How to evaluate an excellent real money account?

Forex EA (Expert Advisor) specifically refers to automated trading systems that run on MT4/5 terminals. EA can automatically monitor the market and execute orders 24 hours a day, effectively avoiding the impact of time, physical strength, emotions and other factors on  manual trading. For more details, please see the Appendix at the end of the article.

It is common to see some Master Traders or Mentors posting screenshots of their trading accounts on Social Media, which gives us the impression of being unbelievable. However, these kinds of screenshots are not enough to confirm their knowledge or ability, we should take full advantage of the details of these accounts before deciding whether or not to subscribe to their services.

A few weeks ago, a client told me that he found a perfect EA, performing consistently and extremely profitable from 2015 until now, with over 1 Million dollars in the account. The EA company's sales representative showed him the live account in action, but they did not post the account to any third party website because of security concerns.

I told him to ask for the investor password and other details to better observe the account. It was only a few hours valid for the account details, the EA company said they would well protect their intellectual property.

The account looked perfect indeed, but I still uploaded the account's trading history to a third party website for further observation.

1. Overall, it looks excellent, from 2015 to 2024, the account made more than $1 Million in profit,  and the current account capital is more than $1 Million as well. However, this account is running  in a Non-Regulated Broker and the curve from 2020 to 2022 is rather flat.

Chart 1: The performance of the EA from 2015

2. We used custom analysis from January 2020 to the present and found that the 3-year profit was only 17%.

Chart 2: The performance of the EA from 2020

3. In 2022, only 3 months' trading history was available.

Chart 3: The performance of the EA in 2022

4. In 2020, only 1 month's trading history was available.

Chart 4: The performance of the EA in 2020

5. Since 2024, the account has only traded one currency pair, GBPJPY.

Chart 5: Trading symbol from 2024

6. The Summary of this account shows that GBPJPY was one of the most losing currency pairs. All other pairs are highly profitable.

Chart 6: The summary of the EA

Why would the vendor not trade those highly profitable pairs and only trade the most losing pair?  Based on the above analysis, the most likely reason is that the vendor deleted a lot of losing trades.  There is no good trading method for him, although GBPJPY has lost more than $80K, but compared with other currency pairs, GBPJPY is still considered a relatively good situation, therefore currently  he has to trade GBPJPY only.

Of course, we can't rule out the vendor spent the 11 months of 2020 and the 9 months of 2022 to  re-optimize the EA, but the likelihood of that is slim to none. All in all, this EA is not suitable for live  trading applications. We'd better leave it alone.

Conclusion

1. It is extremely hard to get a global and nuanced view of an account by accessing it via the investor password only.

2. Always beware of accounts running on a Non-Regulated Broker.

Check more examples of automated trading systems and execute orders 24/7, effectively reducing time and energy on manual trading.

Appendix

Forex EA (Expert Advisor) specifically refers to automated trading systems that run on MT4/5 terminals. In general,  EA is based on proven manual trading methods and experience, built with various technical indicators and coded in MQL language. EA can automatically monitor the market and execute orders 24 hours a day, effectively avoiding the impact of time, physical strength, emotions and other factors on manual trading. EA is one of the most important trading tools for both professional and retail traders.

In addition, through rigorous and scientific backtesting, we can not only test whether the key logic of the EA is feasible, but also have a reasonable expectation of the risk and reward of trading performance in the future.

However, MT4/5 EA is not omnipotent. the MQL language is similar to the C language, the function is relatively  simple. Some complex and/or advanced trading logic can not be expressed well. Then we need to use Java Script  and other languages in eSignal, Reuters Eikon, CQG or other professional platforms to build the trading system.

The series of articles "Commercial EA Review by LinoCapital" aims to provide readers with some principled guidance in selecting and backtesting an EA through our knowledge and experience. Welcome to all kinds of feedback and discussion.

We hope all the traders succeed. Good Luck!

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