THE MAGICAL STORY OF PROFITALTO MONY
beloved readers, it has been more than a year since we have gone head-to-head
with any particular trading signal and its owner. Well, time has come and we
feel like coming back for one short moment - to put things straight with one of
the most-advertised social trading signals on Telegram - Profitalto MONY (https://www.mql5.com/en/signals/717269).
What sparked this? - someone did try to come after ONE OF FX SUMO members once,
he got away with it. Recently, the same shenanigans were repeated, time to end
these sucker-punches and show one how to make a proper KO.
- Is this personal? - hell, it is.
- Will this be aggressive? - content-wise, definitely. We will try to keep our language in check here, though, don't worry about that.
- Will this be entertaining? - emm, daa, wouldn't put our efforts into this if it would be anything else but fun.
- Will this be educational for investors and our readers? - YES, we will wipe floors with some members of that signal, but will do that in educational manner, supported by our usual dose of analytics.
What lead to this, long-story short:
- There is a Telegram group, historically created for different signal, which the signal owner (Emilio) is using to promote his current investment product, a trading signal Profitalto MONY. Our members (yes, memberS) somehow happened to become a part of this group, upsy, just for the curiosity.:) One of our lead members did go head-to-head with signal owner numerous times questioning his decision making, by pointing out various weak points. His concerns, though, were never addressed.
- Instead, the signal owner decided to use PERSONAL arguments when defending his points. On first case, he showed screenshots of our trading performance in his group (ah, yes, according to the rules, one can't share other signals' performance there) at the time of drawdown peak, stating that due to our own performance we have no rights to criticize anyone else. Hmm, we could have defended our position as well as performance of our product, however, didn't want to follow author's negative-example by breaking his proclaimed rules of HIS OWN group. We didn't react, just warned the author that shenanigans like this will lead to an answer from our side.
- The same signal owner had his side-shot towards our leading member again, today, showing screenshots of conversations from other groups where the same member of FX SUMO goes in very aggressive manner after some of the scammers that tried to lure investors into new financially-unreasonable and heavily manipulated investments. All of this happened in one of the Telegram groups, which was based on discussing MQL5-based Bushmills signal (https://www.mql5.com/en/signals/597267) - recent losses and ignorance from its author gave "green-light" for new scammers to emerge and quickly offer their products for the people that have lost their money. Most of the conversation has been deleted by the scammer, yet, part remains where he is being called "manipulative piece of shit", "asshole", and his signal being called "useless trash", "scammy shit" and "total garbage". Was our member aggressive and negative towards the particular scammer? - Yes, he was. And he takes full-credit into convincing all 30+ members of that group to stay away from products like this, we applaud.
- After this recent interaction, our member was kicked out from the Profitalto discussion group. Normally, we couldn't care less, as at least another FX SUMO member is still part of the group, but here it is about showing spine and character. Will we allow some dumbass to come after one of our own time and time again? - Guess the damn answer to this question.
We do love the old-fashioned payback, it gets our juices flowing.
...promo for what is coming. ITA subtitles, so that EVERYONE would know what's up.
Ok, lets start this story, yes, STORY. Information that we found sometimes is so crazy and "bananas", that presenting it all together would leave more questions than answers to our readers.
Honestly, we have been digging into this signal for quite a while, cause of its strange roots. Based on what Emilio has stated openly, there is him - promoting that signal, there is "a trader" - looking over used EA, and then there is an EA, not visible to public and of which only 1 back-test has been shared so far in the group. Hmm, sounded dubious from very beginning, it was promoted in super-aggressive manner across various Telegram trading groups (by Emilio), thus, we felt uneasy about this one from the very start.
