addressalign-toparrow-leftarrow-leftarrow-right-10x10arrow-rightbackbellblockcalendarcameraccwcheckchevron-downchevron-leftchevron-rightchevron-small-downchevron-small-leftchevron-small-rightchevron-small-upchevron-upcircle-with-checkcircle-with-crosscircle-with-pluscontroller-playcredit-cardcrossdots-three-verticaleditemptyheartexporteye-with-lineeyefacebookfolderfullheartglobe--smallglobegmailgooglegroupshelp-with-circleimageimagesinstagramFill 1languagelaunch-new-window--smalllight-bulblinklocation-pinlockm-swarmSearchmailmediummessagesminusmobilemoremuplabelShape 3 + Rectangle 1ShapeoutlookpersonJoin Group on CardStartprice-ribbonprintShapeShapeShapeShapeImported LayersImported LayersImported Layersshieldstartickettrashtriangle-downtriangle-uptwitteruserwarningyahooyoutube

Can I Get GPS Forex Robot

Today we focus on a really unusual expert advisor -- the GPS Forex Robot, developed by Mark Larsen and his team.
Now, whatever I will say in the next lines would not matter to those who have heard of Larsen before. Every time a forum participant mentions his name, it's generally followed by a story of ruined accounts, neglected refunds and crappy software.

Still, I believe it is worth exploring this GPS Forex Robot even for the sake of creating a habit of digging deeper into complicated matters -- things that look bright and shiny on the surface, but are spoiled on the inside.

Let us start with the fundamentals.

The programmers of this GPS Forex Robot (version 2) offer it for sale for $149, and there's a 60-day money back guarantee. Thus far so good -- for this cost, we may expect the expert advisor to match the performance of the Forex Growth Bot, or FGB, which costs $129, and the Forex Invest Bot, or FIB,- $197.

More Details:

The cheesy website promotes the GPS Forex Robot as a true miracle maker. As soon as you apply it to a Metatrader 4 (MT4) account, you will just have to wait for the miracle of 98% winning trades to happen. If this seems too good to be true, that is probably because it is not.

But let us examine the block-buster claims further. According to Larsen, a reverse strategy enables rapid compensation for losses incurred. Say the robot buys EURUSD and suffers a loss. Because of this, it will immediately open a reverse trade (sell) -- a strategy called stop-and-reverse. Actually, that's something very easy to implement in a software -- even by newbies -- so there goes the"genius" of both programmers (Ronald and Antony) accountable for the bot.

The fascinating part about this bot is its approach to improve trade contract sizes. When the EA reverses a trade, it raises steeply the trade contract size -- from 5 to 9 times.

To me, this resembles a Martingale strategy, which is a gaming method, in which you start with a specific bet size, then double it every time you lose and keep doing this until you win, when you turn back to the first bet size. What is dangerous about this strategy is that it can guarantee certain profits only to gamblers with boundless wealth and there's absolutely no limit on the maximum bet you can make. But if your wealth is limited, which usually is the case with forex trading, or there's a maximum amount you can trade (again -- the situation with trading), then you may wind up buried under the weight of constantly rising bets without an actual chance to return your losses. In simple words, if you lose more than once, your accounts will most likely fail.

Backtests: Oh, Sweet, Sweet, Martingale!

Let's explore the backtests to see how the peculiar strategy of GPS Forex Robot works.

At a first glance, the picture is rosy, as this incredible robot makes drives a first deposit of $10,000 to a net profit of $100,952. The relative drawdown is at 20%, which is an acceptable risk level. Pay attention, however, that the average profit trade ($219) lags behind the average loss trade ($824)! That's troublesome because a series of losses can get you into a very deep trouble.
The history of transactions is really enlightening, because you may see the odd trading strategy of the robot in action. For instance, on May 27, 2009 there is a heavy loss of $919 after buying 1 lot of EURUSD. The robot immediately reverses the strategy and opens a sell trade but with commerce contract size of 6.8. This time it's a winner -- there's a gain of $904, but such profitable trades cannot be guaranteed.

Forward evaluations: Cradle of Loss

A real account on, to which the GPS Forex Robot is implemented, provides us with further insight about this EA. The transaction is with EURUSD and started on May 21, 2012. Since its activation, the account has registered a profit of 153%, which, given the initial deposit of $100,000, represents a whopping sum.

The account has not registered a single month of losses since its launch, even though the growth rate is gradually declining.

A worrying sign is that typical pips per trade are in 4.6, which hints in vulnerability to changes in market behavior. By comparison, FIB's Synergy FX account enjoys average pips per trade ratio of 13.6, while the ratio stands at 6.6 for FGB's accounts with ThinkForex.

The risk is low, however, since drawdown reaches a good level of 10%, the same as that of FIB and much lower (which is good thing) than the 42% recorded by FGB's account.

The curious part is in the history of transactions as once again we encounter the stop-and-reverse strategy and the particular version of the Martingale method. The robot applies both methods when there are especially heavy losses. By way of instance, after a losing trade (the loss is $10,230) on June 8, 2012, the robot reverses the strategy and raises the trade contract size from 11 a lot to 75 lots. In the event the robot had suffered another loss like the previous one, but with the increased trade contract size, the total loss would have amounted to $71,088. Imagine what could have happened after a series of 6 or 7 losses, or even 20!

If you are acquainted with Isaac Asimov's work, you should be aware of the First Law of Robotics -- that is, a robot can't harm a human being. Well, the GPS Forex Robot clearly violates this law. It could be not harming the dealers, but it is harming their accounts. It's like the Rosemary's baby sleeping in the cradle of reduction. You just do not know when the baby is going to wake up and unleash hell.

The funniest thing is that Mark Larsen appears to not care at all about the strategy used by the GPS Forex Robot. In fact, he is the only person to have rated this EA with five stars, in his own review of this program. Way to go, Larsen! Even if that's the way to hell.

Know your keywords

Expert advisor (EA) -- An algorithmic trading platform to the MetaTrader system; a trading robot. EA's can either be downloaded free of charge or for a fee, or can be programmed in the MQL programming language.

Backtesting -- Testing a trading plan on past time intervals through a simulation.

Drawdown - A trader's biggest loss for a certain period of time, expressed in pips or as a
Percentage of the dealer's profit.
Let's say you begin with a balance of $1,000, then make a profit of $1,000, and following that lose $500. Your drawdown will be 25% ($500/ $1000 + $1000 = 0.25 = 25%).

A standard lot Includes 100,000
Currency units, a miniature lot -- of 10,000; a micro lot -- of 1,000 units, and a nano lot -- of 100 units.
If you are buying 1 lot EURUSD in 1.3000 for example, you're purchasing 100,000 Euro for 130,000 US Dollars.

Pip - The fourth digit after the decimal indication of a price quote. For instance: if the EUR/USD moves from
1.3350 to 1.3351, that is 1 pip. Pips are used to quantify price movement, gain and slippage.

People in this
group are also in:

Sign up

Meetup members, Log in

By clicking "Sign up" or "Sign up using Facebook", you confirm that you accept our Terms of Service & Privacy Policy