Fractal 4 Review

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Review Updated :23 ^th Dec 2009

Fractal 4 EA comprises of a scalping strategy and a channel breakout strategy. It trades a total of two strategies. When market is not volatile, Fractal 4 will employ the scalping strategy where it executes many trades with very small take profit levels. Where market is expected to be volatile, it will trade the channel breakout strategy.

Types of Robot : Scalping and Channel Breakout Robot

Broker Platform : Metatrader 4 (work on both 4^th and 5^th decimal brokers)

Back Test and Forward Test Generated With : Alpari UK

Price : $197 (one time payment)

Refundable: No

Pair: Eur/ Usd , Gbp/Usd, Eur/Gbp  (4Hr Timeframe)

1. Money Management

Fractal 4 provides money management. However, the risk parameter does not directly reflects the amount of percentage risk in any single trade. The owner of Fractal 4 recommends specifying risk at 0.3 with 5 aggressive setting.

Scalping Strategy = 1% loss in any single trade if stoploss is hit

Channel Breakout = 1.6% loss in any single trade if stoploss is hit

The data I have collected is based on what has happened to FxEAReview’s forward test. In addition, the scalping strategy may open 5 positions at the same time, and the maximum risk you are taking is up to 5% in any single day.

The owner did not cover the money management in detailed but provides a recommend setting to users expecting everyone’s risk tolerance is the same. This is clearly not a good idea in the perspective of the end user.

2. Drawdown

Although the website specified that we can back test the strategy, we have tried but were unable to do it. Instead, they generated back test results and invite users to visit their blog.

We believe that it is not reliable to write a review based on their generated back test due to the fact that back test results can easily be distorted. We will refrain from using system provider’s back test results.

As such, we were unable to get the drawdown figures from our research so far. We will update you as soon as we have the figures.

Trade Analysis

Scalping Strategy

Scalping Strategy will execute 5 positions every day at 21 00 Hr (Gmt). It may not trade every day.

Order Type = Market Order
Take Profit = 4- 10 pip
Stop Loss = 32 pip
Maximum Opened Positions = 5
Risk Per Trade = 1% per trade

Risk : Reward = 1:0.125

It takes 8 winning trades to recover 1 losing trade.  (May defer because EA manages every trade and exit at different take profit level)

Channel Breakout

It uses build in channel breakouts indicators to determine entry positions. If price breaks, breakouts above or below the blue lines, an trade is entered. The price breakout must occur during the European trading hours in order for a trade to be entered.

Order Type = Stop Order (Place at blue lines as indicated by build in indicator)

Take Profit = Managed By EA
Stop Loss = 32 pip
Risk Per Trade = 1.6% per trade

Risk : Reward = Cannot Be Determined

3. Ease of Use

Product comes with a manual and its in-built indicators.

Risk Parameter requires back testing in order to find out the risk % in any single trade. Forex beginners may  not be able to determine the real risk % .

Following Settings Can Be Optimised

Risk
Aggressive Setting
Take Profit
BEP
Min Stoploss
Max Open Position

We felt that these settings were not covered adequately in the user manual and we do not understand how it is used.

Fractal 4 EA is not easy for usage.

4. Honest Result

FxEAReview believes that forexhope fared badly in this area even though Fractal 4 is a profitable strategy.

1. System cannot be backtested (salespage indicates that it is possible)
2. Money management does not truly reflect the real risk in any single trade

Click Here to View Forward Test Results

Update 23th Dec 2009

Our forward test account was disabled because the robot did not trade for more than 3 weeks. It was working fine until we applied the new update. We will clarify with the trading provider on this issue.  A new demo account will be opened and forward testing will resume in Mid January 2010.

5. Weakness (If Any)

There are variations between what the owner promised and what he delivered.

System is backtested to work from 2008 stated by the owner. A general concern is can this strategy works long term?  System cannot be backtested and as a result, we aren’t able to test the long term performance of this strategy.

It comprises of two strategies but money management was not defined for each respective strategy.

Scalping strategy may be spread dependent.

6. Support

Support took 5 days to reply and support personnel provided unsatisfactory answer.

A picture depicting the e-mail reply is displayed as follows:

Click Here to View Our Dialogue with Support Part 1

Click Here to View Our Dialogue with Support Part 2

From the dialogue, you can see that we can getting increasingly frustrated with them not addressing our problem. We have uploaded our own backtest result for them to see but they kept requesting for our result. With waiting time of at least 3 days for them to reply, clearly we do not expect to get simple replies but answers to our problem.

Summary

Fractal 4 EA has two strategies programmed to capitalise on the different market conditions. Strategy performed well in our forward test results.

We believe that the system manual should be improved to educate the system user on the various parameters. Several parameters should be introduced to cater for two trading strategies and money management should be simplified to make it easier for end users.

Finally, back test should be enabled.

Rating

6/10

Warren Seah

Feel free to use this article on your website or ezine as long as the following information about author/website is included.

Warren examines commercial trading systems and has since started researching and analysing systems to uncover good systems which bring in consistent profits. By publishing all the research papers and detailed analysis online, he seeks to educate potential investors and traders on the world of trading the forex market with automated systems.

To read more about these research papers and analysis, go to

http://www.FxEAReview.com

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