Here is my review. Forex Autocash robot by John Burroughs is not a quick-rich scheme, but a system pursuing an "ideal-case" long-term investment plan which does not allow a failure (loser) at any point.
Let's put in this way. John Burroughs has a starting capital of 10,000. His robot trading performance (with zero losers) has allowed him to build up a "paper fortune" of 5,ooo,ooo (5 million) in 8 years and 8 months. How did he do it and how does the robot work exactly? What are his parameter settings?
I've got some answers for you here at ScoutForex. Here are some trading facts based on the trading record provided on his website:
- John Burroughs had risked 100% on his initial capital.
- The forex autocash trading robot was designed to churn out a small gain of approx. 1.05% each time (per closed trade).
- The robot was only allowed to open one trade at a time.
- The robot had not encountered any losers in the past eight years and eight months.
- The robot traded about 68 times a year.
- All winnings had been compounded.
- The robot produced 100% return in the first year.
- The robot had quadrupled his trading account at the end of second year, i.e. by making a 300% return.
- This subsequently led to a sizeable gain of 16x, 70x and 290x initial investment in year 4, 6 and 8 respectively.
- Below is the equity return curve which covers a trading period of 8 years with the forex autocash robot.
All in all, he stood to lose out all if the system had slipped up at any point - with one losing trade. Very surprisingly - the system did just fine.
On his trading video, he has recommended using a setup of 10% risk level instead - meaning that if the robot happened to lose out on one trade, you still have 90% of the remaining account balance. Let's look at the potential return curve below.
The 10% risk level encourages safe trading, you could still score well with the system by allowing your trading account size to increase steadily. You will probably double your account size in 10 years if there is no major slip up. The results actually equates to a approx. 7.2% compound annualized return.Meahwhile, a higher 50% risk level will probably get you to this point in eight years, i.e. with 16x initial investment (see chart below). At present, we are all provided with the same autocash robot trading routine. Whether the whole 9-year no losers feat could be repeated, it is difficult to judge right now and only "time" will tell. We shall revisit this in future.
In addition, I have not yet explored the prospect of using multi positions at one time. With that, perhaps you could reach your set goal in a faster time span. And what about the the forex autocash trade entry system which appears to do the trick for the past nine years. This warrants some investigation and explanation in future when things are moving.
p.s. For your information, it is also possible to have the robot trading a fixed number of lots as an alternative to the scaled-lots approach . "The person using the fixed lot option will probably earn more money per trade at the beginning than the person who selects the scaled lots option. But as time goes by, the scaled-lots guy will leave him in the dust", so said John.
p.s.2 Technical Help: Comprehensive Forex AutoCash Robot Manual
6 comments:
"You will probably double your account size in 10 years if there was no major slip up."
So, using the Rule of 72, that's a 7.2% compound annualized return. That's about the same as long-term buy-and-hold of a stock index with reinvested dividends. It has a good risk/reward IF you go 10 years without a losing trade. However, if you have an occasional 10% loss (which I think WILL happen in real-time trading), the return will be less.
Interesting. It's definitely not the "quit your day job" system that the marketing hype claims, though. Unless you're willing to take a huge risk (like the 100% in the hypothetical results). In that case, I'm not sure if it's any less risky than an aggressive Martingale or other high-risk strategy. Time will tell, I suppose.
"Rule of 72, that's a 7.2% compound annualized return. That's about the same as long-term buy-and-hold of a stock index with reinvested dividends."
Thanks for pointing out !
No problem. I've also heard the EA often uses 6 or 7 pip profit targets? Is that true from what you've seen? With 6 pip targets and a 650-pip stop loss, the great win rate isn't too surprising!
This is indeed right. The 7-pip gain per day contributes to a percentage gain of around 1.05% for each closed trade.
Thanks. A risk:reward of nearly 100:1. Wow!
Oh, and one clarification. You noted "John Barrows (actually 'Burroughs') had risked 100% on his initial capital."
Did he really, though? The only thing his lawyer's letter verfied was the backtest of the system. Was Metatrader up and running with fully-functioning EAs back in 2000? That's when the results began, and spot forex wasn't nearly as popular back then. It's not clear when or if Burroughs ever traded this EA live. He makes it sound like he did, but I don't think he ever says which results are real and which are hypothetical (backtested).
Sales tactic, probably. Anyway I've always interested in new trading methods and their money management aspect. Just to let you know that MT4 2008 EA championship has just started. I'll probably do a coverage soon.
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