TWILIGHTTRADE, SAFETY DRAGON AND THEIR “HEIRS”
We are very well aware that the latest update was released just a few days ago, but, hell, the last 48 hours have been extremely painful for most of MQL5's subscriber base - within 48 hours 5 of the 10 (many versions of Twilighttrade and Safety Dragon signals) most subscribed trading signals managed to blow up. What are our takeaways from all of this and how reasonable investors should react on this?
From our perspective, movements in currency markets in the recent month have been extremely wierd and driven by large institutional investors. All the stories surrounding possible problems in Turkey and struggling Brexit talks lead to enormously weak Euro and Pound currencies. These were clearly fundamental reasons, which usually tend to shake the "weak hands" of retail traders. In these types of conditions, trading systems with rather poor money management tend to struggle, and this happened here as well. Not only the most popular trading systems were tested, but one of our own systems went through the fire and, as we see it, passed the ultimate test.
When we compared Twilighttrade trading signal with Safety Dragon signal Mid-August Outlook, we highlighted the possible risks with both of these systems, however, we did not expect for both of these to blow up simultaneously within 48 hours. Did we miss anything? - We honestly don't think so and we still believe that such outcome could not be predicted, given the historical behaviour of both signals. Despite that, we previously mentioned that the recent moves in EURUSD/GBPUSD/USDJPY pairs were associated directly with fundamental reasons, rather than technical analysis. Because of that, these were the perfect conditions when technical trading was struggling and money management became so much more important; unfortunately, both of these signals (as well as their duplicates) didn't pass the ultimate test:
When shit like this breakes lose, it is always interesting to see the reaction of subscribers' base. Some called these guys "scammers" and "frauds" - trust us, they are not; the money management was lacking and these services were not prepared to face this type of adversity, that's it. From the existing most-subscribed trading signals, there are many others who are actually manipulating their results, these guys are the real scammers (again: Mid-August Outlook).
If a trader has closed a losing trade, he is looking for the next possibilities and tries to aggressively regain funds, that's how traders' mind works in 95% of cases. Unfortunately, it seems that most of subscribers are doing the exact same thing -> as these trading signals have generated them losses, they are willing to find next trading signal ASAP that would help them regain their money. At this moment, all analysis is being thrown out of the window, as "panic-mode" is being turned on. There are signal providers that are trying to exploit this situation and that is completely normal, that's just the way this business is behaving. Having that in mind, we are absolutely disgusted by those signal providers who try to "shine" with their short-term success and are behaving like assholes just because their 3-day performance was better than Dragon's or Twilight's, that's just pathetic. A trader known as Mannykinz (known in myfxbook.com) is a great example of such.
This asshole claims to be "serious investor", "hedge fund manager" and what not, yet, 2 weeks ago he was seriously considering joining both Twilight's and Dragon's signals. During the crash of both whales, this guy thrashed both of them and promoted his service. Usually, nobody would give a sht, but as "panic-mode" for most of whales' subscribers base has been on, some actually decided to join him. For those who are still doubtful, we would strongly advise to stay away from his services. Yes, during the crash of the whales, he correctly predicted the movement in the market, however, does this short-term coinflip validates everything he is stating to be? Let's have a deeper look.
Before we look at this shit's services, we must remind You why the 2 great whales failed. One based her trades on an EA, the other traded manually; what unites these guys is that both of them made manual interventions, hedging, in order to keep their risks in check. Based on this, one can argue that if risk management, similarly to trading system, had been automatized, these guys would have managed to survive the storm.
So what do we know about this asshole? - Well, as we stated publicly, he was stupid enough to share the backtest results of the EA that he is using on day-to-day trading:
All 3 of these tests display complete garbage growth/drawdown ratios; in addition to that, maximum drawdown is enormously high, close to account's blow-up. Obviously, this faker has no idea how to even optimize his Godamn trading EA, what else can be said here? - it get's better... Similarly to Dragon and Twilight, this guy is opening manual trades as well - it just happens that his 2 major calls (on EURUSD and GBPJPY) were correct, while Dragon's or Twilight's were not. That's it - 2 manual calls and underlying garbage EA, which has not even been optimized. Is it enough to convince some of the desperate subscribers to join him? - Obviously, very smart done by You, guys.:) Actually, this is worse version of Twilight - shady EA covered by some manual actions in hope to cover the whole shit up. And boyz - 2 calls should not be enough to call him much better manual trader than Twilight was, keep that in mind.:) Don't get us wrong - there are others who are promoting their services as well, but stupidity and audacity of this asshole is truly astonishing.
How about our own trading signals and their performances? Well, there are 2 trading signals and 2 completely different stories:
Millionaire Signal has managed to survive this period without dramatics - just safe ride up with controlled risks. Does it mean that the signal will never face diversity and higher level of drawdown? - No, it does not mean that, publicly available backtests are clear proof of that; however, we feel that we have done enough to prepare ourselves (and our possible subscribers) for such cases. We are constantly exploring new trading strategies, which then could be merged with existing ones, ensuring smoother ride. Just today we updated signal's description, by adding a new strategy (Millionare Signal). For those who are looking for potential ways to diversify their income, we encourage to evaluate and test our performance https://www.mql5.com/en/signals/446507. Even for a demo account, even for a month - test it and give us Your thoughts and feedback, that is always invaluable.
FX Sumo Steady has gone through some serious problems, caused by this recent fall in both GBPUSD and EURUSD. As we stated previously, these moves downwards were rather fundamental, than technical, so the money management of our signal was put at test. At the worst moment our drawdown reached 57% https://www.mql5.com/en/signals/413212 and that's very high level, especially knowing that the signal is fairly new. These 57% were a direct result of long grid trades in both EURUSD and GBPUSD pairs, where first buy entry in EURUSD was 1000 pips in loss, while first buy entry in GBPUSD was 700 pips in loss. We are comforting ourselves with an idea that our money management worked out - there are very few grid type systems that can survive after such dramatic movement against them (Dragon and Twilight are clear examples of that, where a few hundred pips were enough to wash them out completely). Obviously, it will take time to regain somewhat reasonable growth/drawdown ratio, however, we feel that this strategy and it's exceptional money management has proven to be reliable. Despite that, 57% is worrisome and we are actively working on ways to ensure that this never happens again.
That's all from our side. If You have any suggestions or You disagree with some of the ideas, feel free to leave Your comment below!
Best of luck,