Time To Evolve From FxReviews to MechanicalForex a Milestone Achievement o

Today its a very important day, not because of the release of another automated trading strategy or some other achievement related to Asirikuy or the development of expert advisors but because today I will be taking a huge step for this blog and - hopefully- my online presence in general. Through the past 3 years fxreviews.blogspot.com has been the home of my forex blogging efforts and after more than 500 articles and a lot of modifications it has now become evident for me that this blog and its potential have exceeded the limitations of what the blogger platform has to offer. Today I am taking a step forward and sharing with you this blogs new url : http://www.mechanicalforex.com. Within the following paragraphs I will also share with you the reasons why I decided to take this important decision and why I consider this a very important move for the development of this website.

Although blogger has been a very friendly, rewarding and robust blogging solution its limitations became evident as my blogging frequency increased and the number of my posts became larger. Blogger offers some great advantages, such as being free, being able to do everything easily and having the safety and reliability of Google servers to host all the data, however it fails in two main aspects that make it unsustainable in the long term for me. The first problem is the inability to customize things - which means that the platform is rather inflexible - and the second is the lack of professionalism that comes from a sub-domain of a free blogging platform.

One of the biggest problems I have faced with blogger is the inability to customize the tags and categories of my posts in a way that makes my blog easy to use. The website now has a lot of content and the limitations of the blogger interface make it very hard to reach. So what is so much content useful for if it cannot be accessed easily ? The answer is that it is simply not useful. Since a website needs to be easy to browse and things should be very easy to find, I considered this a major problem for my future developments.

Another important reason why a change was now necessary is the fact that the website is no longer mainly about the review of automated trading forex products, something which makes its name rather inaccurate. Although this was the main topic of the website for a while it is now evident - especially since I started posting daily - that we are now moving towards a much wider area where the review of commercial systems is only secondary to a much bigger goal, which is the continuous achievement of long term profitability. The website is now much more about sharing new ideas and giving advice about how to succeed with mechanical trading than about going through the endless tides of products that reach us every month from the hands of commercial EA sellers.

To solve all these problems and move forward, making my blog much more customizable, easy to navigate, accessible and professional, I decided to create a new domain - that better reflected what the website is about now - and create a whole new website powered by Wordpress. This new website is called Mechanical Forex, a website dedicated to the use, development, review and evaluation of mechanical trading strategies. A website in which the name is much more reflective of what is going on inside of it.

Thanks to some very friendly Wordpress plugins moving all my posts from blogger was a breeze (surprisingly with no broken links :o)) . However there are still some things that need fixing (for example all the links that pointed to articles within articles still point to blogger) but I am confident in that all of these problems will be solved within a few weeks (after I become more knowledgeable in wordpress). However the new Wordpress implementation carees a ton of flexibility that will also allow me to greatly improve the usability of the site, generating tags, category listings and linking systems that will be much better (a world better!) than what we currently have here in blogger.

Starting tomorrow this website will redirect to the new one and new posts will only be placed on the new site. If you are a frequent reader and you follow this blog through the RSS feed please make sure you subscribe to the new blog through any of the buttons shown on the top right. There are also some links on the top right so that you can share the websites articles on digg, stumbleupon, facebook and other social sites. If you like this website make sure you share it with other people you know who might find it useful :o)

Hopefully this new website will be a major improvement, it is definitely a milestone achievement and for me it feels like a move from a "hobby" to a much more "professional" blogger. Thank you very much again for all the support, interest and trust you have given me through all these years :o) Please leave any opinions, comments or questions you might have about the new site ! (you can leave them here or in the new website)

If you would like to learn more about automated trading and how you too can build your own mechanical systems based on sound trading strategies please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach automated trading in general . I hope you enjoyed this article ! :o)

Forex Expert Advisors Forex Trend Scalper an Unbiased Review

A few days ago, a customer suggested I reviewed the forex trend scalper expert advisor. Since I had never come across this trading system I decided to dedicate todays post to its analysis. As always, I will analyze the claims made on the web page against the evidence provided by the authors and this way I will be able to say if, in my opinion, this expert advisor system is worth buying and testing or if it is not. The forex trend scalper system only claims to make money everyday in a consistent fashion, lets see if this is proved by the evidence.

