Thought I would take a break from backtesting and write a piece on this. This morning I have been getting a lot of email alert about Forex Derivative EA. How it is a scam and what not?

Firstly, thank you very much to everyone who wrote in to me alerting me on this. While I don’t think I am in the business of uncovering scam (it happened by accident) I do feel that it is something that comes with this business of Forex EA or any other online or internet business for that matter.

Now I am not able to verify that it is a scam… but as the forum suggests

http://www.tradingsystemforex.com/commercial-expert-advisors/1530-forex-derivative-2.html

This derivative EA uses  a code to manipulate backtesting results to curve fit it perfectly. While forward testing might not yield the same results… It never would anyway… but the point is…  It is deceiving and thus makes it unethical.

One of the reason I suspect, the author uses this code is to run away from the 56 days guarantee. Once the 56 days guarantee is over, the author keeps the money. And you get jack shit… You see, some will back test it… and if the backtesting result is good, they will forward test it… and forward test it take time. If one is not vigilant enough… boom… you will miss the guarantee dateline.

Ok.. that is only my suspicion. Another reason is they guy is jumping on the bandwagon…. Forex EA or automatic trading is a hot thing/industry and it is growing. You can guage it by the number of people jumping or participating in forums about Forex EA.

Anyway… as a fellow blogger puts it… http://ckowyong.com/blog/?p=193

The DEMAND and SUPPLY Mismatch

looking at the situation from a higher level, it’s obvious that there is a rapidly growing population of investors/traders looking for truly genuine and profitable expert advisors. at the same time, there is a constant chain of expert advisors being released into the market place, all claiming that they are highly profitable. however, there’s a very disturbing fact in this DEMAND and SUPPLY picture.

ideally, the supply should meet the demand and an equilibrium should be formed. buyers and sellers should both be happy, but that’s not the case. what’s being created by the this unique case of demand and supply is a VACUUM… one that’s building up gradually… the pressure getting more and more unbearable each day. it’s getting uncomfortable… and many people are getting frustrated. i’m getting frustrated and tired too. aren’t you?

A New Direction

it was in Jan 2009 when it struck me. why search and evaluate commercially available EAs? there are already countless EA review sites these days. i then made a decision that i no longer wanted to be on the DEMAND side of the equation since i can’t control the quality of the SUPPLY. so the journey began… (more about my journey on the next post)

This is just what I understand and believe to be true. There are so many EA out there that people are getting frustrated because not all of them are good, they are are plainly just $hit (but each to it’s own) So what else… every one jumps on the supply side of things because demand are getting really restless… or frustrated.

And mind you this demand is continuing to grow. And this supply will also grow in tandem. So it will not stop these fu(kers from producing, cloning, reverse engineering EA to meet the consumers needs… (Sorry CK… I don’t mean you are one of them just because you are going into the supply side of things)

Yes… there are a few genuine proprietary EA sellers, but because the whole industry now is becoming a circus act, these (probably) innocent EA sellers are guilty until proven innocent…

Why do you think Forex EA are being SHARED? Partly because everyone loves freebies and partly because currently there are so many BS around one needs to be sure of it first and foremost… Some of the forums members are now saying if it’s good, then buy the original….Following the concept of guilty until proven innocent.

On the other hand, there are a handful of good Samaritans that produce their own EA and share it around for FREE… and requesting donation if you like it.

The decompiler software is a bane to EA sellers but on the other hand it is a saint to all the EA buyers. The decompiler software helps scammers to look into the codes, reverse it, clone it and whatever one can think of to make a quick buck while it also does help the consumer to understand and verify that an EA is genuine. For all it’s intend and purposes, the decompiler has both created good and bad to this industry.

I for one will admit that having a decompiler software can really get to ones head. If I can cracked a few EA to bypass some security software, what is stopping others from doing so? At times I can be a hypocrite, while cracking and sharing, I on the other hand try to be straight about all these and blasting about all the BS that is going on in this industry.

Finding the right logic to all this is not just not that simple. It is no longer about black and white, right and wrong, true or false.

Everyone comes into this industry to make money in forex. The subset of making money out of forex industry would be probably making money as a system sellers, a site that reviews system, a forum site for members to discuss etc etc. All of these subsets has a different revenue stream apart from making money from the forex trading directly.

So how does one overcome all these scams, shams and bullshit? You can’t actually… as long as you have sheeps who are yearning to get rich quick in forex, there will always be wolfs in the bushes waiting to pounce on you and milk your money dry.

There only thing one can rely on are sheep herders who try to protect the sheep and ward of the wolf.

For me it’s about profit or loss. I should not be bothered about what is black or white, what is right or wrong, true or false. If forex trading is my priority… whether automatic or manual… Profit or loss is what bothers me. If an EA is profitable… then I use it. If it’s not… then I chuck it. Whether I got it for free or I bought it is secondary to me.

If it’s proven to be ‘innocent’ then I will support it. If it’s innocent at first and then turns out to be false… then I will fu(k it. If it’s false then I of course will fu(k it till kingdom comes.

I think that will be my stances or rather my principle of how I go about in this industry of Forex EA… Until things or situation changes that is.