In order to have all of this into the needed context, one should know the past of this one was created, right? - Well, first there was Frero signal, do You remember that one? - blew up with millions of subscribers' money. Yup, that was the initial signal Emilio was promoting left-n-right, and the particular Telegram group (from which our member got kicked) is the one that was used to do this. ~400 members were part of a group, tens had invested money, there was Emilio shouting far and loud, trying to attract new capital and "managing the whole thing". It was all fine, till it wasn't - the trader went crazy, opened manually a ton of positions on EURUSD and blew it all up.
From Emilio's perspective, this was risk-free side-hustle -> just shout general phrases left-n-right, attract new members, take part of received commissions, that's it. Well, what would a rational person in Emilio's shoes try to do here? - there was "an open" group left with ~400 potential targets with him as the only owner and, btw, some of those targets just lost a ton of their savings. We will give You a hint, look above at the reasoning of why one of our members went crazy in one of the groups on signal that was falling apart. For those who still don't get it, the answer is easy - the owner had to find ANOTHER PRODUCT AS SOON AS POSSIBLE in order to not lose the interest of the group and while other members hadn't fully figured out on how to regain the losses. So that's what our beloved Emilio tried to do here.
The new "product" had to be built around this existing Telegram group and the urgent need to replace Frero failure with "something else". The role division PITCHED was the exact one like Emilio had previously with "Frero trader" - someone would sit in the shadows "trading" while Emilio would provide noise for the group. Just shows the level of urgency at which someone, just anyone, had to be found.
It seems that, finally, Emilio found a solution. He found an EA which had this "magical jaw-dropping back-test" on EURUSD currency pair. He was not able to figure out on his own how to set it up properly, so he approached the original author of the EA. Again, long story short, the creator of the EA was apparently convinced into removing the EA from MQL5 platform and into this "partnership" with Emilio, becoming the "mysterious trader lurking in the shadows".
What is interesting here - although this EA is used by "only this signal and its trader", there was (and still is) a copy of the EA available to us, therefore, we could have studied it for a second time, this time even more extensively. This was done so that FX SUMO team could see "the magics" with our own eyes.
FX SUMO will not reveal here the name of the author or the EA; but we would depict it as a "Dark Horse" lurking in "Blue Skies". This particular EA hasn't been first masterpiece of the author - every other of his 10+ historically-created EAs have been failures, thus, this one has a great chance of succeeding, yep, it must be. How do we know all this? - in simple terms, we keep in our minds all the historically-tested EAs, even, if we don't choose those to be a part of our own trading signal.
Hmm, after all we have stated above, this suddenly becomes a question of EA's quality and nothing else, right? This particular signal is new - its history is irrelevant, "the trader" is publicly unknown, there is Emilio spreading general phrases without any particular meaning all day long, what's there to be analyzed? - yes, You got it right, only the majestic-damn-miracle EA behind this one.
Back-stop here: We in our own signal do extensively use various EAs, thus, testing these on everyday basis is something we MUST do. Do we feel super-confident bringing this analysis forward in public? - no, but we have enough of knowledge to see and smell nonsense when that is being presented to us.
So, this EA. Trades only EURUSD. Trades on EURUSD M1 graph, though, trading decisions are based on hourly-timeframe. Opens grids, if positions go against initial direction, add new ones on each following hour. The distance between each consecutive position is no-less than 5 pips, grid grows with 1:2:3:4 (etc) sizes. That's the default and that's what is being currently used here, in the signal. This is the reason why some particular members of those Telegram groups are so fast at determining "Break-even price" of the signal's open positions, they must be running the EA at the same exact - default - settings. Ok, so we have established the basics...
From the smell of this EA, it reminds us Grid Hero (https://www.mql5.com/en/signals/597267) . Very similar trading strategy, actually, the all key-concepts are exactly the same. Plagiarism? - no no no, never, wink wink. For those that haven't heard about GH, this was widely used EA in the period of 2016-2019 by MANY members of MQL5, including FX SUMO. At the end of the previous year, the EA broke down, and it suffered major losses as it got literally stuck in EURUSD positions for weeks. Hmm, and the EA was much less-risky than this EA used here, this is leading to damn paradise, it really must be.
