The article was published in FXStreet Education Sector after slight modification.
This is one of the most popular MT4 EA in a third party Forex EA sales sites. Not only is it ranked on the front page, but all users give 5-star reviews. The vendor said the EA was designed with advanced algorithms and utilized deep learning technology. He provided the MT5 Tickdata backtest report, the yield curve of EURUSD, AUDUSD, GBPUSD was a straight linear rise.
Chart 1 About the EA
Chart 2 Backtest of EURUSD provided by the vendor
After downloading the demo version, we ran a Tiackdata Backtest on EURUSD in MT4, and the yield curve was basically the same as the vendor provided. (Default Setting, Spread= Fixed 1 pip, No Slippage)
Chart 3 Tickdata Backtest From 2010
The price of this EA is $938, which is slightly higher than the other EAs on the site, but it is certainly a Holy Grail to have such a consistently profitable EA. Backtesting results show that an initial investment of $10k generated $130 Million after 13 years in EURUSD. The initial one-time $938 investment seems very cheap. I’m sure most of us are excited at this point.
However, after the mood calmed down a bit, we had to generate a new question: With such a stable and profitable EA, why would the author sell it at such a low price of $938 instead of trading it himself? In addition, in the spirit of being highly responsible for our own money, we tried to modify the timing of Tickdata and re-tested it with the exactly same quote.
A miracle did occur at this time, and we saw that the results of all backtests were basically a steady decline in a straight line.
Chart 4 Tickdata Backtest From 1975
Chart 5 Tickdata Backtest From 1982
Comparing the backtest results before and after modifying the timing of the data, we have to think that this is a potential Scam EA.
Conclusion
1– Before purchasing any Commercial EA, be sure to run a Tickdata Backtest.
2– It is necessary to modify the time of Tickdata for testing.
3– Even if the results are satisfactory, it is necessary to think differently: From the author’s point of view and psychology, assume you have created a stable and profitable EA through years of study and practice, why don’t you make money by trading yourself, but sell this EA? Especially most No-DLL EAs can be decompiled very easily within a few minutes…
Then think about the various potential problems from that perspective.