When you arrive at the forex trend scalpers website you are greeted with what I would call an average EA website. However, the author of the trading system did a good job at limiting the amount of outrageous claims and instead provided a short list of rather simple ones. The only one which says anything about trading states that this system can "make money" everyday for the trade. No claims at all are done about the amounts of profits that can be generated, the risk:reward ratio, the maximum draw down, etc. This will lead people to over estimate the profitability and underestimate the risks of trading this system as risk is not brought up anywhere within the sales page.

Even though there are no claims of "profit targets" we do see across the web site several places where people say that forex trend scalper is generating them 5 and 6 figure incomes. If this was the case, as the author says its the case for himself, then why wouldnt he show us his live statements showing he has made a living from the forex trend scalper ? Well, probably, as in most cases, this claims are just made up and hold no place in the real world.

As for the actual long term profitability of this trading system, all the evidence that is provided is a few months of live testing. There are no backtesting statements and therefore no way to compare with live testing and gauge longer term profitability. From the live statements I can tell that the EA is our regular EUR/GBP scalper. This type of experts seem to have thrived after the sales success of the FAP turbo expert advisor.

Since we lack any way to verify the long term profitability of the expert, a three month live test is too short and the scalping of the EUR/GBP is very dependent on broker spreads and broker feeds I consider this expert advisor NOT worth buying. If you would like to know what I think about commercial experts, why most of them fail and how you too can trade free long term profitable trading systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Watukushay No 2 Trading with Candlestick Patterns

Many of you may be familiar with the Watukushay Project and how its goal is the development of long term profitable systems in which the whole development is carried out in a step by step fashion in order to help new and experienced traders better understand the process of automated trading system design and creation. The first expert from this project, the Watukushay No.1 EA was launched a few months ago. Its whole development was included as a pretty long section within the ebook that details the way in which the EA was programmed, the thought than went into its design and the way in which this expert advisor is meant to be traded, optimized, etc.

As soon as I ended up the development of this expert advisor I started to work on the next Watukushay EA, Watukushay No.2, which will be my second work for the project. Since the first expert was based on simple indicator trading with dynamically adjusted money management, I decided to base my second expert in a totally different approach. The second Watukushay expert will be based entirely on price action and will work on some very simple and successful candlestick patterns coupled with some simple trend following techniques.

The development of a system that will not be based on indicators will help traders see how to implement such a strategy and it will also serve as a way to illustrate how successful strategies can be programmed exclusively from price action. The money management used on this expert will also be different with no inclusion of the popular ATR adjustement technique I have been using in such an extensive manner during the past year. This new money management technique will also illustrate how there are different ways besides volatility indicators to adjust position as well as SL, TP or TL and it will also show how this can all be done with simple price action, with absolutely no need of any indicators.

Probably I will be finishing programming, testing and optimization sometime within the next two weeks but the inclusion of the whole development process on the ebook as well as the testing of the system on the newsletter will only probably start until early December when I finish the whole writing, editing and publishing process. I will give special care to the programming now so that everyone can have a very good understanding of how this candlestick pattern based expert was programmed and how I came by the trading strategy and optimized it to achieve the profitable results you may be hopefully looking at.

Those of you who are experienced in trading may be happy to know that I will be implementing the candlestick pattern with the highest probability of success, this turn out to be very simple, very studied candlestick patterns such as the hanging man, the hammer and the three soldiers. Of course, such knowledge of the probability of the candlestick pattern success did not come up from research of my own but from a careful review of the currently available literature. After reading several books about candlestick patterns with strong statistical analysis of the success rate of each pattern I kept less than five that proved to be the most likely to be successful in todays forex trading.

What will the profit targets be ? Will it be more profitable than the gods gift ATR or the Watukushay No.1 ? Stay tuned for more info on this ! If you would like to learn more about the Watukushay project, how you too can design and program your own profitable automated trading system or how you too can trade the free gods gift ATR successfully please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

Forex Expert Advisors Forex Humanoid an unbiased review

In an effort to continue my reviews of expert advisor systems todays post will focus on the review of the Forex Humanoid expert advisor. Of course, I write all this reviews with the hope that traders new to automated forex trading will not get ripped off by unethical sellers that offer systems that just do not work and put the hard earned cash of those out there at significant risk. Remember that all my reviews are as unbiased as they possibly can with no cash (or services, or doughnuts, or anything else) given to me for neither good or bad opinions about any particular system.

Now lets start reviewing the forex humanoid expert advisor. I have to say that the forex humanoid expert advisor looks like the regular trading expert advisor out there, with little evidence to prove their claims and really outrageous results.

