Forex Growth Bot Review
Forex Growth Bot is not an unheard name because I have received requests numerous times to review this EA. I have also heard about this EA from their users. Still I was not so curious about this and that’s why I felt a little guilty because this review should be done 10 days ago. But once I open their homepage, it makes me interested because of its stats.
On first look, it gives a common idea to the traders that, it is like other forex robots that ‘let the profits grow by cutting the losses’. And it is actually true, because it trade only EUR/USD M15, which is profitable in most of the cases but not enough to make you rich quickly. Therefore my review about this EA will be almost similar like others.
Work strategy
It is very difficult to understand Forex Growth Bot’s strategy because there is no description about it. But we can guess how it works as it has a volatility indicator. This indicator runs in two different phases. When the market is volatile and there is a positive situation for trading, then it will consider a particular trend and start trading. As long as the market moves in this direction, it will add positions. But if the market moves to opposite direction, then after a certain period of losses, which is usually 30 pips it will stop. Unless there is any favourable movement of the market it will remain silent. Therefore this system makes profits as long as the market runs in its course.
But during this course of trading, this system closes some trades and opens other. In most of the time it works but, I don’t know how they do it. To me, Forex Growth Bot is more like a black box, which works most of the time and effective in both back test and forward test. But I can’t explain how.
According to their statistics, the win ratio is 40%. But actually it is not accurate because the win trades are almost twice than the loss trades. It is just like a successful trend following EA and over the last 2 years, we have not seen many robots like this. Average trades per day are usually higher in this robot, which is at least 1.5. Their opinion says that 3 to 10 trades are open per day, but sometimes you will find 5 to 6 trades are open per day. In some days you will not get any trades at all. But compared to other forex robots, it has more trades per day. And the good news is that- trades are not restricted to any seasons. When there is favourable condition, position will open to trade.
Bot opens and closes at the start of each bar, but there is no stop loss or profit gain target. Therefore you may be in problem if broker is out to get you or your internet connection goes down. Forex growth bot does not act against any hedging rules. And it does not follow FIFO rules and for that reason you may find some positions closing before others which were opened first and still remains open.
Edit 20.02.2010: This EA now let the users to enable FIFO compliance. This is the newer features of this forex growth bot.
Website
Product homepage of forex growth bot is www.forexgrowthbot.com. And the positive side is that it is simple and does not throw marketing dust into your eyes. You can start a live forward test and several back tests. You will also have a large balance which will decrease with time; therefore balance curve may look peculiar. But overall, their website tells the truth about most of their features.
Parameters
If we compare with others, then we can definitely find forex growth bot lack with several parameters. All you can find is a manual lot size setting option in the basic version of this product. To trade in the volatile condition, there are three parameters for volatility control. But it is not wise to change them unless you are dealing with different currency pairs and time frame. Recommended currency pair is EURUSD M15. But you can also run it on other pairs as well. So just feel free to experiment with Forex growth bot. In fact, sometimes you may find yourself lucky if you trade on other currencies.
For example, one day I ran a EURUSD M5 FXT on by accident with default setting and time frame. And hell, I was lucky because it was profitable. So my suggestion is that if you try to optimize it on other pairs, ‘pen prices only’ method is the best for you. It is usually profitable, because EA trades and closes on bar start.
You can also purchase their advanced version, which will give you access to more settings. You can use interesting Wave Trailing option which is a kind of a trailing stop. There are also more volatility settings for you to trade safely. But they have not mentioned how and when it will assist you and what is the range to use it. You can also have a reinvest capital option, which allow your lot to increase at a rate of 0.1 for each $4500 profit. It is more like an advanced money management option which is only available if you purchase the advanced version separately.
Now let’s talk about position sizing. You can manually input the number of lots here. And they have suggested using 0.01 lots when the balances are lower than $250. And if the balance is above $2000, you should use 0.01. This is according to their manual. But if you want to know my opinion, then I would suggest you to use at best 0.1 lots for each $5000. That means 0.02 per $1k. You can also start with as low as 0.01 lots for each $1k. Although according to their back tests, you can go more safely. And there is also an advanced option for money management which increase 0.1 for each $4500 profit. So overall, it seems quite impressive.
