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Price: $199

Forex Fancy Bot

Added on April 12, 2013 06:22 AM
(4.5 / 5)
Trading style: breakout
Currency pairs: EURUSD
Time frame: M15
Money-back guarantee: 30-day
NFA compliance: Yes
License: 1 real and 5 demo accounts

Forex Fancy Bot is a new EA and was officially made available to the public on March 20th of this year. So far, the bot is performing well and achieving an average monthly gain of just over 3% at the time of writing. The bot comes from the same group that brought us the Black Belt EA and this appears to be another welcome addition. The EA trades EURUSD on a 15 minute timeframe and uses two independent breakout strategies that have impressive track records going back the last 13 years. As well as this, the bot has been stress tested using walk-forward analysis and Monte Carlo analysis.

Strategy

Forex Fancy Bot trades EURUSD using two breakout strategies combined. It trades on the 15 minute time frame and only enters positions at the open of the bar. Even though each strategy is shown to work independently of the other, the strategy works best when both strategies are combined and leads to an almost doubling of profits.

By using two breakout strategies, there are occasions when the bot will open two trades in the same direction. However, since each strategy has a different stop loss level, the result is a system that suffers fewer whipsaws. For example, if the market is choppy and one trade gets stopped out, the other trade will more than likely still be working and able to capture the profits when the move finally continues.

Another reason why this bot stands out from the rest is that if it does receive a signal in the opposite direction it will immediately sell and reverse its positions. This is unlike some other, less successful, bots that simply wait for a stop loss or profit target to be hit before being able to enter positions in the new direction. Furthermore, trading on the open means tests between brokers will be more alike. Spreads are not the main concern here, which is encouraging, although the developers do recommend brokers that can guarantee spreads of 1.5 pips or lower.

Forex Fancy Bot likes volatility and does a good job of capturing break out patterns. It has been set up to trade only during the European session, which is a nice touch, since it removes the kind of fake breakout signals that can often occur during the Asian session.

In terms of money management, Forex Fancy Bot uses robust techniques to limit drawdown and will only ever invest 2% of capital. It also has a fixed lot money management approach for smaller accounts.

Stress Testing

There are few developers out there that go to the trouble of stress testing their products with walk-forward analysis and Monte Carlo analysis, so it bears a little further explanation as to what this entails.

Essentially both methods are fairly sophisticated ways to scrutinize a trading system to make sure it is statistically sound. Walk-forward analysis involves optimizing a system over a set period and then testing those same settings over a period of ‘clean’ out of sample data in the future. In this case, Forex Fancy Bot has been tested over one month and then run over a 2 week period in the future. This method was repeated numerous times to reduce the chance of any curve fitting.

Monte Carlo analysis on the other hand, involves testing every setting combination over different periods. The result is a study of 100,000 iterations that show what the worst possible scenario is likely to be. In this case, Forex Fancy Bot has shown a worst case drawdown of just 6.9% on fixed lots.

Past Performance

The developers of the Forex Fancy Bot have gone to great lengths to provide a number of 13 year back tests on EURUSD and have broken down the data into yearly comparisons and also monthly analytics.

One test was run using the variable risk setting and produced a total net profit of $22,699,284 over 13 years. Profit factor was 1.62 with a maximum drawdown of only 11.3%. Another test used fixed money management rules and produced a gross profit of $50,000 with a drawdown of 1.52%. 

Over 13 years, the Forex Fancy Bot did not have any losing years although it does not win every single month. The bot is actually seen to have been improving in recent years.

Future Performance

The live performance of a system is often the most important consideration for traders and the Forex Fancy Bot has one live test already going that has been verified by myfxbook.com.

The live test was started in February and is going well so far with a gain of 7.43% over this time. The maximum drawdown so far has been 8.2% and profit factor is currently 1.22. Expectancy is excellent at 2.8 pips. This means the system has an average profitability of 2.8 pips for every pip risked. This is especially good considering the % of profitable trades is currently quite low at 36%. Average trade length is just over three hours.

Conclusion

There has some been some confusion among traders lately as to whether or not the Forex Fancy Bot is linked in any way to some of the other successful bots on the market. However, it is made clear on the web site that the Forex Fancy Bot is based completely on its own strategy and optimizations.

For what it’s worth, this is one of the better forex EA’s on the market and it does not necessarily need ultra-tight spreads to work either. The Forex Fancy Bot captures profits using two simple but complementary breakout strategies and outperforms many other systems handily.

But what sets this bot apart, is that it has been tested using the latest statistical techniques. Walk-forward analysis and Monte Carlo analysis are robust procedures for system validation and so far have proved this bot to be profitable over long periods, and against all manners of different conditions – so far those tests are proving to be right.


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