During my recuperating month, I have been going back to basic. You know as they say “When all else fails, go back to the basics of it all”.

And I have been going back to basics. Learning everything all over again. And one of the things was to learn how to do is 99% backtest modeling.

I have been gawd dang lazy and have been procrastinating this particularly simple task. It is simple, but I found it a bit tedious or maybe overwhelming. Whatever the reason it may be it was just an excuse for me to not do it. Don’t know why? And don’t know what?

But… I finally got my ar$e to really do something about it. Better late then never as they say…

Now take a look at Brit’s page here on tick data, it’s just crazy with information. Crazy as in a whole loads of information. I have also bought myself into Rob Casey’s “Guide to Getting Rich with Forex Robot” which also explains about 99% backtesting in a more simple and visual way. Even with Rob’s video steps, I found it a bit of a challenge…

If you are not overwhelm with the information written on Brit’s page… then you are probably a veteran and knows most of what he is talking about. If you are overwhelm, you are not at fault. It’s just that we have not reach that stage just yet.

Rob Casey’s guide was must more simple and with video on how to do it step by step… I found it easier to understand. However, when I want to go back to a point where I was stuck… I have to play the video over again… From the start! And I have to wait for the buffering to reach that point before I can see where I did wrong. That was pretty annoying.

He also had a step by step guide… But sometimes without the visual, I do not know whether I was doing it right or wrong.

So… after learning and doing a few 99% backtest modeling on some EA. I got the hang of it. And I though it will be a great help to all newbies if I share with them my easy understanding of both these two sites about 99% backtesting.

Before I continue, I just want to say that this is what I believe to be the most simplest form a step by step. It’s just a do and follow the steps A, B, C, D, to get result E.  There are no additional information as to why and how and what. All this information has already been very well written in Brit’s page. Take you time to read, learn and understand more if you want.

But if you want to get down and dirty and start doing some 99% backtest modeling… Then continue on…

Here you go… 99% backtesting the straight forward ABC steps without the heavy information.

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I have to admit, while I do understand what leverage is per say… One thing that I am still ignorant about is how leverage is going or can be used properly in Forex.

Especially for a guy who plays with Martingale strategy, leverage and margin are two important key… However, all I know is that I need high leverage and high margin in order for martingale to work but I never realize how it can work or will work towards my favor.

So in order for me to re-educate myself, I share with you what I leave, read and understand.

From Wikipedia Leverage
In finance, leverage (sometimes referred to as gearing in the United Kingdom) is a general term for any technique to multiply gains and losses.[1] Common ways to attain leverage are borrowing money, buying fixed assets and using derivatives.[2] Important examples are:

• A public corporation may leverage its equity by borrowing money. The more it borrows, the less equity capital it needs, so any profits or losses are shared among a smaller base and are proportionately larger as a result.[3]
• A business entity can leverage its revenue by buying fixed assets. This will increase the proportion of fixed, as opposed to variable, costs, meaning that a change in revenue will result in a larger change in operating income.[4][5]
• Hedge funds often leverage their assets by using derivatives. A fund might get any gains or losses on $20 million worth of crude oil by posting $1 million of cash as margin.[6]

It goes on to say that there are two different definition of leverage investing and corporate financing. But I guess we will go on to investing as it is more applicable to me.

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I am coming close to my third year with SWVPS and I though it would be nice to write about Forex VPS again. There are many articles out there with regards to the need for a Virtual Private Server for forex EA traders and one of the key questions is which is the best forex VPS around.

Why do you need VPS for your forex EA trading? The simple answer is that your MT4 needs to be 24 hours online and you do not want the internet connection to be interrupted by anything.

And on top of that our normal internet connection at home can be said to be unreliable unless you are living in South Korea.

Fast execution is another thing… but if you are not scalping than probably one just needs a reliable connection to ensure that the trade are being executed properly.

Anyway, I am about to renew my VPS subscription and I though after 3 years there should be another VPS provider out there who might be able to provide me with a cheaper and better alternative.

And so I scour the internet once more to find a good and relatively cheap VPS provider. Of course I am going to use my current subscription with SWVPS as my bench mark. On top of that, I am going to make some assumptions here. Other than the parameter I state below in the table, I assume that all other services and perks are equal and non vital to a forex traders requirement

In my honest opinion, there are what I look at when choosing a VPS provider.

