iProfit Forex Robot (MT4 EA) Review
This is a review of iProfit Forex Robot (MT4 EA) based on its real trading history of seven years. It is surprising to see a MT4 EA continue performing well for so many years without much hype.
Most traders who have tried various forex trading robots have lost money and time to various scam products. iProfit is not the regular “run-of-the-mill” Forex Robot and promises to be a great tool for serious investors and traders. This review presents an unbiased analysis of the trading history.
iProfit Forex Robot website provides ample details about the EA’s strategy, back-test results and risk analysis — You can refer the product site for these information (https://iprofitea.com/forex-trading).
This review aims to provide some insights into :
- How the strategy works,
- Analyze the performance history,
- Find its strengths/weakness and
- Estimate the risk/reward of trading this EA.
iProfit Forex Robot has been in live trading since August 2013. Trading results prove that the strategy has been able to survive different market conditions while being profitable.
iProfit Forex Robot is a product of Phibase Technologies, a software firm specializing in Forex research and development. Phibase has been in the field of strategy development since 2011. It is rare to find EA vendors with verified history to prove that their strategies work in real trading.
What Is Neural Network Algorithm?
As per Phibase, iProfit Forex Robot is powered by a self-contained, self-learning Neural Network (NN) algorithm. Like most High Frequency Trading strategies, the idea is not to outsmart the markets. The strategy us designed to keep generating small gains while keeping losses low.
Usually large investment banks, hedge funds and institutional investors use High Frequency Trading. They have access to powerful computers to make a large number of transactions at high speeds and low cost. Typically they make a very small gain or loss on each trade — the goal is to make a net profit for the day after accounting for all costs involved. Trading algorithms are usually proprietary. In some cases, they may be simple strategies like moving average cross overs. The common feature is that all HFT employs many different strategies running in parallel. Some will generate a large number of trades and while other strategies may not be frequent trader, but may aim for larger gains.
For retail traders it is impractical and unprofitable to consider High Frequency Trading. The spreads, cost of trading and execution slippage/speed are enough to guarantee loss over a period of time.
What is iProfit MT4 EA For Retail Traders
While HFT strategies function on price data in second or minute time-frames, iProfit MT4 EA is based on price from hourly time-frame. The concept appears is the same — make a large number of trades for small gain-loss and take a net profit at end of trading. iProfit EA trades about 15 to 20 times per week and tries to make a net profit by end of the week. No open trades over the weekend — all trade are closed before market close on Friday. This is a huge positive and will give traders peace of mind over the weekend news and gaps.
iProfit MT4 EA Trading Style
iProfit strategy is very active during European and US sessions. Only 10% of the trade signals occur during low liquidity hours when the spreads are likely to be high. This is a positive aspect to be notes — especially for traders from US and Europe.
The iProfit EA trades pairs with different correlations : EURUSD, EURJPY, GOLD, GBPUSD and AUDUSD. The system has a positive risk reward with win-rate of 60%. Average gains is +25 pips and average loss is -27 pips. The statistical data from real trading history is in sync with the 13 year tick-data back-test results provided by the vendor. This is a very important factor in our checklist to recommend a trading strategy.
iProfit MT4 EA Trading Risk Management
iProfit MT4 EA always executes trades at market price (No limit or stop orders). The stop-loss of -120 pips and target price of +120 pips is set immediately when executing the order. Server side stop loss is a protective feature essential to prevent blow-out in case of black swan events.
iProfit MT4 EA uses the geometric money management to calculate trade size. Increase trade size when the account size grows and reduce trade size if there is a drop in the account balance. This is one of the best systems to control risk. The equity at risk on any particular trade is always limited to the risk set by the trader (for example : 2% per trade).
The Risk of Ruin analysis shows that there is less than 0.01% probability that the EA would lose 50% of the capital. For this to happen, it would need about 188 consecutive losses. The Most consecutive losses seen in past six years is 15 (and consecutive wins seen is 14). Traders can be confident that the probability of losing more than 50% of capital is close to zero. This will not be the case with any strategy using grid or martingale methods.
iProfit MT4 EA opens only one trade per symbol. Since it trades five different pairs — it is possible to have five open positions at the same time. There is no grid or martingale position sizing methods involved.
