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Forex Thor EA - Expert Advisor in Forward Test

Forex ThorIn Viking Norse mythology, Thor was a hammer wielding thunder god, and it's my best guess that this old mythology has played a big part in the naming of the Forex Thor EA which I've just put into forward test at MellyForex. Was it really that difficult to make my deduction by looking at the streaks of lightning and the hammer which are clearly displayed on the Forex Thor box? :roll:

Anyway, now we've established that Inspector Clouseau needn't worry about the safety of his employment, please allow me to tell you what little snippets of information I know about Forex Thor.

Firstly, the Forex Thor EA is a scalper which, at the time of writing this article, is brand new to the market. It runs on the 30-minute chart timeframe of the EURUSD symbol, and I have to be be perfectly honest and say that I'm not entirely sure what logic it uses to get its mojo. The video on the developer's website talks about money flow, so I can only hazard a guess that trade decisions are volume related.

The literature suggests that the EA employs a combination of three different strategies, and each strategy can either be used independently of the other two, or all three strategies can be used together concurrently. From the developer's own backtests, it looks at first glance that employing all three strategies together may render the EA as NFA non-compliant in terms of FIFO. The backtests certainly showed Forex Thor as having more than one trade open at a time, and the stop-loss handling didn't look to me as though it complied with FIFO. It's my initial suspicion, therefore, that US-based traders who want to run Forex Thor with all three strategies will have to run the EA on three separate broker's accounts, with only one strategy per broker. Obviously users in the rest of the world won't have any problem trading all three strategies together.

An examination of the developer's own 2011 strategy tests (it's a 7.90MB file download if you're on a slow connection) suggests to me that Forex Thor is a reasonably frequent trader, as it looks to take between 15 and 20 trades each week across all three of its strategies. Those strategy test results also suggest that the EA doesn't employ any time filtering, as it seems to place its orders 24/5. I did notice, however, that Forex Thor may take several trades within very quick succession on some days yet, at other times, it may go several days on end without taking any trades whatsoever.

Forex Thor appears to work by placing individual stop orders and waiting for a fill. The stop orders are very close to the market price, and the EA frequently adjusts those orders very quickly before they are filled as it attempts to get a better entry level. The EA also recognises if the trade entry criteria have changed, in which case it will have no hesitation in deleting a pending order ahead of a fill. Having entered a trade, Forex Thor trails a tight stop-loss and also dynamically adjusts its take-profit. The outcome is that trade durations are generally only a minute or two with an average winning trade size of around 7 pips and an average loss of about 3.5 pips. The expected win rate is around 75%, and the combination of low risk/reward ratio and high win rate means that Forex Thor has the potential to be very profitable.

This style of trading does have a drawback, however, and it is most likely that the EA is best suited to ECN brokers with the tightest of spreads who permit scalping and who have stops levels of only 0.1 pip so that the EA can work efficiently so very close to the market. With that in mind, I've set my copy of Forex Thor up on a $5k FXCC demo raw spread ECN account, in the hope that I can exploit the EA's true potential. FXCC have no issues with scalping whatsoever and, because they don't need to worry about the NFA rules, I'm able to run all three of Forex Thor's strategies concurrently.

For the time being, I've followed the developer's recommendations and set Forex Thor up using the default risk setting. FXCC do charge a 1.0 pip round turn commission per trade, and I do hope that this won't impact upon profits. Ordinarily, I would adjust an EA's TP and SL settings to reflect this commission, but Forex Thor doesn't provide this option.

I'm permitting a maximum spread of 2.0 pips and have set the slippage level to 1 (I assume this means 0.1 pip as FXCC are a 5-digit broker), as this is the minimum value allowed by the EA.

As with my other robots in test, you can monitor Forex Thor's performance at MellyForex by clicking here. If Forex Thor performs well over the next month or so, that will be the point in time that I may conduct a more detailed review.

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