The Forex Gump EA is an expert advisor that operates as a scalping EA. It works by taking small profits at a time in a compounded manner, using any of three risk settings: High, Medium and Low. It trades 9 currency pairs using the M1 time frame. It is recommended for trading with a leverage of 1:100 or higher.
Forex Gump EA: To Trust or Not to Trust?
This review aims to answer the key question of whether the Forex Gump EA is one that can be trusted or not. It was very difficult to obtain real-time, current results of this EA, as the last trading instance on Myfxbook is at least 8 years old. Courtesy of FPA, we were able to obtain trading results and data that span 38 weeks, terminating on April 18, 2019.
After a thorough review of the Forex Gump EA, our team has cautiously decided to award the EA a “trusted” status, but on a very cautious note. Depending on whether the fears we have for this EA materialize or not, this status stamp could easily change. The Forex Gump EA can be used for scalp trading, but only under certain conditions which we shall describe here.
So why do we think that Forex Gump EA should be cautiously trusted?
- Generally good results over 38 weeks of trading
- Few instances of lack of risk management
- Lack of a stop loss
These points are examined one after the other.
Generally Good Results Over 38 weeks
This trading account statement was taken from a live test of the Forex Gump EA by the FPA team, detailing the trading activity of this EA over a 38-week span. The EA was able to make a total of $8,400 from an opening account balance of $100. This is quite an amazing run of results, but do not take this on face value just yet, as we are about to perform some trade analytics on the software.
The snapshot shows that a trial run with an account balance of $100 produced profits of $227.80. The account was then boosted by the addition of $2,000, which was what produced the rest of the profits. So what it shows is that it is best to use a well-funded account to be able to produce good profits for this robot.
Lack of Risk Management
What really did the profiteering magic for Forex Gump EA? The snapshot below tells the story. We can see that there are few instances in the trading activity when the EA used very large trade sizes that went beyond the 3% allowable exposure limit. These were the trades that produced the big trading profits that were seen in the Forex Gump EA’s performance.
Given the fact that there are three trade settings for the EA, it looks like the user(s) of the EA adjusted the risk settings to allow the EA to trade with very high risk, which ended up producing good profits for the user.
No Stop Loss
A stop loss is also known as a protective stop. There is a reason why traders are asked to use a stop loss, and this is to control the degree of losses if these should occur. Apparently, the Forex Gump EA does not trade with a stop loss. It is therefore obvious that the instances of losses seen in the EA’s results were as a result of trades being closed manually. We also see that the instances of losses were soon followed by the use of large trade sizes to compensate for the losses, and these large trades were all closed manually as well after making few pips in trades.
The non-use of a stop loss by the Forex Gump EA is pretty dangerous, and if a trade were to go awry, it could spell doom for the trader.
Conclusion: To Trust or Not to Trust?
The Forex Gump EA has shown that it is capable of producing good performances, but there are some concerns. Forex Gump EA’s non-use of a stop loss means that the trader has to be on the computer to monitor all trades that are open. This actually defeats the purpose of an EA, especially if the software is to be used on a VPS.
If traders can override these issues and still use the EA as it is, then some profits can be made and the EA can be trusted with caution.