First of all, lets look at what they are saying on their webpage. They are saying that their system gets no loses, yes, no loses. And not even only that but they are saying that they have managed to turn 10K into 100K during the last year. Now, they also claim that their expert uses a better than 1:1 risk to reward ratio. I mean, if there is a system out there that can make a 1000% profit return with no loses and a 1:1 or better risk to reward ratio then it IS the holy grail by all standards.

But wait... What is wrong then about this expert ? Well, that they are pretty much not proving any of the claims they make. For example, if their expert is so profitable why isnt there any live testing information but just pictures (which I mean, can be perfectly easy made up) which cannot prove the profitability of this expert. If it is so good, why isnt there a live testing statement of at least a year showing us what it can do ? Why does he say that the expert has made all that money when it certainly has NOT ! If it has, then where is the proof ? I mean, I just hate when EA creators just say things for the sake of saying them.

If you are going to say something, prove it, or shut up. Backtesting results do not mean that the EA actually did that, maybe in some imaginary world where streets are made of gold and most EA sellers are honest but definitely not on this one. This system could have of course, been designed with the benefit of hindsight, hey, if you know the past you can make a system that makes 2 million from 10 dollars in one year and I mean, it is just outrageous to claim such profit and draw down targets with no live testing to prove that backtesting and live testing correlate. I mean, this system is a total waste of time and a total death trap for people out there. If the EA creator givves us a year long live or forward test proving that it trades exactly as in backtesting Ill be glad to change my review. Up unitl now, I consider this EA absolutely NOT worth buying or testing, totally worthless.

If you would like to learn more about how you evaluate and trade free experst and actually be profitable in forex automated trading please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed this article !

The Peril of Printing Money

Traditionally, printing money supposed to be the last resort to the monetary policy. However from the recent sovereign debt crisis in the Euro zone and the U.S., we can see these policy makers are embarking on large scaled quantitative easing process to avert the collapse in the financial system.

The US embarked on the QE1 and QE2 with each over US$1 trillion respectively in the last 2 years, similarly, the Bank of England had its first QE1 in Mar 2009 and the QE2 in Oct 2011 with £75b and £50b respectively. And recently, in saving the mess in the Euro zone, the ECB has engaged in the so called long-term refinancing operations (LTRO) which is equivalent to the back-door quantitative easing, with €409b and €529b for the last 2 months.

Essentially, what is QE and LTRO? QE refers to the central bank implements quantitative easing by purchasing financial assets from commercial banks and other private sector businesses with printing new money. While LTRO refers to the central bank lending money at a very low interest rate to euro zone financially troubled banks with printing money, which has led to the term “free money" and these banks are suppose to pay back at a much later date.

For the LTRO, the injection of cheap money means that banks can use it to buy higher-yielding assets and make profits, or to lend more money to businesses and consumers – which could help the real economy return to growth as well as potentially yielding returns.The best part, the banks can borrowed these money and pay back to the ECB after 3 years rather than the usual 3 months or 6 months.

So whats the consequence?

The biggest consequence is the income gap between the rich and the poor will widen significantly!

As we have too much money supply in the market it will result in "too much money chasing too few goods", which means the food prices will increase in tandem which drives up the cost of living. This is the demand-pulled inflation that is brewing in the economy.

On the other hand, during inflation, asset prices will rise accordingly while the paper money will lose purchasing power. Hence, the poor being not able to invest in stocks and houses, will be the greatest losers in the economy.

On top of that, commodity prices such as precious metals and energy will escalate too. The poor definitely do not benefit from this because not only do they own minimum precious metals, they need to face up to the consequence of the rising oil price that make their living even worse off. The rising energy prices will act as a double wammy to the economy because this cost-driven inflation will push the inflation rate higher. Hence, demand-pull inflation coupled with cost-push inflation, the economy will likely to run into "hyperinflation"!

Does the policy makers know the consequences? Why did they do this?

Well, with the QE, bank rates are artificially kept at an ultra low levels which makes borrowing easier for the business sectors. At least thats their intention - to promote more borrowing which in turns stimuate groth in the economy. But whether the low interest rate helps to revive the economy really depends on the business confidence because we can have the lowest rates in history but if the public shows lack of interest in borrowing the "free money", the economy cant move forward! Hence, QE did pump lots of money into the banks but this only improves banks liquidity, not the economy. Even though, the minority rich will get richer as asset prices like stocks, properties and commodities will soar, but the majority of the population is still poor and unemployed!

