Forex

Expert Advisors Reviews

VolcanoFXEA Review - Is it scam or reliable forex trading system?

At this point in time, you have probably already seen one of the “get-rich-quick” forex/option trading systems. In this review we will discuss VolcanoFXEA and determine if it is a scam or a legitimate investment opportunity.

 

Strategy

 

VolcanoFXEA is a system which utilizes three different trading algorithms. One of them is trend-following, while the other two attempt to capitalize on market reversals. Looking at the recent history, we can easily spot the reversal strategies trigger far more frequently. This is to be expected simply due to their nature and recent market conditions. 

 

The system trades mostly major currency pairs like EUR/USD and GBP/USD. This is generally a good sign, as those are very liquid instruments. This is beneficial for system followers, as the likelihood of slippage messing with the execution is reduced, when compared to copy-trading in less liquid markets.

 

After a review of the past trades, we can say the system trades as described with fairly high confidence. The precise entry and exit parameters are not mentioned, of course, but trades are executed in a manner which is in line with the guidelines. There is no dangerous martingale or “hedging” involved.

 

Historical performance

 

The VolcanoFXEA system has been ruing since October 2013 on myfxbook.com.  Performance was mediocre at best in the 2013 – 2014 period. A serious re-optimization probably took place at the end of 2014, as the system’s results changed drastically from that point onward. Another key element, we must also mention is that there was an additional deposit in December 2015, which does alter some of the historical metrics.

 

VolcanoFXEA profit chart

 

The drawdown in 2014 was significant, even spiking above 40%. This is generally a bad sign, although the system managed to recover the losses. Even after the supposed system overhaul, there still were a few moves above 20%. This is still risky, but far more manageable. 

 

VolcanoFXEA drawdown chart

 

The system has won 67% of all the trades, which is a pretty decent result. However the average losing trade is almost 37% that the average winner (30.25 pips vs 19.06 pips). 

 

The average pips per trade are fairly low, at 2.83. We would generally recommend following systems where this ratio is at least above 3.0. Keep in mind, whenever you follow an automated system, there is the risk of slippage – your trade being filled milliseconds after the initial one, at a slightly worse price. Another key point factor is the decentralization of the FX market, which can lead to slightly different quotes at different brokerages.

 

You must keep in mind, historical performance can not serve as a guarantee for future results.  VolcanoFXEA was ran at IC Markets since 2013, with the track record being verified by myfxbook. 

 

Pricing

 

This particular system is not bring sold separately from the myfxbook.com offering. However the word “volcano” is popular and used by other sellers of EAs. We can not guarantee they offer the same or similar product, in fact the opposite seems more likely. Myfxbook’s Autotrade charges commission on every trade a system executes.

 

Bottom line

 

Overall this system would not be recommended by us. Our major concern is the low pips per trade (2.83). This is definitely not a scalping system, but at the end of the day costs will add-up. The relatively high drawdown level is also worrying. Furthermore, the history seems to have two phases, which can clearly be seen on the profit chart. To be fair, since 2015 performance looks a lot better. Maybe the people operating the system should have created a separate account after the apparent overhaul – this would have looked a lot better in our eyes.

 

TAGS: VolcanoFXEA  VolcanoFXEA review  VolcanoFX EA  forex system  forex trading system 
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