Reviewed on : 13th May 2010
EA Type: Intraday Trading System
Trade : Eur/Chf 30M
Price: FREE

On the vendor’s website, it claimed that Forex JackBot EA generated 2100% return (2009-2010) with a 27% maximal drawdown. An important information was revealed when Jack wrote in the user manual that EA settings were optimised from 2009 onwards. It will be meaningless to perform backtest before 2009. Let’s review!

Backtest generated with Alpari Uk : ForexJackBotStrategyTester

Backtest Settings:

Trade : Eur/Chf 30M
Initial Deposit: US $10,000
My.Risk: 5 ( 3.6% risk per trade)
Breakout Sensitivity: 12 (default)
Take Profit: 45 pip
Stop loss: 80 pip

Jan 2010- May 2010
Total net profit:  2210.04
Maximal drawdown: 14.79%

2009-2010
Total net profit:  5062.62
Maximal drawdown: 19.59%

Backtest Analysis

Backtest results look good. We will be forward testing this EA. However, return on investment and maximal drawdown seem to deviate from those stated on the sales page. Receiving 2100% return with only 27% maximal drawdown doesn’t look realistic on our generated backtest.Even if it can be achieved, the user may be bearing too much risk to achieve 2100% return at the expense of wiping out his entire account.

Frequency of trade
1-3 trades per day (may not trade everyday)

Maximal Drawdown: 20%

Setting My.Risk= 5, will expect a 20% maximal drawdown. If you decided to increase My.Risk (risk per trade), be prepared to withstand high drawdowns as we discovered a 20 My.Risk will get 60% maximal drawdown! (which can be a substantial loss)

Risk : Reward Ratio

1: 0.5

This means a losing trade will need 2 winning trades to recover the loss.

Money Management

It was provided in the My.Risk parameter. Managing risk per trade can be tricky because it is ambiguous. Using 20 , will mean risking 13% in any single trade. It has be difficult to find out the actual risk unless you view backtests results and calculate yourself. If you are unsure, be aware entering a 20 will not mean you are risking 20% of your account equity.

Lot size will only be adjusted up.
Lot size will not be reduce after a losing trade. It will remain until equity increase by a certain percentage before lot size is increased again.

Ease of Use

It includes a setup manual. It explains EA installation and parameters. Explanation of parameters can be confusing and is not explained clearly. Some info were hard to understand.

Parameter to Set:

My.Risk : controls the trading volume (number of lots). For example, a setting of 20 will open 2 mini lots on a $1,000 account.

Breakout.Sensitivity: will determine if the JackBot will jump the gun quickly (low values) or be very patient (values higher than 20 ) before it enters a breakout opportunity. This setting is open to your experimentation. (default value is 12)

Optimisation is also explained in the manual as author encourages user to test strategy

- with different currency pairs
- with different breakout.sensitivity
- with different timeframes

Honest Result (Backtest comparison with forward test)

It is your duty to first verify our backtest and forward test analysis before trading live.

Weakesses (if Any)

Backtest results deviates from what the vendor has claimed. 2100% returns with only 27% maximal drawdown weren’t achieveable in our backtest. (if you can prove we made a mistake, we would like to change our views on this EA). Nevertheless, performance is not bad either.

EA performance before 2009 wasn’t made known to the public. There maybe a possibility that EA is only optimised for backtesting purposes only (ie from 2009 onwards). It was claimed by Jack that settings were changed due to a change in current trading condition. Thus, we must verify that Forex JackBot will trade like it used to trade from 2009-2010.

Having just 18 months of EA performance is not adequate to provide any conclusive evidence of EA performance in the long term. Forex Jackbot will be placed on forward tests. And trading live using Forex JackBot is not recommended at the moment.

Money management is not easily understand by beginners and backtest has to be carried out to determine the actual risk in any trade.

Conclusion

5/10

More forward test must be carried out before we arrived at any conclusion. Forex Jackbot’s performance looks interesting from 2009 to 2010, but settings were only optimised from 2009 onwards. That means performance of EA before 2009 cannot be determined and hence unknown to the user. The state of ambiguity does not allow us to trade live at the moment.

Regards,

Warren Seah

Share This Page: