Million Dollar Pips Logo
Price: $99

Million Dollar Pips

Added on April 30, 2012 04:51 AM
(3.5 / 5)
Trading style: scalping
Currency pairs: EURUSD
Time frame: M1
Money-back guarantee: 30-day
NFA compliance: Yes

The Million Dollar Pips EA is a popular forex bot that uses an aggressive scalping strategy to profit from the market. Trading from a one minute chart, Million Dollar Pips makes a lot of trades per day on its default setting, although such settings are customizable. The Million Dollar Pips website claims to have turned an initial $250 deposit into nearly $1.3m in just one year, using the method mentioned above – one of the boldest claims on the market today. Despite the dubious nature of this claim, MDP does possess some interesting features – features that could in fact make this EA a nice little earner.

Method

The Million Dollar Pips EA is a hardcore scalper that is able to fire off numerous scalping positions per day trading a number of markets (EURUSD, USDJPY and GBPUSD). It is not uncommon to see 20 or so trades per day using MDP as it opens trades with the frequency and accuracy of a well-oiled machine. The system has been run on default settings for risk, money management and trading frequency, however as noted earlier, these setting are customizable. In fact, settings that restrict the number of trades have been shown to do better than more vigorous strategies in some cases.

MDP uses technical indicators combined with price action signals to initiate short, scalping trades that typically win only a few pips a time and last less than a minute in duration. This illustrates the crucial point about the Million Dollar Pips EA; the frequency and small average win mean that broker settings must be exceptional for MDP to return a profit. Not only must low spreads from an ECN broker be used, (spreads more than 1 pip are probably too wide for this system), but VPS settings and latency with the broker’s servers need to also be taken into account. It is because of these reasons that actual results when trading the account can sometime differ substantially to the demo system’s trades.

Once such settings are in place, however, the EA is able to perform formidably.

Past Performance

Past performance is shown on the Million Dollar Pips EA website to be exceptional and almost inconceivably so. Is it really possible to be able to turn $250 into over a million in just one year?

Perhaps not, but maybe this is not the point of the MDP’s back tests. Maybe the back tests are simply the evidence of a system that has worked exceptionally in the past - the answer therefore, is that even if the system performs sub-par compared to these results, it will still be performing very well indeed.

As noted, back tests of the MDP EA show consistent profits with very low drawdowns and smooth upward sloping equity curves. Maximum drawdown for the evidenced back test was only 2.58% over the year with an average winning ratio of 64% for shorts and 71% for longs.

Future Performance

Future performance for the Million Dollar Pips EA can be found in a number of places although the future test shown here will come from MDP’s own website which has been verified externally by myfxbook.com

Simply put, the MDP EA has performed exceptionally over the last two years gaining 10,400% between May 2011 and 19 March 2013. Maximum drawdown is a lot higher than in the back tests at 29.6%, although this hardly bears criticism when looking at returns of such magnitude.

Profit factor is 2.06 meaning trades typically win twice as much profits overall as they lose. Expectancy was 2 pips with the average win 6 pips. As mentioned, this is a high frequency trading box with an average trading duration of 48 seconds over the period. Also of note, is the lower win frequency which sits at around 60% for the forward test. Overall, the bot gained 2019 trades over the period and made 4019 pips.

It should be mentioned at this point again that although the forward test is verified and shows exceptional results, it is not easy to emulate these results without access to a broker with ultra-tight spreads and low latency. The nature of high frequency scalping bots is that success relies on mimicking the exact conditions set by the broker. Unfortunately this is not always possible - conditions differ between brokers with some brokers making the market around different price points and others hedging positions against your trades. Managing stops and measuring slippage is another difficulty since these are not always accurately reported in trade sheets.

Forex Monitor Forward Test

Conclusion

In some ways, the Million Dollar Pips EA is a bit of an enigma. The sales talk on the website combined with the unrealistic back test results suggest that something may not be quite right with this bot. However, closer inspection actually reveals a capable performer – as long as the conditions are right and the settings optimized. Fortunately, most settings on the bot are completely customizable which allows for a myriad of possibilities. It’s a good thing - since by customizing the settings, the most can be truly made out of this powerful bot.

As noted, the MDP EA requires favorable broker conditions, most of which may be out of reach for the average retail trader. For institutional traders, the bot is likely to be a nice performer.

Which brings the most important point about the Million Dollar Pips EA to the surface - this is an advanced and powerful bot that is definitely not suited to the beginner. It operates in high frequency, requiring advanced knowledge of systems testing and the ability to get the best out of a high trading bot. For expert traders though, this is an EA to test and to savor. In fact, in an up to date comparison of the top 50 EA’s operating on live forex markets, MDP scored highly. It currently sits in the top 15 of all EA’s based on percentage gained.


Clicky