Disk Storage: Now, hosting your EA and your MT4 broker does not require a lot of space. At most, one MT4 broker will only take 6 to 8 MB. So why do you need so much disk storage for?

Even if I were to put all my EA on the server it would only take up about 1G.

Unless you want to do backtesting on your VPS, then of course you need more storage space for data download. And if you want to do 99% backtesting on VPS, you need at least 2G per currency pair. But I won’t recommend doing backtesting on your VPS. I don’t want to slow down my VPS for any reason. After all, I want my VPS to be in peak performances when trading.

More disc space means you can also keep other stuff in there.

While disc space is not all that important, humans being humans, the more the better as they say…

Physical Memory(RAM): This is very important because and unless you want to put in say 10MT4 testing it back to back… either demo or live. The more RAM you have, the more MT4 you can host on one VPS.

Bandwidth: Nothing more than how much traffic moving in and out. From my observation, leaving one MT4 platform with 10 charts open, my bandwith is about 800MB if you have 10 MT4 running with 10 charts open it will only be 8GB.

Again, humans being humans… we just want more for less.

So at the end of the day, I let the figures speaks for themselves. And I am sticking to the one and only the best Forex VPS (in my books) in terms of PRICE and POWER…. SWVPS

Forex Arb is the new forex arbitraging tool that came into the market just recently. Yesterday actually at this time of writing.

The idea of arbitraging in the financial market has actually been around for a long long time while forex arbitraging has also been around for as long as forex existed. The only thing was that there was never an avenue for retail traders to take that opportunity.

But now with the booming of forex broker left right and center, forex arbitrating to retail traders has become a reality.

I myself love the idea of arbitraging… Hey… I even toyed with 100PercentWeener.com which is a sport betting arbitraging software. Great way to take advantage of the price differences between two parties.

As usual… the sales page of Forex Arb is relatively attractive. If it wasn’t for my past experiences I would have already jump into the sales and cough up 2 grand for this piece of software…

It was precisely for my past experiences that I was skeptical with this site. Ok… my past experiences was with sport betting arbitrage but I think there are some similarities between both these two methodology of arbitraging.

So… from my limited experiences in arbitraging. I can only say a few things about forexarb.com.

Firstly, additional information is almost non-existences with regards to what is required. What Jason wants you to do is… Pay first… then we will let you know what is required. The sales page is like any other sales page… blah blah blah… how I came about blah blah blah… sad story about how i lost money… blah blah blah… how i discover this by accident… blah blah and more blah…

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I did not previously mentioned this in my last article, but the one of the foot that was planted in the forex water was also my rebate strategy escapade.

This idea was conceived like a few months back when I was fu(ked left and right by forex and I had to calm myself down to regain my bruised ego.

With a bruised ego and lost in direction, the only thing that I could muster and maintained was my martingale escapade and my rebate escapade.

Both which over the months has slowly risen and have slowly given me back the confidences to explore further what I have.

Previously in my Rebate Report, (which I have since taken down because it was last written a year ago and I needed to update it). I wrote that it should be a secondary strategy only when we applied a certain strategy to it.

While the idea seems sound, it was the application of the strategy that should be fine tuned. Initially it was ‘blast the account with every scalping EA like a machine gun’ and then see the turn over on your account feed your forex rebate account. This is of course with the assumption that the scalping EA works well… And I did that with FXOpen. Which has initially shown me relatively good result but I was unable to consolidate it to find out if it does actually work in the long run.

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Wow… I did not realize that it has been a long time since I last made an entry to this blog…

Last post was in July… and now it is the end of November.

Didn’t realize that it took so long to heal my ego in my forex journey.

In denial? In pain? I don’t really know but the last crash did seem to take  a longer healing process. I seem to be numb with the things that has been happening in the forex world.

Even trying my hands on manual trading took a back seat. Reading all the forex books again and again also did not give me any inspiration. All the motivational books, phrase, sentences, words did not really put me on track to coming back into forex. I just feel so jaded.

But the yearning for success in forex still burns in me, while it does not burn like a fire, it however burns like a charcoal in a barbeque stove. Waiting for the steak to be grilled and cooked.

