Kaizen Kamikazi
Filed Under (EA System) by Casey on 10-07-2009
Tags: Cyborg EA, Kaizen Trader, Martingale System
Fuuyoh!! I ar come across-o… vely intelesting video-o. George-san ask o… me to check out o… this wonderfur video-o. I ar taken aback 0… Vely vely wonderfur-o… This EA rike magic-o… Can change o … rock o to gord o…
Check it out-o…. At the time of writting-o, this EA is-o…. not for sare-o…
Ok… enough messing about with Japaness srang-o… The author is not exactly from Japan, only the title Kaizen Trader is. The develop is actually from Singapore. My neighbour… since it is not launch yet… what better way to help and support fellow neighbor then a post on my site…
However… having said that. Here are my initial critical thoughts on it.
Firstly, I will start with the first video. I totally agree with the developers view on how he mentioned that market condition changes and most if not all EA might not be able to change and adapt to the market. This is in line with what I understand that automatic trading does not necessarily means no afford on our part. Automatic trading is just as it is… go in and out base on criteria set upon it.
Depending on the flexibility of the EA, one can tweak the EA to trade accordingly… Something like Forex Barometer and lately I discovered Forex Shocker… So we try to make the robot adapt to the market…
One thing I kind of think was a low blow was how this developer pool in other EA into the same pool indirectly saying that these EA or any other EA out there are not good. Granted… most of them are not great as stated on the respective sales site, but some of them are or could be… Granted also that this is the dog eat dog world… but putting your competitors down is not all that a great marketing.
To generalize it in such a way is just unprofessional. I believe they are trying to get their products out and this should not be the way to side step all other EA just to prove a point. But that is just me…
Anyway… to another question… the developer threw was if the market is every changing then is there a strategy or strategieS that can change to suit market condition?
Hell yeah…the develop goes on to say that they have 12 strategies embedded into the EA so you can pick and choose the strategies to suit the market condition.
Say… wait a minute… Shouldn’t the EA pick and choose the various strategies that suit the market?
Well whatever it was, that is the main idea. And that is also the idea that I recently subscribe to. I toy around with numerous EA… looking and tweaking the EA as it goes along trading the market… (still a balance between these strategies)… Too bad I can’t find a robot to do this… 
So yes… what this developer’s strategy is implying is also what I am currently trying to sort out.
But this developer asked the question “How do we know when the market condition happens?” And answered “After it has happened”
And he goes on to say yada yada yada… explaining that this new system will be able to identify these change in market condition before it happens… yada yada yada…and that is the solution…
At the end, he shows you a ‘cut off’ backtesting strategy results. It is very questionable if you ask me… Why? Because of all my back testing I have done, I have never gotten a full red bar on the top right… Maybe I have been doing my backtesting wrong… I don’t know…
Ok… that was the first video (except for the screenshot I took the screen shot in the second part to show the red bar backtesting results.. ) that was of course the teaser… Now comes the second video, and that is the meat of it all. Isn’t it always…
The second video talks about how this EA is not like any other EA… It has more losses but profits are high because the net profits out weight the net losses… Wow… great trend trading if you ask me… (Check out the net profit trades vs the net losses trades)
They apply a solution call Money Management and Position Sizing… Hey… isn’t that the mantra of all traders whether manual or automatic uses? (Why do you think I have to stop myself from having a quick w@nk with cyborg?)
Anyway… the most interesting part is their AEM Engine (Active Exposure Management). If I heard it correctly it is an engine which decides the characteristic of the time frame and various market conditions before it decides to enter… So in summary AEM = filtering…
One thing though, I will give stars for them in the innovation department. How they manage to change a ‘primitive’ breakout and MACD strategy to a wonderful looking equity curve is what I would call great innovation.
From this curve to this curve below…
And from this MACD curve to………..
This curve….
But the strategy of money management and position sizing that this EA is applying, it is either they are using a Martingale strategy or a progressive stacking lot sizing strategy which is very apparent… (see the red boxes)
From the equity curve and lot size graph… this is a very dangerous strategy indeed… Take it from me… $hit is bound to happened (Finally Got Canned by Cyborg) sooner or later…
Check out it’s drawdown… It’s almost over 53%…
Scary… I am already pissing in my pants with losing 10% of my balance and Imight not even sleep well… should I have increase my risk to say setting the Martingale level to the 8th degree…
Anyway… that is me…
Now I posted a comment on this video and the developer replied…
Sorry neighbor… but what you are saying is Kaizen is “exactly like any other conventional trading systems… ” So to say… it’s just like any other EA out there… only it uses our AEM technology with good money management and position sizing to enter and exit the market…
Maybe I have taken this out of context and maybe I have not, however you want to explain it. I still find this strategy a bit risky for my taste.
