Expert Advisors and great returns

Some time ago I had a look at some of the best performers at Myfxbook. As usual you will find a lot of systems with an impressive return.

There are systems reported to having more than 1000% profit in some months.

The “good” thing about that is that those accounts are verified by Myfxbook.

Best Expert Advisors?

The problem is that the best performing systems are the ones that catch the attention of the traders. And those best performing systems, making 500%, 1000% per year are usually good until they stop being good.

Most people who are attracted by those “great” returns invest in those Expert Advisors, and the problem is that in a significant amount of cases the systems go belly up after some time.

So, what the traders should have done is to invest when the system was launched.

When they invest in a system that has returned 500%, the probability that it will go bust later is quite high.

It is similar than buying when the market is making a major top before a bear market.

Many of those Expert Advisors make a good living by selling these systems in the market. They usually charge several hundred dollars, and sometimes more.

Popular Expert Advisors

When I was looking at the most popular systems, there was one that caught my attention. It was sPhantom. If we look at the chart, we can see how this system evolved as usual.

First, it had returns of more than 1000% in less than a year. Second, when that return attracted some people to buy the system (1). Then, when the people buy that system, there comes the bad news. The system suddenly has two losses of 44 and 64%. After those losses, everybody, that had invested before, lost most of their accounts.

That is what happens when you run systems like that, with small profits and big losses.

That system did not last much longer in the most popular list of Myfxbook. It took those big losses of January to send that system to the cemetery.

Expert Advisors promotion

If you are successful in making a system that has that kind of return –about 1000% in a year – you will easily attract many customers. The only thing you have to do is to promote it well.

The Internet is full of stories like that. “Great” systems with great results followed by great collapses. But the one who makes the money is the one who sold the $500 system to 300 or 500 guys.

You can easily make hundreds of thousands of dollars programming “good” systems.

Systems like the one already mentioned, are easy to detect.

Whenever you see a system with a ratio of more than 90% wins, and huge returns, you can be sure that it is very likely that the system is not a panacea.

A big loss is waiting for us at the corner.

Beware.

 

  1. The system has its own website promoting their forex robots. By the way, the system analyzed is not currently shown. It has been replaced by a new system.