However… I manage to something which I wanted to do like a gazillion years ago. I manage to do 99% backtesting on a few EA. I also manage to do some work to further improve my Lovely Megan EA, which is the only EA that I am running right now.

Without speaking too soon… I think that is my best EA so far.

I maybe out of touch… but I think forex EA seems to be dying… Most of the old EAs seems to be either have died or selling at drop down price.

Having said that, I seem to be receiving one promotional forex ea every now and then. So probably it’s not totally dead… but I guess the trend seems to be moving towards manual forex trading… Mentoring… or even signal providing.

But as I say… I maybe out of touch…

With one foot in forex… I don’t think it is right for me to write off forex EA.

After a few years trading forex EA… I can only say that there is still more to trading forex EA then just setting it on your account and hoping to make you money without any work.

Now… I have to slowly crawl my a$$ back into forex.

I thought of dedicating another post to my interest in Martingale to streamline my thoughts and principle.

Hell! I have prove the critics right all this while when I busted both my accounts or probably busted all my accounts when I toy with Martingale. Yes, toying with martingale  in any form is dangerous.

Make no mistake, I am not here to prove the critics wrong. I am not here to prove anyone wrong. Neither am I proving anyone or even myself right. I am just here to have some fun with Martingale on Forex.

All forex trader will say that Martingale in forex is BS… Even some EA users thinks Martingale EA are BS.

However, some EA traders things that scalping EA are at times acceptable. To those who ever have this notion are hypocrites. What so acceptable about large stop losses with small take profits.  As it is, scalping EA with large stop losses goes against every trading mantra that ever exist. The logic is that… take as many small profits as you can against one big stop losses.

That in a way is how Martingale works… but the only differences is that the stop losses are much much bigger. So that makes it unacceptable. Risk is an objective perception isn’t it?

Anyway…  let’s get a few things straight here.

Martingale strategy will not make one rich in forex.

Every trader will echo this statement. No one will be stupid enough to risk a huge amount of money on Martingale. Then again, there are a lot of stupid people in the world that does stupid things. Then again, no one has every said has ever come forth to say that Martingale strategy works.

Martingale is 100% risk. All one needs is a black swan.

One of the reasons why trader stays away from this strategy is because they don’t know when the black swan will come. If it does… one can say bye bye to their account. No matter how nice and linear the curve is at first… it just needs a spanner to wreck havoc onto ones account.

Martingale is just for fun, period!

Given that the downside is 100% risk and the upside are just small profits then what else could it be when one trade Martingale strategy? Of course it is for fun. In life everyone wants to beat the odds. Haven’t you bought a lottery before? While the example are two different thing, the point is the same. Everyone wants to try to beat the odds especially me.

I have always said that there is a possibility that if used correctly, this type of strategy can be profitable in the long run. Don’t mean to be disillusion here. But I feel like Galileo and want to go against the ‘church’ of trading when it comes to trading with Martingale.

So… I have make a couple of losses. It hurts… it’s painful but in a sadistic manner, I feel that it is fun. Like a stunt man whose stunt went wrong, hurt himself then heal himself and then get back into the game.

It’s like a drug… I just can’t get this off my mind.

So in order for me to have fun but also to try and make money out of it… I of course have to split my style into two account. One is for fun and absolutely have nothing to do with trading while the other accounts will be for serious trading.

My FXOpen was my fun account…. while my other Alpari and GoMarket will be for some ‘Don’t screw around’ account. So far Lovely Megan has been holding on very strong. Almost two years now and it seems to be holding up. It has not made me rich yet, but it has not yet to make me poor. YET… to make me poor.

Pipstrider and FX-Pitbull where to only other two Martingale EA that I toyed with and both were a failure. And why is that?

Because I never followed my lesson. And one of the easiest lesson which I never applied was to backtest those motherfu(king EA…

That was the differences between Lovely Megan and Lovely Cheryl.

Following this… I shall once again… backtest all Martingale EA because this strategy has worked with Cyborg… why can’t this work with other EA. All I need to do is work a bit harder with backtesting.

Martingale… here I come again…

This goes against every trading Mantra in the book… and this is what I call ‘Rebel without a Cause!’

Hey Forex… Miss me?