The iProfit neural network model is described as a simple RNN model designed to predict the High and Low of the next hour. The strategy seems to use this prediction to make its trade entry and exit.
iProfit MT4 EA Back Test vs Live Test Comparison
The good thing about iProfit is that it is MT4 back-test compatible. With live trading history of seven years, we get a fantastic data period to compare the live trading results to the back-test results. The vendor has confirmed that the period between January 2015 to May 2019 was run with no changes. The last major change was in January 2015, when trading GOLD was included after dropping USDCHF pair.
Comparative analysis shows that the trading results between January 2015 to June 2019 is identical to the tick-data back-test of the same duration. The back-test were conducted with spread of 2 pips due to which the over all results is marginally lower than the real trading results. The IC Markets real account has low cost per trade (less than 1 pip including the commission and swaps).
One of the advantage of iProfit MT4 EA is that it is a frequent trader, but still is not a scalper. The average trade gains almost 30 pips which is much higher than any other frequent trading EAs. The average trade duration is 3.5 hours. About 90% of the trades have trading duration of less than 6 hours and about 9.5% of the trades are open for up to 24 hours. Less than 0.5% of trades extend for more than a day. All trades are closed before the market close on Fridays. As mentioned before, this is an excellent feature of the strategy which means there is zero exposure to weekend news risk and gaps openings.
Data shows that less than 1% of the trades close at Target Price or hit the full Stop-Loss, both of which are placed 120 pips away from the trade entry price. Almost 90% of the trades are closed by iProfit in the range of +60 pips to -60 pips — This appears to be the operating range for the EA’s trade management.
iProfit MT4 EA Performance Analysis
Equity curve of an automated trading system is generally used by most traders to judge a system. Most realize that this is a fatal mistake which often ends up to be a very expensive learning lesson. Equity growth can be deceiving and is only reflective about the good or bad stints of the strategy. Equity growth hides behind risk management which has a tendency to hide the strategy’s weakness.
In order to provide a rational analysis, the equity curve, capital or risk used by the vendor’s trading account should not be considered. For the most accurate performance analysis, derive the pip gain-loss from the MyFxBook verified trading history and use this data in all analysis. This provides a consistent basis for analysis and removes any factors that mask the actual performance of the strategy.
The pip gain graph of iProfit looks good with short draw-down periods. Since 2015, there were three losing phases ranging between 60 to 120 days. There were no long duration draw-down or under-performing periods with this strategy.
Needless to say that for frequent trading strategies to be successful, traders must provide good trading conditions to the EA. Retail traders start off with a disadvantage and are competing against larger, better equipped players. Traders should choose good brokers offering the lowest spreads, commissions and excellent execution. This is one of the first steps towards being profitable.
Swap or interest charges on open position is often overlooked by many traders. This is one of the hidden costs of trading. In case of iProfit, the effect of swaps is negligible since over 86% of the trades were closed within 6 hours and do not incur any swap charges. About 8% of the trades had negative swaps and 6% of the trades had positive swaps — This resulted in negligible net swap charges.
Most brokers love traders who can churn out good trading volumes on their accounts. Ensure tight spreads and commission for lowering their cost of trading. iProfit MT4 EA is a high frequency trader which makes between 50 to 80 trades a month. Every cent saved is a cent earned — Broker reward higher volume traders with rebates, cashback offers and other benefits. Traders can squeeze hard to lower the trading cost and make this EA work to their benefit in the long run.
Conclusion : Who Should Trade IPROFIT Forex Robot (MT4 EA)?
iProfit Forex Robot is a goof choice for traders who want to have a safe, proven frequent trading strategy in their portfolio. The EA will deliver small gains on a weekly or monthly basis which quietly add up to grow your account in the background. This is how large investment firms use HFT to make small gains on a segment of their portfolio.
iProfit Forex Robot is not for traders looking for “Holy Grails” that promises to “double money every month”. It would also not be suitable for traders with account sizes less than $3000 since the gains will not justify the cost of the EA.
iProfit is most suitable for traders with account size over US$3000. It is a great way to get started with this retailer version of High Frequency Trading.
This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.