Ok, so history shows that particular EAs, that are super-close in style to this one, are going through their problems, happens, right? - but this one still has its magical back-test, right? - so there must be settings that are capable of squeezing through everything, right?
So, what is given to all of us publicly? - 10 yr back-test on EURUSD, great, anything else? Not really...
FX SUMO, using all our experience, decided to test this EA on our own terms:
- We ran the default settings on 7 different major FX pairs, on all the system managed to CRASH. If we run defaults on other major pairs (even those, less-volatile then EURUSD, to "help" this gridding, making those distances and everything more stable), the EA is crushing once per period of 3-60 months (NZDUSD was the winner of staying alive for almost 5 full years). Everything else crashed over and over and over again, ok, looks wonderful.
- We tried reducing risks up to 5x, on NONE of the 7 other major FX pairs the EA survived 10 year period. Ok, at this point we became worried;
- We tried running the same test on EURUSD changing the pip-distance value from 5 to 7 pips -> CRASH; from 5 to 3 pips -> CRASH; tried changing grid sizing growth from 1:2:3:4 to 1:1.5:2:2.5 -> CRASH.; tried squeezing and widening grid sizing at least 4x on both sides, all failures, CRASH.
- We tried "closure on Friday's function" that should close all the positions on Friday's evening irrespective of the current result & limiting potential effects of getting stuck -> EA's result on EURUSD gave 10yr Calmar ratio of 1.5, while on other pairs the results ended up in negative.
- Our final hope was that ANY of these modifications would work with 60% Cut-off, maybe something can stay stable for long-enough, before inevitable cutoff comes. Instead, absolutely all of these modifications (on both EURUSD and other major 7) lead to 10 yr Calmar ratio of <2 (horrible), or entirely negative end result. Cut-off level of 30% lead to even worse results across the board, as SL level got hit way sooner than the EA (with different settings) could earn that back.
At this moment, we had our conclusions. We had literally spent hours analyzing this underlying EA (probably, more than the spoke-person of this magical EA) and had nothing working, except, those original settings. Kids, and this is the moment You sit down and wrote on Your damn notebooks:
If something is working just on 1 price-graph and breaks down as soon as any, even minor, changes are applied to the original settings, that's what we call OVER-OPTIMIZATION.
Do we know for how long it will continue running? - we don't, as we mentioned above, some price-graphs, for which the EA wasn't optimized, managed to stay alive for 3 months, some for 50 months, it becomes a coinflip at this moment with the current risks. Is the publicly shown back-test legitimate source of future expectations? - nah, You could wash that one in the toilet. It just shows that the EA itself is not absolutely useless and with much-needed optimization it can squeeze through 10 yr period for a specific price-graph, that's it. Methodology is not strong enough, as other pairs and their tests showed, while risk management has been ignored completely, with deposit load % being already super-high already on live trading.
One might see that we are not sharing any pictures of these performed back-tests. We could do so, but why? Should we invest even more time into preparing materials that will bring out avalanche of new questions and will be forced by subscribers of a system which is not even our own? - nop, maybe some other day. On the other hand, You, as an either potential or existing subscriber, have all the rights to ask for Emilio and his shady trader to share legitimate back-tests that actually do show the EA's capability to survive on other pairs with similar settings to those used by default. Our guess - nothing of this sort can be provided, because there is actually no other price-graph on which this, currently used, set could survive, period. Again, definition of overoptimization.
Ah, and btw, those of You asking for confirmation here - the only thing that Emilio and his "trader" in the original settings can change are the lots per 10k (basically, just reducing risks per money, leaving all the key settings as they are). Nothing, absolutely nothing else can be changed, thus, whenever someone creates a poll asking "Should we change our risks per trade?", be aware that You are influencing the ONLY POSSIBLE DECISION that these guys on their end could take, nothing else, absolutely nothing. Does show great confidence, right? - By voting and trying to persuade the signal "managers" of lowering the risk, effectively You are doing ALL THE WORK for them, cause, again, there are simply no other decisions to be made trading-wise. Which leads us to the Present...
