manually over-ridden in the strategy tester.
There are also parameters for controlling various filters and for controlling the stop-loss and take-profit system. I decided to leave these at their default settings for my tests.
The other adjustable parameters relate to the EA's money management system. Users can decide whether they want to risk a predetermined percentage of the account balance, the equity or the free margin, or they can trade fixed lot sizes if they wish. In my forward testing, I also set the EA not to allow any slippage whatsoever, and I was careful to restrict the maximum allowed spread because of the thin liquidity seen at the times the Real Profit EA trades.
While I'm in my "moaning mode", one thing I found confusing about setting this EA up was that the manual suggested it should trade for two hours a day during the Northern Hemisphere winter and for one hour a day during the summer. Seeing as the trading times aren't automatically detected and need to be input manually, I figured the only way to backtest the second "winter hour" would be to run a series of individual 6 month backtests and merge them into one report. I asked the vendor about this and his reply was that the EA's current recommended trading time is for just one hour a day. I hope that this will be made clearer in the future, and the instruction will be suitably edited, because I have to say that I was a bit confused by this aspect of the setup.
The Strategy Tests
It was my initial intention to test the Real Profit EA on all seven of its suitable symbols, but I had a problem in obtaining any history data for two of those symbols (EURCAD and GBPCHF). It may simply be that the MetaQuotes history centre was having difficulty on the day I tried, but I was able to run good tests on 5 of the symbols and I decided that this would be sufficient for the purposes of my review.
For the strategy tests, I opted to use the Tadawul broker as I have done previously. I don't have any particular preferences for Tadawul, but they don't offer fractional pricing and their fixed spreads are mid-range, so I feel their trade performance in tests is likely to be indicative of what most users should realistically be able to achieve.
Anyway, the test results are below. You can click on any of the equity curve images to view the full report.
Tadawul - EURUSD - 2.0 pip spread, 5.0 pip stops level
Tadawul - EURGBP - 3.0 pip spread, 5.0 pip stops level
Tadawul - EURCHF - 3.0 pip spread, 6.0 pip stops level
Tadawul - USDCHF - 2.0 pip spread, 5.0 pip stops level
Tadawul - USDCAD - 4.0 pip spread, 8.0 pip stops level
I did notice in the tester logs that there were a lot of order send and close errors in the logs because the price isn't being normalised when the order is being sent. This is a straightforward matter to resolve and I hope the problem is rectified with the next update.
Despite being unable to test the EA on two of its symbols, I strongly suspect that the equity curves for those symbols would look very similar to the curves of the other five symbols. My only concern is that the Tadawul fixed spread for both of those symbols is a massive 8 pips which is about the same as the average profit per trade of the other 5 symbols. I have to question, therefore, the logic in using those two symbols on anything other than an ECN/STP broker and I suggest the maximum allowed spread should be controlled very tightly, even if this were to result in some trades not being taken.
The equity curves in the strategy test reports above very much speak for themselves, but my biggest concern from the outset has been whether a similar level of performance can be replicated going forwards and market liquidity may be an influencing factor in this.
Another concern is going to be the fact that some trades look to have been opened and closed within a minute (which is, by nature, the definition of scalping). Many brokers impose little known rules such as "the 90-second rule" on their clients, meaning that trades need to be open for a minimum length of time before they can be closed. This is one method employed to prevent clients from scalping, and it's quite possible that the Real Profit EA could fall victim to it on some trades with brokers using a minimum trade duration policy.
My final concern relates to the importance of using a broker with a low stops level. The Real Profit EA likes to close trades ahead of the take profit level and, if the stops level is too high, it will be unable to do so and performance of the EA will be impaired. If your broker employs too high a stop level, the solution may be to set the "UseTakeProfit" parameter to false, but I haven't tested this setting to compare performance.
Clearly, the choice of broker is going to be very important for the Real Profit EA, as it will be necessary to choose one with a tight spread and low stops level, who really does allow scalping.
I also ran my backtests above through a risk simulator, to see what else I could learn about this EA, and those results are tabulated below.
It's pretty clear that, provided the backtests can be replicated live, users of this EA are likely to experience a very high level of satisfaction. The Monte Carlo Simulation suggests that only around one in five users is likely to see their account drop below the initial deposit, and the deposit needed to start running the EA with zero risk of ruin looks to be very low by comparison to the vast majority of EAs. The fact that Real Profit EA can be used on a number of symbols qualifies it as a frequent trader, and the suggestion is that recovery from a drawdown should be quite quick.
Before proceeding, and before I get an inbox full of emails from readers of this article, I should perhaps point out that the maximum drawdown of a couple of the symbols in the table is less than the minimum deposit which the simulation suggests is necessary to start running the EA. This is because the probability of hitting the maximum drawdown straight after loading the EA is very remote, but it is a possibility nonetheless and users should at least be prepared for this possibility and deposit sufficient funds to cover the consequences of it happening.
The proof of the pudding with this EA is clearly going to be whether it can replicate the great backtests results going forwards. If it can do so, then it will certainly be worth every penny spent, and I recommend that users check back here regularly to monitor its ongoing performance in my forward test.
For these tests, I've chosen to use a $5k demo Forex Central Clearing account. This is an ECN account and the demo price feed is identical to the live feed, so it will hopefully portray the Real Profit EA in as accurate a light as is possible. The account uses raw spreads and adds a 1.0 pip commission per round trip trade.
The EA has been set up to risk 3.5% of the account balance on each trade on all 7 of its recommended currency symbols. In my opinion, a higher risk level would inflict too much damage if multiple SLs were hit together.
I've set the slippage parameter to zero and am also limiting the maximum allowed spread in pips as follows:
EURUSD & USDCHF - 2.0
EURCHF & EURGBP - 3.0
USDCAD, EURCAD & GBPCHF - 4.0
You can monitor Forex Real Profit EA's performance at MellyForex by clicking here.