Given the chart decorations that I’ve seen in some EAs recently, I would’ve also expected to see lots of comments on my screen from Forex Growth Bot, but surprisingly it’s totally silent. There was nothing in their wall and also in the expert log. I am really surprised with that.
Backtesting
I ran a usual backtest on FxPro terminal. As it is about EURUSD, therefore I set the spread to 2.0. Well, for most of the people it is bit on the high side at present. I keep the default settings for all the parameters. I did not change the default lot size too. It is 0.1, rather rational but when the starting balance is $10000, nothing is more suitable than this.
Forex Growth Bot 1999-2011
The result is awesome. I had no idea, that a trend EA can put such a spectacular performance. And its visual mode is also amazing. It is my suggestion that you should perform a visual backtest after purchasing. It is really entertaining that how this EA captures trend as the time progresses.
Forex Growth Bot has a nice, well balanced curved despite the hard time in 2002. On an average it wins 55 pips but at the same time loses 27. Therefore the risk reward ratio of this Forex robot is 1:2. I believe that is the best ration from a trend EA. You can have less than half of the total amount added into your account from the profitable trades. This is precisely 38%. Although maximum drawdown might look ugly which is 24%, but it is only in the year 2002. There is no record of such low levels after that, but as there is in 2002, so it may happen anytime in the future. For that reason there is no guarantee that the present nice behaviour of the Forex Growth Bot will persist all the time.
Rarely, it is found that the lot size is sometimes doubled. The author explains this as the result of the high profit probability trade setups. But there is nothing to be worried of because it does not use more than double the lot size. So the risk is not higher.
The most important thing to be considered is the balance curve, in the end. Although the curve looks nice but we can find that there are periods of flatness or slight draw down. But there are also periods of large profit gains. At least it is found from the back test.
Actually there is no point to back test it on tick data, because EA is dealing with hundreds of pips all the time. But to make the review in line with other reviews of mine, I did it using the real spread data. Results are pretty much comfortable and here they are:
Forex Growth Bot 2007-2011 tick data real spread
Now I can assure you that spread does not really matter for this EA. But if you have a broker who has the EURUSD spread higher than 2, there is no reason to continue with him. You should find another one in that situation.
I have also run the back test and there is nothing much there. The result is almost similar with previous. Average profit is 70pips and average loss is 30, so the risk reward ratio is 1:2.3 at this moment. It shows a little improvement than the 1999-2011 back tests. It is because the percentage of the profitable trades is now more than 42%.
Now let’s see the drawdown, because I think it is notable. And in the backtest we found that it is only 7.76%. This is not so significant because we know that when the lot size is constant during back test, max relative drawdown has not much point to be considered. So the better thing is to calculate it ourselves. And according to my opinion the only easiest way to do this is to take the maximal drawdown in account currency resulted in the test which is 1283 in this case. And when we report it to the starting balance, we can have a result of 12.83% relative drawdown. In any situation this is acceptable but don’t forget that this result is when we use 0.1 lot size for a starting balance of 10k. Certainly the income potential and the drawdown potential will also increase if we increase the initial balance.
To test it further, I also use the 2007-2010 backtest through the MT Intelligence offline analyzer tool, and look what I got. The average monthly return for a 0.1 lot size was $423. At the same time I also exported the Monte Carlo Projection:
Forex Growth Bot Monte Carlo projection
Power Source Edition
(This part of the review was added on 21.01.2010, around two days after the review)
I have received this power source edition from the author of this EA yesterday. And after checking it, I have found some extra parameters in this version which should be mentioned here.
- FIFO – This feature will make the EA work nicely with your broker. And if can also implements particular rule in the client, when you are using an US broker.
- Close Previous Session Orders – It is very much important. I have personally encountered this problem. But this new feature automatically closes your orders from a previous session which remains open otherwise. I have my experience discussed in the forward test section further below.
- Wave Trailing – It is a complex system of stop trailing. This feature is present only in power edition not in advanced or basic edition.
- Re-Invest capital – We have explained it above. For each $4500 profit it naturally adds 0.1 lots. It is only available in power edition.
- Assign SL & TP – You can enable this parameter to send SL & TP with each order, but it will disable two other parameters; wave trailing and re-invest capital.
