So... I don’t have a high opinion of those who seek to blame brokers for poor performance, especially in the automated community. Whilst perusing the web I came across this little gem from one particular EA vendors website here http://www.robinvol.com/open-a-trading-account/
I couldn’t help myself with the post below. My apologies in advance to Fernando the creator of RobinVol, it’s nothing personal, you simply don’t know what you don’t know....
"The trading environment is an essential part of trading. In fact, it is the most important part we must work on to succeed in the long term once we have a winning strategy. As you might know, the main official Robin VOL account already lost more than 400 pips due to execution delays and slippage, especially since January. That made me start the search of the most reliable broker."
what is alarming about this is the fact that RobinVol's developer "Fernando" actually thinks a broker is the reason for the poor performance of his strategy.
Lets break this down...
"it is the most important part we must work on to succeed in the long term once we have a winning strategy"
it’s a bold statement considering it doesn't work with LMAX or Pepperstone don't you think? Two of the more prominent DMA brokers out there..
What makes a winning strategy?
The most important thing to remember in FX is.... if it was that easy everyone would be doing it. Why do you think stop entry orders don’t work during news announcements? Do you think a hedge funds or professional trader would use such order types and try and trade the news?
no.. of course not.
Fernando's idea of a winning strategy involves trading on the first tick of a new 15M candle. If thousands of traders using the exact same EA all try and enter the market at the exact same time what is the likely outcome? micro, mini, standard lots or even millions, the size of the order is in this case irrelevant, for retail punters it would not be a large enough amount to put a dent in a tier 1's order book..
you see a strategy with an edge is not execution sensitive to the degree that a few pips slippage can reduce the expectancy to the point where the strategy becomes unprofitable. if the strategy is so execution sensitive then marketing it to the masses is irresponsible and it says much for the motives of the EA developer. Such strategies aren't designed for the masses, they're designed for an API or a platform where specific order parameters can be input to make for more precise order execution.
If you trade in an over the counter market that is decentralised and you are making a market in a particular product and you get bombarded with thousands of orders from hundreds of clients (brokers) would you stand in front of the flow or would you say f@#k this, these clowns can pay a little extra, they obviously no something we don’t (extremely simplified breakdown of what is happening with the banks algo).
Scenario:
Trade 1 goes to market at 4:15:00:100 (100ms after the open of the new M15 bar) with 300 other orders from broker/clients globally. Banks at the top of book reject the trades for the above reason, clients orders work the order book and get fills 0.1-2+ pips away.
Trade 2: order is sent to market at 4:15:20 hits the top of book price and gets immediate fill with no slippage.
Is it impossible to send orders to market at different times if an entry has been triggered?
yes of course. Do hedge funds buy 500M at market when they get a signal for an entry or do they use an algo to enter the market over x time with x% price tolerance?
To be an "EA developer" and flog a strategy to the masses without the smarts to enter the market without a blindfold on is negligence. Kangaroo EA sets random take profit levels so all orders (000's of millions) do not execute at the same time and cause slippage for clients. Their strategy works at almost all brokers. It is a winning strategy and one with an edge.
the story gets better... they have actually publicly called pepperstone a bad broker because this "winning strategy" does not work well with them.
see here http://www.robinvol.com/real-money-accounts/
why do people actually like this EA? its performance is lacklustre and the guy running the show clearly has no idea of what he's doing.
The "winning strategy" does not work with
1 LMAX
2. Pepperstone
3. Any other broker that isn't b booking the flow.
Fernando, you've suceeded in pulling the wool over everyone's eyes with this one. What your website should read is:
"We've created a curve fitted strategy and back tested it to the n'th degree to produce the 13 year back test results that you currently see on this site. The strategy works well with b book brokers who are prepared to roll the dice with our performance, here is one we recommend."
I have picked on Fernando and RobinVol with this post. Nothing personal, he simply shares the flawed logic of many EA developers who understand squat diddly about brokers and execution.
End rant.
I couldn’t help myself with the post below. My apologies in advance to Fernando the creator of RobinVol, it’s nothing personal, you simply don’t know what you don’t know....
"The trading environment is an essential part of trading. In fact, it is the most important part we must work on to succeed in the long term once we have a winning strategy. As you might know, the main official Robin VOL account already lost more than 400 pips due to execution delays and slippage, especially since January. That made me start the search of the most reliable broker."
what is alarming about this is the fact that RobinVol's developer "Fernando" actually thinks a broker is the reason for the poor performance of his strategy.
Lets break this down...
"it is the most important part we must work on to succeed in the long term once we have a winning strategy"
it’s a bold statement considering it doesn't work with LMAX or Pepperstone don't you think? Two of the more prominent DMA brokers out there..
What makes a winning strategy?
The most important thing to remember in FX is.... if it was that easy everyone would be doing it. Why do you think stop entry orders don’t work during news announcements? Do you think a hedge funds or professional trader would use such order types and try and trade the news?
no.. of course not.
Fernando's idea of a winning strategy involves trading on the first tick of a new 15M candle. If thousands of traders using the exact same EA all try and enter the market at the exact same time what is the likely outcome? micro, mini, standard lots or even millions, the size of the order is in this case irrelevant, for retail punters it would not be a large enough amount to put a dent in a tier 1's order book..
you see a strategy with an edge is not execution sensitive to the degree that a few pips slippage can reduce the expectancy to the point where the strategy becomes unprofitable. if the strategy is so execution sensitive then marketing it to the masses is irresponsible and it says much for the motives of the EA developer. Such strategies aren't designed for the masses, they're designed for an API or a platform where specific order parameters can be input to make for more precise order execution.
If you trade in an over the counter market that is decentralised and you are making a market in a particular product and you get bombarded with thousands of orders from hundreds of clients (brokers) would you stand in front of the flow or would you say f@#k this, these clowns can pay a little extra, they obviously no something we don’t (extremely simplified breakdown of what is happening with the banks algo).
Scenario:
Trade 1 goes to market at 4:15:00:100 (100ms after the open of the new M15 bar) with 300 other orders from broker/clients globally. Banks at the top of book reject the trades for the above reason, clients orders work the order book and get fills 0.1-2+ pips away.
Trade 2: order is sent to market at 4:15:20 hits the top of book price and gets immediate fill with no slippage.
Is it impossible to send orders to market at different times if an entry has been triggered?
yes of course. Do hedge funds buy 500M at market when they get a signal for an entry or do they use an algo to enter the market over x time with x% price tolerance?
To be an "EA developer" and flog a strategy to the masses without the smarts to enter the market without a blindfold on is negligence. Kangaroo EA sets random take profit levels so all orders (000's of millions) do not execute at the same time and cause slippage for clients. Their strategy works at almost all brokers. It is a winning strategy and one with an edge.
the story gets better... they have actually publicly called pepperstone a bad broker because this "winning strategy" does not work well with them.
see here http://www.robinvol.com/real-money-accounts/
why do people actually like this EA? its performance is lacklustre and the guy running the show clearly has no idea of what he's doing.
The "winning strategy" does not work with
1 LMAX
2. Pepperstone
3. Any other broker that isn't b booking the flow.
Fernando, you've suceeded in pulling the wool over everyone's eyes with this one. What your website should read is:
"We've created a curve fitted strategy and back tested it to the n'th degree to produce the 13 year back test results that you currently see on this site. The strategy works well with b book brokers who are prepared to roll the dice with our performance, here is one we recommend."
I have picked on Fernando and RobinVol with this post. Nothing personal, he simply shares the flawed logic of many EA developers who understand squat diddly about brokers and execution.
End rant.
