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.
Almost every Commercial EA vendor will provide the corresponding backtest data. One should download or request a Demo Version to fully assess whether the data can be duplicated.
This is one of the most popular MT4 EAs in a third party Forex EA sales sites. Not only is it ranked on the front page, but all users give 5-star reviews. The vendor said the EA was designed with advanced algorithms and utilized deep learning technology, providing the MT5 Tickdata backtest report, the yield curve of EURUSD, AUDUSD, GBPUSD was a straight linear rise. (Tickdata is the abbreviation of Tick-by-tick data. It's a type of financial market data that records every individual transaction that occurs for a particular financial instrument, such as a stock, commodity, or currency pair. For currency pairs, the Tickdata currently available is based on M1 Timeframe.)
About the EA
Backtest of EUR/USD provided by the vendor
After downloading the demo version, we ran a Tiackdata Backtest on EURUSD in MT4, and the yield curve was basically the same as the vendor provided. (Default Setting, Spread= Fixed 1 pip, No Slippage)
Tickdata backtest from 2010
The price of this EA is $938, which is slightly higher than the other EAs on the site, but it is certainly a Holy Grail to have such a consistently profitable EA. Backtesting results show that an initial investment of $10k generated $130 Million after 13 years in EURUSD. The initial one-time $938 investment seems very cheap.
However, after the mood calmed down a bit, a new question arose: With such a stable and profitable EA, why would the vendor sell it at such a low price of $938 instead of trading it himself? In addition, in the spirit of being highly responsible for our own money, we tried to modify the timing of Tickdata and re-tested it with the exact same quote.
A miracle did occur at this time, and we saw that the results of all backtests were basically a steady decline in a straight line.
Tickdata backtest from 1975
Tickdata backtest from 1982
Comparing the backtest results before and after modifying the timing of the data, we have to think that this is a potential Scam EA.
Conclusion
1. Before purchasing any Commercial EA, be sure to run a Tickdata backtest.
2. It is necessary to modify the timing of the Tickdata for the testing.
3. Even if the results are satisfactory, it is necessary to think differently: From the author's point of view and psychology, assume you have created a stable and profitable EA through years of study and practice, why don't you make money by trading yourself, but sell this EA? Especially most No DLL EAs can be decompiled very easily within a few minutes. Then think about the various potential problems from that perspective.
Check our website to see this full trade copy service and other fully automated systems
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 a commercial 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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Editors’ Picks
EUR/USD flat lines below 1.1900; divergent Fed-ECB expectations offer support
The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.1835-1.1830 region and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.1875 area, remaining nearly unchanged for the day and staying within striking distance of an over one-week high, reached on Tuesday, amid mixed cues.
GBP/USD slips heading into the Thursday trading window
The Pound Sterling pulled back from four-year highs on Wednesday, weighed down by a combination of Bank of England dovishness and UK political uncertainty, even as the US Dollar weakened on soft labor market revisions.
USD/JPY returns to the red below 153.00 after Japan's verbal intervention
USD/JPY attracts fresh sellers and falls back below 153.00 in the Asian session on Thursday. The US Dollar reverses the strong jobs data-led recovery, weighing on the pair amid the ongoing bullish momentum in the Japanese Yen, helped by Japanese verbal intervention. Japan's PM Sanae Takaichi's landslide election victory also keeps the local currency buoyed. The attention now remains on Friday's US Consumer Price Index inflation report.
Editors’ Picks
AUD/USD stalls near 0.7150 after RBA Bullock's comments
AUD/USD has paused its uptick to near 0.7150 in the Asian session on Thursday, at a three-year high. Cautious remarks from RBA Governor Bullock seem to cap the Aussie's upside. However, renewed US Dollar weakness cushions the pair's downside ahead of US Jobless Claims data.
USD/JPY returns to the red below 153.00 after Japan's verbal intervention
USD/JPY attracts fresh sellers and falls back below 153.00 in the Asian session on Thursday. The US Dollar reverses the strong jobs data-led recovery, weighing on the pair amid the ongoing bullish momentum in the Japanese Yen, helped by Japanese verbal intervention. Japan's PM Sanae Takaichi's landslide election victory also keeps the local currency buoyed. The attention now remains on Friday's US Consumer Price Index inflation report.
Gold holds losses near $5,050 despite renewed USD selling
Gold price trades in negative territory near $5,050 in Thursday's Asian session. The precious metal faces headwinds from stronger-than-expected US employment data, even as the US Dollar sees a bout of fresh selling. All eyes now remain on the next batch of US labor statistics.
Crypto trades through a confidence reset
The cryptocurrency market is navigating a liquidity-driven reset rather than a narrative-driven rally. Bitcoin, Ethereum and major altcoins remain under pressure even as new exchange-traded fund filings continue and selected inflow days appear on the tape.
The market trades the path not the past
The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.
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