Those who love the progressive lot sizing or Martingale system would love to get their hands on it when it is fully released.
Each to it’s own…
This is purely my thoughts… I know, I know… the product is not even out yet… Why so critical about this? I have not even tried it out yet and I am already passing judgment. Once again sorry neighbor… I maybe prematurely jaded about Martingale systems or even progressive stacking system… This is just my first impression. Judging the book by it’s cover…
Well, if anyone wants to find more information about this new EA which is going to be release, you won’t find it from google just yet. That is because they have only just started. Even googling Kaizen EA took me to the youtube video…
But here are some links if you want to find out more about this new EA…
http://www.facebook.com/group.php?gid=78554878702&ref=mf
http://www.facebook.com/topic.php?uid=78554878702&topic=8583
http://www.facebook.com/topic.php?uid=6457269717&topic=9101
http://kaizentraders.com/ (This site is still under development but I believe it will be active after the launching of Kaizen Traders)
my dear old friend, its just to much promotion for another crap…you waste your time
@onur… for fun and laughter my friend… fun and laughter…
Hey Casey, still wiping tears from my face after the being caught with Cyborg, and that on my first day I entered it, swearing again not to touch martingale or similar systems. And what have I done? I was blinded by the nice 7 month profit curve. So I entered a 30:580 ratio chance game – and lost on the first throw of the dice…
Kaizen… Say: arent we getting too enthusiastic when we see a “new” system? arent we falling in love actually? do we get blinf each and every time when we see that nice curve going up from left to right?
So we say it is summer volatility when we loose once, August vacation when we loose again etc etc.. and we just see our best hard earn money go out of our hands.
A good system shall be profitable every week, all the time.
It is no sense that you win 7 month in a row – to give it away in two bloody days. We respect ourselves better. At least I do. So yes – you can have a drawdown while trading, probably can’t be without. But at the end of the week or month – YOU MUST BE PROFITABLE. even if it is only 2-3 %.That is also great. more then most bank will give you. and that must be maintained with confidence week after week. KAIZEN is right. Once you enter a trade – you know only afterward at the end – if you were right or wrong in the beginning. I also trade ForexPipBank. Last trades of the previous week were great. As usual. But then – the system opened 2 trades on GBPUSD. both went soon to SL.
Weeks and weeks of successfull trades with this expert went down the drain. But luckily – this EA doesnt try to recover like crazy by triplicating the risk. it just reduce the next trades size, Money Management.. and continue as nothing happens. So this week was a disaster. What more can happen? Oh yes, I have two more EA – let them do the final cut on my account….
So all I miss probably is a Kaizen strategy. Then I will know for sure I did everything I can and everything in my power to loose all my money..
Now Really – how can we tell that an EA is really good or X?
Nowhere I see clear rules to qualify as such. We all behave like stupid kids – see a nice backtest, purchase the EA, discover one more scam, go to the next one, and never learn.
We must create a set of RULES:
1.backtest is fun to play with
2. Forward test on Demo account with DEFAULTS settings. or creator recommended parameters/tuning
3. Forward run with microlots.
4. Strategy MUST be disclosed. Hidded strategies means SCAM.
5. Rules when to trade. Is it sensitive to News? days? Hour -specific? Specific Instruments?
6. Automatic Shutdown in case of runaway. Account protection.
7. Variability: SL, TP /TSL etc – by nature cant be fixed. Market has its ways: Up, Down, Sideway, noisy etc..
Each behaviour require specific trading limits and settings. an EA without – should be disqualified.
and so on..
I just suggest to start a thread with rules to distinguish between scam and good EA’s/
Without real evaluation tools – we cant say if an EA is good or bad.
That is said as well for Kaizen.
Lets be smart – make our rules. We will save our money. We will force EA developpers to adhere to better coding.
We would be able to check what we get.
We may be eventually profitable.
I broke last week on of my basic rules: Dont trade martingale systems. The fee was expensive, painfull, immediate.
Raanan
@Raanan… I feel for you. I totally understand what you have been going through. This was probably your first ‘love loss’ with Martingale system….
For me, I have already broke my ‘virginity’ with Martingale a long time ago with roulette. I knew the risk and I new the odds. But that was on a different chapter.
So, for me there is no ‘lost love’ with my losses from Martingale with Cyborg. I got over it pretty quickly and moved on…
I knew what I was getting into but like the goddess Aphrodite, my love affair with Martingale will and probably will continue… for fun and laughter, peace and joy, and whatever that comes with the word that begins with s and end with x.
It will not last forever…. profit wise.
One of the reason why I believe reverse scalping could and should work… from small profits with big losses to small losses with big profits. Ideally that is… I am in the midst of trying to either prove this wrong or prove this right.