I have been healing a bit after the past month since I got clobbering from you. I took some time out from both trading forex ea and blogging to review and reflect. I have also been dabbling with manual trading and it was fun. However, my daily commitment does not allow me the liberty to trade manually. Over the past few weeks while healing I have been doing a lot of reading and relearning the ins and outs of trading in general.

In my last post, I mention that automatic trading and manual trading are two different breed of style. One applies logic into the market while the other apply judgement.

Today I do not want to debate about both these styles. I want to concentrate of automatic trading or forex ea because that is what I still believe that there could be a balance to meet between logic and judgement without having to sacrifice my lifestyle.

So I started reviewing my own strategy as to how I should go about looking starting to get my self back on track with forex ea and see if my personal history or experiences can teach me any lesson.

Lesson 1 – Don’t overload

I realize now that there is no point dumping gazillion EA that ‘looks good’ on my account. Whether demo or live. It’s just too difficult to handle. I think 5 different types of EA should be the maximum that I should use either in different account or within the same account

Lesson 2 – Look at what Brit has to say.

Brit from http://eareview.net/ knows what he is talking about. Read what he has to say. His post is very detail and technical. This is so far the only blog that I have come across that breaks it down to you.

If he is talking about one particular EA, then it’s probably worth checking it out. He has done most of the work… and this type of review takes time and effort. For him to waste his time reviewing on ‘stupid’ EA is just stupid. And I do not think he is.

So if he is looking at it. I should also spend my time looking at it.

Lesson 3 – Be cynical and verify every information.

A lot of forums and review page have one thing in common. Too much information. I should not take these information at face value. All information needs to be verified especially when big numbers are thrown at you.

Most review sites will show you big percentage profits… big figures here and there. So on and so forth.

If it is not verified by myfxbook… Forget it.

Lesson 4 – Consider only Live account

There are many EA developer that will not put their money where their mouth is. If they don’t put it live… Screw it.

And to add a more stringent criteria. If the EA is not live on either Alpari, IBFX, GoMarket or big reputable broker… Screw it too.

Lesson 5 – Do ones own backtesting

Sure…. Brit has done all the nice simulation and 99% backtesting. If I were to take into consideration lesson 3, then I myself needs to verify his information. After all, he is affiliate with all of the EA he review. I mean I don’t fault him for doing that. I would too…

I just want to satisfy my confidences.

Lesson 6 – Remember lesson 1 to 5

One thing about being human is that we at times get carried away with excitement. Reviewing my post I realize how I can at times be so caught up with the moment that I forget what I have learned.

So having to reset my whole forex ea search I believe this 6 new lessons will be good enough go get myself back on track with this next half of 2011.

I’m coming home
I’m coming home
Tell Forex that I’m coming home
Let the rain wash away all the pain of yesterday
I know my kingdom awaits and they’ve forgiven my mistakes
I’m coming home, I’m coming home
Tell Forex that I’m coming home

Forex EA is a great technology and about one or two years ago, there was a debate going on as to whether to trade automatically or to trade manually.

And there was a equal point to both side divide.

I have never join the debate. I just love forex ea because I am just plain lazy… with the capital L. I love forex and I love technology. And as they say you can never be lazy with love.

Ok… there is no ‘they’. I believe that one can never be lazy with love.

And yes… forex ea has made me lazy. Has made me take for granted what forex ea is actually all about. Forex trading is a journey and a tough one where it pits you mental strength and ones resolve to succeed in the forex market.

I thought forex ea is the key to all of this… Very naive and very ignorant indeed.

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Good day all…

Things has not been looking that great for me these past few months. Initially in March… It was a normal pinch. Then in April the breakup and finally in May… The healing process.

My rabbit year does not seem to be hopping for me eh?

Well… this is the cycle I guess. At the beginning of May, I was kind of lost. Never have I felt so lost when it comes to forex trading before. Lost as in not sure what next.

Month after month I have been trying to make auto trading work. But it seems that month after month… the cycle returns.

I think this is a cycle every forex trader goes through. Or for that matter every market trader.

When things are looking good, we get elated. Then when things are looking back, we get stumped. In between there will be a period of celebration and a period of hurt.

Well, if not every trader then it is me who seems to be experiencing this cycle.

Last month was the hurting period. And probably this month is the healing period. Hopefully next month is the ‘screw you forex here I come again’ period…

Blogging is probably the best way to get me on track again.