XFXEA Review and Verification-Dangerous Martingale EA?
- Entry by trend following, grid trade EA
- Entry by increasing the lot size after losing trade
- Supports two currency pairs
- High rate of return but high risk
Basic information of XFXEA
|Currency pair||EURUSD, AUDUSD|
|Money Back Guarantee||The vendor offers 30 days money back guarantee. Only when the EA is operated according to the vendor’s recommended settings and drawdown of 35% or more occurs.|
It works by combining trend-following EA and grid trade EA.
The official page says “Does not use Martingale”, is this really a low-risk EA?
I tried to verify if it was worth using.
Evaluation of profitability and drawdown
Broker: RoboForex (real account)
XFXEA started the forward test in September 2018. The average monthly rate of return is over 10%. Very profitable.
However, the high rate of return is due to taking risks and operating in large lot sizes.
In the forward test, it has an initial balance of $ 500 and starts at 0.18 lots. This is a very large lot size for a grid trade EA.
There is no standard for safety in any lot size. However, the risk is too great for a grit trade unless it is about 0.01 lot per 1000 USD.
Analysis of trading methods
Combination of trend following and grid
A combination of trend following and grid trading
As explained at the beginning, XFXEA is a combination of trend-following EA and grid trading EA.
Generally, grid EA is entered as a Contrarian. So this is a rare EA that does grid trading with trend following.
In the MT4 transaction history chart below, you can see how it is entering in the trend direction and accumulating take profits.
■ EURUSD 1H White = BUY Red = SELL
If the price moves in the entry direction like this, it will accumulate take profits at about 30-40 pips.
On the other hand, if the price moves in the opposite direction of the entry, it will open additional positions.
In the MT4 transaction history chart below, you can see that it has two additional entries as the price has dropped after the buy entry.
In this example, it entered on March 27th, the position was closed on May 28th, and the position has been held for about two months. It’s a long time.
■ EURUSD 4H White = BUY Red = SELL
Also, if you look at the whole, it will look like the image below.
■ EURUSD 4H White = BUY Red = SELL
In this way, XFXEA keeps holding the position without loss cut when the market moves in the opposite direction.
Grid Trade-Additional Entry
The pips width between the previous entry and the additional entry will change depending on the situation.
There are times when additional entries are made with a width of about 30 pips, and there are times when it is over 150 pips.
Compared to other grid EA, the pips width of additional entries is very wide.
Also, since it is not a martingale EA, the lot size will not increase at the time of additional entry.
Grid Trade-Maximum number of positions
The maximum number of positions of XFXEA is 3.
Conversely, it does not hold more than 4 positions.
Increase in lot size after losing trade
In the XFXEA forward test, the lot size may be doubled.
Trading in double lots is often done after a losing trade.
The table below shows the actual trading history of EURUSD.
|Open Date||Action||Lot Size||Pips|
This EA has been described as a grid trade because the lot size does not increase at the time of additional entry.
However, in trading after a loss occurs, the lot size is increased. The martingale method is adopted.
I don’t know if the trades that increased the lot size are being executed by the logic inside the EA or by the vendor manually.
However, there is no doubt that this EA is trading at high risk.
Forward test environment
XFXEA’s forward test is the result of a real account.
In the first place, the results of the real account are published, so you can think that it is proved that you can make a profit even with the real account.
It is dangerous to deceive only the results of the back test and operate it with a real account, so I think it is a good stance to use it as reference information only.
XFXEA publishes multiple backtest results by currency pair of EURUSD, AUDUSD, and by risk.
One result is displayed below for reference.
|Total rate of return||8119.4%|
|Monthly rate of return (compound)||6.6%|
|Relative max drawdown||27.9%|
|Profit trades (% of total)||73.0%|
The above results start from 0.13 lots against the initial balance of $ 5000.
Even with this ratio, I feel that the lot size is a little large.
Summary of XFXEA
There is an aspect of trend-following EA, and if it gets on the trend, it will accumulate profits.
On the other hand, there is also one side of Grit Trade EA, so it will continue to wait for the market to return while opening additional positions without loss cut.
Also, after a lost trade, it will increase the lot size and make entry. (I don’t know if it’s EA logic or the vendor manually adjusts it)
“Does not use Martingale” is listed on the sales site, but the risk is the same as that of Martingale EA.
If you recognize that it is a high-risk, high-return EA, you may consider using it.