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Price: $199

Volatility Factor EA

Added on April 24, 2012 05:43 AM
(5 / 5)
Trading style: volatility trader
Currency pairs: EURUSD,GBPUSD
Time frame: M15
Money-back guarantee: 60-day
NFA compliance: Yes
License: 1 real account for $199 and 2 real accounts for $299

From the makers of the well-received WallStreet Forex Robot comes the Volatility Factor EA version 5.0, an intelligently constructed EA that has been described as the most powerful forex EA on the market.

On first inspection, the Volatility Factor seems to have a lot going for it: A balanced trading strategy based around volatility thresholds, solid back test results and unlimited demo accounts. The big question amongst interested parties therefore remains: Can the Volatility Factor live up to the high expectations from the same designers that brought us the WallStreet Forex EA?

Method

Yep, it doesn’t take a genius to work out what the Volatility Factor EA bases its trading decisions on.

Of course volatility is what trading is all about. In many ways, volatility is a trader’s best friend: Without volatility there would be no market, no profits to chase. On the other hand, too much volatility and we have stops being touched, slippage and margin calls. It is essential therefore to make volatility a prime consideration when creating any trading system, whether it is Forex or any other market.

The Volatility Factor EA uses intelligent algorithms to calculate the volatility thresholds of the market at any given point in time, based on a 15 minute timeframe chart. By using algorithms that are finely tuned to the vacillations of individual markets, the bot is able to determine when volatility has reached a short term nadir. It then initiates a position just as volatility is about to pick up and uses a trend filter in order to make sure subsequent trades are placed in the most favorable direction of the trend.

The onset of volatility is often the best chance a trader has to catch a profitable opportunity so this is a fundamentally sound strategy that, historically, has performed well across a broad range of markets.

Essential to its performance, the Volatility Factor EA uses a number of carefully constructed algorithms that have been hard tested over many years of trading. The result is that the bot is able to profit over several different scenarios; Detecting trend channels and exiting positions when a breakout occurs are just two of the clever ways the Volatility Factor EA is able to beat the market. As well as this, the bot uses advanced money management techniques that can be optimized to the trader’s preference. Detailed guidelines describing how to manage risk are also provided in the user manual.

Stop Loss

It was found that the new 5.0 version of the Volatility Factor EA has as an in-built stop loss of around 50 pips which keeps the system safe from common corrections in the market. Version 4.0 operated with a hard coded 380 pip stop loss so this is a welcome improvement from the designers.

Take profit is initially set up at 20 pips, quite standard for a volatility bot, and works comfortably, since the EA has a very high winner ratio of over 70%.

The EA was designed to work on EURUSD and GBPUSD only, although it is able to trade up to four currencies at any one time. It was found to work well on many other markets such as USDCAD and EURGBP which is encouraging. However, trading other currencies other that EURUSD and GBPUSD could damage the conditions necessary to claim the 60 day money back guarantee.

Risk

Risk settings are entirely customizable with the Volatility Factor EA which means traders can trade within the risk preferences that they feel comfortable with. As shown on the website, the EA offers 3 in built settings – low-risk, medium-risk and high-risk. The EA also supports recovery mode, whereby position size tends to increase during poor periods. However, as explained in the manual this leads to greater exposure so should be treated with care.

It is advised to start off on the medium or low-risk setting at first and then migrate to the higher-risk setting at a later date.

Past Performance

Volatility Factor EA has performed well over historical back tests with convincing upward sloping equity curves in all cases.

A 13 year test of the bot on EURUSD produced a return of 45,865 pips or $458,655. Profit factor was an attractive 1.42 with a maximum drawdown of 14.30%. These are impressive results in anyone’s book but more importantly they are realistic too.

Similarly, a 13 year back test of GBPUSD generated 23,210 pips – a profit of over $230,000. The bot maintained a high winner ratio in all of the back tests. For EURUSD it was 80% and for GBPUSD it was 78.2%. This is typical of the Volatility Factor EA, it manages to maintain high win ratios even against difficult market conditions.

Future Performance

There are a number of future tests available which have been verified by external parties and are testament to the profitability of the Volatility Factor. Most tests convey realistic results – this is not an EA that is going to go broke after using it for the first time, neither does it use unrealistic trading methods such as martingale or recovery systems to make profits. Instead, the EA manages to produce consistent trading results usually with plus 70% winning trades. These results could most likely be improved even further by using an ECN broker as these tests were run using fairly wide spreads in order to test its robustness against difficult conditions.

 

Volatility Factor EA Real Money Account

 

Conclusion

The Volatility Factor comes from a strong family of EA designers that are known for producing high performing, market beating EA’s.

The Volatility Factor is another addition to that group and is able to perform admirably over all market conditions. The quality is there for all to be seen; from the instinctive volatility algorithms with trend channel detection to the excellent performance of individual parameters that can be tuned to an individual’s taste. This is a highly impressive EA and a welcome addition to the forex EA market.


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