Ok, let's sum it all up.
- We have a sales-person, who is not really sure what he is selling, but nobody cares, as long as something is being thrown out to the masses, right?
- We have a trader, who is supposedly "over-looking" this EA, but, from the way this signal and its management was organized, anyone could have been picked for that role, no standards whatsoever.
- We have room for "manual interaction" possible from the "trader", none of that has been displayed even in times of major troubles.
- We have some random back-test floating around, based on which ~200+k USD have been invested in the signal, yet its credibility can be easily questioned.
Phew, what a story so far, we are amazed ourselves.
One of the most-commonly avoided topics on Profitalto group was money management. Here is an example of legitimate questions asked recently and the answer that was provided:
- 60% DD was 30 pips away;
- Reduction in lots by 30% would have resulted in 35-50 further pip distance till the moment 60% DD would have been reached (would depend on PA downward and distance between the next entries). Ah, and yes, NO MANUAL intervention would have happened, easy.
Pleased? - was it so hard to provide legitimate answer to the system You are managing?!? - jokes, for crying out loud. "Now there is more, much more, room for trading" - how ignorant can one actually be?
Drawdown/Deposit load ratios are horrible - even with this "huge move" against the signal, this ratio remained below 2, that's just surprisingly bad. Cutting risks by 30% wont improve the situation, that would still be around 2, which, on the case the signal almost blew up, remains a catastrophic value. Risks currently are just stupidly high, and it seems that this won't change anytime soon.
tends to call this signal and Blackwave "the only 2 reasonable options out
there". Nop, there are more (Watchlist) and nop, Profitalto is not
a part of that list. Both Blackwave and Profitalto tends to get into troubles (as every other signal out there), however, its a question of how these situations are being solved. After yesterday, Profitalto will be allowed to open a grand total of 7.2 lots per 10k accounts through trades that are all in very (VERY) short corridor, while Blackwave, with its current settings, will be allowed to open a grand total of 1.76 lots per 10k accounts through trades with wide distances between each other. That's the difference, anything else needed? - ah, and while drawdown/deposit load ratio for Profitalto is below 2, the same exact ratio for Blackwave is above 7. Ok, boyz, this is the dagger, final nail in the coffin.
It is important to understand - if the signal had hit its 60% DD mark, we wouldn't make this article. In spite of Emilio's sucker-punches, we don't go after something that's already broken up. Here, the signal is still running, more capital is set to be sucked in, signal promoter is absolutely unable to provide specific answers to specific questions, and everyone in Profitalto group is playing dead. Well, we are not, and although one of the FX SUMO members is no longer part of the group, we just love to shake things up.
Obviously, one can try to defer from all of this by having statements like "we are still positive, nothing to be fixed here", or "don't fix what hasn't been broken". Sure, and You can use that useless back-test to even persuade Yourself and future investors that this thing will keep going forever. Reality is this - it's a ticking time bomb, and none has any clue on time when it will go off. You can play around this all You want, it doesn't change the situation. The real question is cyclicality till next point of danger, to which we don't have a precise answer. Blow-up should come in the range of next 3-50 months, but next situation of ~40-45% DD? - No clue, could be way sooner than that.
There are glaring similarities in the way of how this signal is performing to the Hamster versions in 2019, remember those? - and promotion style is exactly the same. At least, most of You know how that story ended up, this one is heading the same direction.
Can the signal and underlying strategy be improved? - yes, but the current guys have no capacity to facilitate any of the needed changes. We could have helped, but always, as soon as hurtful topics were brought up, someone had some personal nonsense to be thrown at our representative.
Ok, this was the interrogation of the day, that went well, FX SUMO team thinks we behaved better than expected. Or not, don't know, don't care, cheers!