Forex Hacked Review
Published October 18, 2012
Forex Product Review
Forex Hacked EA
About the Strategy
Forex Hacked is a grid-trading strategy with martingale lot size management. As a grid-trading method, it will take profits during ranging markets and drawdowns during trending markets.
There are dozens of ways to trade the strategy and the settings are adjustable by the end user. You can trade it conservatively hoping to achieve multi-year account survival, or trade it aggressively and try to double your account every month. You can trade it on any currency pair that you want to.
The Forex Hacked website posts the settings they're using with each showcase account so you can use the same settings if you want to.
Performance Testing History
We have set up the Forex Hacked performance testing here:
Click here to view performance tests (opens in new window)
The first performance test is labeled '028' because we really did have 27 tests before it. I have been fascinated with grid trading for years and was hooked on Forex Hacked testing for a long time. However, even the most profitable tests all ended in failure during trends.
The only exception is Test ID 028 because it is using ultra-conservative settings and has survived all of the trends from the last 13.6 months. Because of its durability, I made Test ID 028 the 'default' performance test whose results are displayed on our home page.
However, this year I realized I was approaching aggressive grid-trading with the wrong money management strategy (more about this further down the page). So I decided to get the latest settings from the Forex Hacked website and try again with Test ID 029.
Results from July 27, 2012 through October 18, 2012 (83 days)
Starting balance = $10,000
Closed profit = $18,964 (wow!)
Grid-trading never ceases to amaze me. However, it's important to point out that this test is running ultra-aggressively. The minimum balance for these settings should really be $43,000, not $10,000. And I can almost guarantee this account will get wiped out eventually. But in the case of this test, even if we take a $10k loss we can re-fund the account and still have +$8,964 in profit left over. That's one benefit of ultra-aggressive trading.
Main Components of Any Grid Trading Strategy
There are 4 primary components of all grid-trading strategies (including Forex Hacked).
||Exit strategy for profitable trades
||When the last trade in any basket reaches these number of pips in profit, the whole basket of trades will close.
Higher TakeProfit will increase profitability but also increase risk because the market will need a larger retracement in order to hit TP.
||Lot size multiplier
Each sequential trade's lot size is increased by this multiplier.
Larger booster = more profit, more risk.
Smaller booster = less profit, less risk.
||Distance between trades
The distance the market must move against a trade before it will enter another in the same direction. Often called a "pipstep".
Larger PipStarter = more conservative, survive larger trends.
Smaller PipStarter = more aggressive, try to get in and out faster.
||Maximum number of orders to enter
||A risk prevention measure. You must decide how many trades to allow before the EA stops taking new orders.
Example of Conservative Setup (our Hacked 028 test settings)
This test uses a large take profit and booster, but it is extremely conservative because of the HUGE PipStarter setting. The market must move 170 pips between each order that is placed.
Example of Aggressive Setup (our Hacked 029 test settings)
The small distance between trades (PipStarter) makes this strategy much more aggressive. Each order is placed 31 pips apart and we need a 45-pip retracement to exit in profit. In addition, our starting lot size is 0.05 lots (instead of 0.01) which is one of the biggest reasons this is an aggressive test.
Money Management When Using Aggressive Strategies
During 2011 and 2012 it became very clear to me that it will be impossible to turn a small trading account into a large trading account while using high-risk, high-reward strategies. No EA in the history of Forex has been able to average 30%+ gains per month without eventually blowing up the account or experiencing a massive drawdown.
Expecting to trade a high-risk, high-reward strategy and
compound 100% of your profits is an unrealistic dream.
Instead, I learned that profits made from high-risk strategies need to be withdrawn and saved FREQUENTLY to protect them. "Frequently" may be weekly, monthly, or after any significant gain, depending on your situation.
Since a large drawdown (or even a margin call) is almost guaranteed to occur with any high-risk strategy, those profits need to be protected so you can re-fund the account if/when the time comes!
Also - and this is an extremely important note - you should only begin trading with a portion of the funds you're willing to risk on the strategy. If the large drawdown or margin call happens shortly after you begin trading, you want to be able to re-fund your account. "Hoping" that you bank enough profit before a drawdown is not a wise business strategy.
Scott's Personal Opinion
I lost a lot of money in January 2010 trading a grid/martingale strategy because I was not properly prepared. I had only done 3 months of forward testing, no backtesting, traded a 20-pip grid on a whole bunch of currency pairs and I left it running during a Non-Farm Payroll announcement. It was stupid, it hurt and I became very gun-shy around grid-trading strategies. I have not traded one since then.
I have heard about people who have been trading with Forex Hacked for years and making money with it. I have not spoken to any of these people personally, but I suspect they are withdrawing their profits frequently and probably turning it off prior to major news like NFP (unless they're trading a very wide grid, then disabling during news is not necessary).
As of today (October 18th, 2012) I am not personally trading Forex Hacked but that is only because I haven't had the courage to do it. If I didn't have a painful history with grid-trading I would certainly be using it and thoroughly enjoying it (until the fateful day that it experiences a margin call, of course).
Pricing and Availability
A Forex Hacked EA lifetime license costs $169.99. The website warns that there are limited copies but we are not aware of how many copies are available or when/if they will close down sales.
Forex Verified Discount Program: Certain trading accounts at Forex FS or HotForex may qualify for a free license for the Forex Hacked EA! It depends on your account balance and planned lot sizes/settings. Contact us to talk about it.
I am happy to assist clients in our Discount Program with the setup & configuration of their VPS and the installation & configuration of the Forex Hacked EA.
A new version of Forex Hacked is coming soon and will be sold separately. Owners of a Forex Hacked license will receive a large discount on the new version. Forex Hacked "PRO" is an entirely new project that could take grid-trading to a whole new level.
The Bottom Line
Let's face it: markets are pretty much unpredictable. It's tough to find a mathematical algorithm (or even a human trader) who remains profitable for a long duration. The only way to continually bank profit is with grid-trading because you're making money no matter which direction the market goes.
The risk comes into play when the market moves a long distance without retracement: that's when you get hit. Can you bank enough profit to overcome those times? Will you trade a wide grid (conservative) or a narrow grid (aggressive)?
These are important questions to consider. All in all there is no doubt, grid-trading is one of the most fun trading strategies; until it becomes the most painful.
Click here to visit the Forex Hacked website.