- BotComment – You can change comments which are sent with each order because of this parameter.
I found the Wave Trailing is most interesting parameter and therefore decided to enable it. I run a backtest with it. I used the FXT file from the previous 2007-2011 tick data. I also keep the system in default setting and did not enable money management parameter just to have a comparison term in the 2007-2011 backtest. That means except Wave Trailing, all other parameters were set to default values. And here is that result:
Forex Growth Bot 2007-2011 tick data real spread, Wave Trailing enabled
First impression it put in my mind is that it is lot more profitable than the basic edition. You can see that the balance graph is look like a staircase. So there are some trades which brought a lot of profit from time to time. Therefore when the wave trailing is enabled, they are likely to allow running for longer duration and capturing more profits. But the only negative side is that, the drawdown record was 20%. It is really higher than the basic edition. So you can use this wave trailing option to gain higher profits but at the same time the risk of drawdown is also higher.
I have also forward test running in the basic version, it is mostly because this version started with it. And also partly because of the readers who are interested to see the evolution of the basic edition of this EA.
Conclusion
There is definitely lack of user friendly features in the Forex Growth Bot, but at the end it is a solid trend EA. If you have enough patience to hold your breath when there is flatness in the balance curve for months and have faith that in the long run you will get profit even though there are chances that most trades will be closed as negative, then it should be in your portfolio. In my opinion it’s an EA for the connoisseur not for everyone, even though the price is really low which $84.99 is. But recent edition has a higher price but compared to others it is still low according to me.
The basic edition is the built to last version of Forex Growth Bot, according to its author. But you can purchase additional packages. There is also an advanced edition of this forex growth bot which costs only $59. Here you can find some additional features and configuration settings. There is also a power source edition which costs only $70, but you can have access a part of its source code. You can trade with high profit ration with it. There are also advanced support and optimization which is available at $49 per month. It will give you access to their remote assistant and online support centre via Skype. It is not mandatory that you buy these additional features because they may change time to time. But the basic version is the long lasting edition which you must have for proper bot function. And according to the back test result, forward test and other buyer’s opinion, it is really effective.
You will get an unlimited license once you bought it. You can run as many accounts as you need with this forex bot but, you can’t use them in different machine. So the bottom line is that, you can register with a single computer. If you want another one, you also need another machine. You may have to run it in demo mode for several days after purchase it, until you have the key. It is crucial that from where you should request the key. It is because you can only run it in that machine from where they received the request. So if you want to run this on a VPS, then you should request the key form there. Otherwise it may be restricted to one machine exclusively.
Forward test
On 12.01.2010, I started my live test account using a previous account at LiteForex. I actually did not expect much from it, because it had a few small losses at first. After the surprising news is that almost immediately after that, it caught some large profits and the floating profit is as much as 1.6k from the starting balance of 5k. That is really amazing and if it were not a live test account, I probably would have closed it manually. I think the reason of such huge profit is the lot size of 0.1 which I have chosen without analyzing the back test. I kept that setting for the consistency’s sake, but if I start again, I would start with o.05 lots for the 5k starting balance. And I will let all parameters to their default setting, which I did in the live forward test.
Edit right after posting: I have been informed by the author about the fact that, when EA is restarted it loses control from the trades. And that is the probable cause of the trades that I have mentioned above. It is the 1.6k floating mostly because of the crash issues. I have recently faced this problem and you can find it on the forward page. So now I am closing them manually. So my suggestion is that, once you buy it you should not run in into such problems by running in on a VPS right from the beginning. I have used SWVPS myself and you can also use Forex VPS as a provider.
Edit 26.01.2011: So here is the exciting news, the problem I have mentioned earlier is no longer present in the newer version of the EA. And the author has also assured me that a new signal service based on the EA is in development. It will be an alternative once it becomes available.
Edit 04.03.2011: I have found that my live forward test account is trading opposite to other accounts for about a week now. I informed the author about it yesterday and according to his suggestion I restart the terminal manually. The result is- short trades close with a large drawdown on the account. I have sent the logs to the author and he will inform me after further investigation. Let’s see what comes out next. I will post an update if there is any news about this problem.
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