Forex Growth Bot v2.0 Review

Live Performance

Forex Growth Bot home page doesn't have so much marketing stuff to seduce the visitor, while it displays a live performance forward test together with the investor password in addition to some backtests, that's all. The MyFxBook verified forward test was started with a large lot size that was decreased later, so the balance curve in a measure looks off-color.

Backtesting

This backtest is run on an FxPro terminal. As this is about EURUSD, the spread is set to 2.0 and even that's considered high nowadays. All the 4 parameters are left on their default settings, including the lotsize default of 0.1, a bit low but suitable for a starting balance of $10000.

For a trend EA, this is quite fine. If you buy it, you'll be amazed if you run a visual backtest yourself, just to see how it captures the trend as it progresses, this will be a real show.

Although in 2002 it had a rough time, its balance curve is still great. The average win is about 55 pips while the average loss is about 27 pips, resulting in over 1/2 risk/reward ratio. As an ideal act of a trend EA, up to less than half of the total trades are added by its profitable trades, exactly 38%. The quite large 24% max drawdown is only hit in 2002, the only bad year for Forex Growth Bot - the years before and after 2002, the EA had a wonderful behavior, but similar bad periods may face the EA in the future.

It's clear that sometimes the lot size is doubled, even if very rarely. This is explained by the author as this only happens in trade setups with a high profit prospect. It doesn't use more than double the lotsize, so it's still safe.

In conclusion, the balance curve is what matters. The backtest can tell us that periods of "flatness" or maybe slight drawdown may face the EA, followed by periods of awesome great gains.

Backtesting the EA on tick data makes no sense as it deals in hundreds of pips most of the time, but anyway, here is a tick data backtest just to keep in line with other reviews. The real spread data is also used here and these are the results:

It's safe to say that spread has no effect on Forex Growth Bot. However, if you are with a broker that has an average EURUSD spread higher than 2 (if there are still any that do), you should consider switching to another.

This backtest is similar to the previous on to a great extent. The average profit is now 70 pips while the average loss is 30 pips, resulting in a 1/2.3 risk/reward ratio, even better than in the 1999-2011 backtest. The percent of profitable trades also increased now a little above 42%.

Interestingly, the drawdown value is displayed as 7.76%. Nevertheless, a max relative drawdown is not much pointed to in case of constant lot size through out the backtest. This can be easily calculated if we take the maximal drawdown in account currency resulted in the test, that equals 1283 here, and report it to the initial balance, this results in 12.83% relative drawdown, quite acceptable but remember that a starting balance of 10k lotsize used was 0.1, halving the starting balance to 5k will double the income potential but will double the drawdown potential too.

Forex Growth Bot Monte Carlo projection

A 2007-2010 backtest through the MT Intelligence offline analyzer tool gets the average monthly return for a 0.1 lot size which was $423. Here is the exported Monte Carlo projection while at it:

Power Source Edition

This is an extras package of Forex Growth Bot that has a bunch of extra parameters, some of which are mention here:

• FIFO - This will let the EA run with a broker if it's a US broker implementing this particular rule in the client.
• ClosePreviousSessionOrders - Will surely close the orders from a previous session that will otherwise remain open.
• Wave Trailing - A complex trailing stop system, available only in the Power Edition (not in Advanced and Basic versions).
• Re-Invest capital - It was mentioned above, for each $4500 profit it adds 0.1 lots (only available in the Power Edition too).
• Assign SL & TP - Enabling this parameter will send a SL & TP with each order and disable Wave Trailing and Re-Invest capital.
• BotComment - Allows modifying the comment sent with each order.

The most interesting parameter in this edition is Wave Trailing, so, here is a backtest with it enabled to compare it with the 2007-2010 backtest of the default version, The money management parameter isn't enabled and every other parameter was set to its default value and here's what resulted:

The first impressive is that it's quite a lot more profitable than the basic edition. The balance graph is a staircase like, what means that some trades are highly profitable, what made the EA permit them to run longe and gain more profits while Wave Trailing is enabled. Yet, the recorded relative drawdown was 20%, importantly haight than that in the basic edition test. In conclusion, Wave Trailing will be interesting option if you can afford higher drawdown risk.

Strategy

The EA trading strategy is not definitely clear, so this will be guesswork; the market entry depends on a volatility indicator working on two different periods - if the volatility get changing, the EA considers that a trend has started and a position will be opened. Then position management is controlling: if the market goes against it, the position will be closed at once (at an average loss of 30 pips) and the EA will wait for another chance to capture. If the market moves in the desired direction, it adds up to 5 times the existing position's original size. Sure, the market may retrace later and the positions will not always go straight, but when they flow, they result in good profit.

During such a positions basket course, some of them will be occasionally closed and others will be opened and this mechanism is still unknown - Forex Growth Bot is a bit of a mysterious EA, but it works great both in backtesting and in forward testing and that's enough to trust an EA.

The overall win ratio is just about 40%, but the fact that the average profit trade is more than twice the average loss trade can exceed that win ratio compensation. It's the ideal trend-following forex robot and there is no similar EA existing in the market until now.

The EA authors state that 3 to 10 trades are open per week, but a deeper analysis seems to suggest an average of more than 1.5 trades per day, periods of several no-trade days will pass as well as periods of 5-6 trades per day will also exist. Even though the author says "This is not frequent trading, I beg to differ" but when compared to other EAs, this is a gush of trades. Concerning the duration, over 80% of the trades will be closed within a day (the average being around 12 hours), but some trades may last for 2-3 days. As with most trend EAs, there are no trading session restrictions on positions opening which is around the clock as long as its signal conditions are met.

A good advantage for Forex Growth Bot to escape from your broker if it's out to get you is that the EA opens and closes its positions only at the start of each bar, so no stoploss & takeprofit target is sent with each order. But it may be risky if your internet connection goes down or if your VPS crashes.

As far as I can tell, Forex Growth Bot complies with the no-hedging rules, and now it features a parameter that lets you enable FIFO compliance as some of its positions get closed before those opened before them and still open at the time.

Parameters

Regarding configuration, it can be considered nonopalescent. It misses many settings that other EAs are full of. The only money management parameter in the basic version lets you set the lot size manually. There are more 3 parameters to control the volatility settings but they should only be edited if you want to set the EA for another pair and timeframe.

The EA author recommends running it only on the EURUSD pair and M15 timeframe, but it can be run on other pairs too so feel free to try. Experimentally, running it on EURUSD M5 FXT could be profitable with the default settings even on that timeframe. If you'd optimize it on other pairs, you can use the "open prices only" method, it will be a good idea relaying that the EA only trades and closes on bar start.

A Forex Growth Bot advanced separate version can give you access to more configurations such as the interesting Wave Trailing (a sort of trailing stop) and more volatility settings that are briefly described in the EA manual without recommending a range for them or even mentioning the influences of modifying them. Moreover, there is a reinvest capital option in the advanced version that seems to be an advanced money management where for each $4500 profit, the lot size will be increased by 0.1.

This recalls position sizing. As stated in the manual, you can manually input the lots number and for balances lower, you should use 0.01 lots while for balances above $2000, you should use 0.1 lots. However, it is recommended not to use more than 0.1 for each $5000 in your account (which means 0.02 lots per $1k), even going as low as 0.01 lots per $1000 balance, depending on your drawdown acceptance, this will be focused on in the backtesting section. Anyhow, the money management that adds 0.1 for each $4500 profit seems far more logical.