Now with the fear of inflation, how would the business confidence improve? Whether the central banks print money or not, it will take time for any economy to recover. If I were the Fed, Ill stop printing money, let the economy go through the cycle, let the commodity prices fall and hopefully tommorrow will be better!

Happy investing,

Pauline Yong

Stock Crash

In the recent stock crash, he DJI had an unprecedented wild ride initiated on August 4th a crash of 512 points (4%)due to a downgrade of its long term debt by Standard and Poors. On August 8th, DJI shed another 635 points (5.5%) but on August 9th, DJI had a big jump of 430 points (4%), however, on August 10th DJI swung negatively by 562 (5%)points due to rumours that a French Bank might be in financial distress. As predicted, the next day a big swing to the positive side by adding 424 (4%)points.



In 6 trading days, 5 days had more than 400 points (or 4%) move! That was unprecedented and it definitely affected the stock markets around the world. Our KLCI had a sharp fall but compared to the regional markets, as usual, we dropped the least. But still, the damage was done to our stock market technically, as our KLCI is now trading below 200 day moving average, it could signify the beginning of a long term bear. By long term bear I mean 9 months - 1.5 yrs based on the past trends.



Currently, I can see an intense fight between the bull and the bear. Last weeks event was a first sign of fear that the investors express it on the stock market after a 2 year bull run. Lets think objectively: (1) Have we seen any default yet by any of the U.S. or the European debt ridden countries? (2)The property market in Asia is looming but has it burst? (3) Interest rates around the world are considered low as we just recovered from a recession 2 years ago, so thats good for the stock markets, right? So what hasctriggered the crash on August 4th?



Some said it could be some political motive by the supporters of the Republican that they want to teach Obama a lesson by having a stock crash on his birthday. Its not uncommon to have this thought because the recent debt ceiling negotiations between the Democrats and the Republicans have exposed the weakness in the Obamas administration. Investors feel that Obama may not be able to handle well the current economic problems the Americans are facing, and that would hurt the U.S. economy which in turns affects the stock market negatively.



So the recent stock market crash has clearly send out a strong signal to the world that the investors do not have the confidence that the Obama administration can resolve its economic problems well, their historically high debt level may raise the risk of default by the U.S. government. Even without a default, the country is facing inflation problem and the depreciation of the US dollar may give havoc to the rest of the world.



For one, China would be in trouble since they are the largest holder of the American debt with more than US$1 trillion. And many central banks around the world will see their foreign reserves depreciate as the dollar depreciates.



In addition, the European countires like Greece, Spain, Portuggal and more seemed not committed in cutting their fiscal (government) spending, as they are afraid of losing the popular votes. So in the next 2 years, It wont be a surprise if I see defaults in governments in these countries.



So what to invest? Im still saying the same old words: For short term investors, go ahead and take advantage of the market volatility, as for the long term investors stay away and wait patiently!



Happy investing!



Pauline Yong

Better Expert Advisors Volatility Adjusted Take Profit and Stop Loss Values

During the last few years I have seen dozens of different automated and manual trading systems. When I analyzed what made some profitable and some unprofitable I realized that most of the differences happened depending on where each expert advisor would exit the market. When I saw this I realized that the take profit and stop loss values many expert advisors try to impose to achieve a fixed trading style are perhaps the most limiting factors within their programming.

When back testing and forward testing some expert advisors, I realized that many of them were profitable up until 2006 and then plummeted all their gains in 2007 and 2008, most of these where particularly EUR/USD trading systems. Then, out of curiosity I opened an EUR/USD monthly chart with the ATR indicator. To my surprise, there was a steady increase in volatility from the end of 2006 until the end of 2008.

Most of these expert advisors could be optimized to achieve better results in 2008 but then they failed to do well in 2006 too. So the answer was very simple, the parameters they used to exit the market were unflexible and were getting crushed by changing market conditions. The fix is pretty simple.

When these experts are changed to calculate their stop loss and take profit values based on the ATR (average true range) indicator, there is a drastical change in their profitability. The ATR indicator changes according to the pairs volatility so making an expert advisor adjust the magnitude of its trading orders based on a percentage of the ATR value can have good effects on its profitability. Suddenly, you start to realize that the system could have been profitable along all those changing market conditions if its exit orders had been adjusted to fit the pairs volatility !

If you would like to learn more about free ATR adjusted expert advisors and other free and commercial expert advisors I have reviewed please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !