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Forex OverDrive EA - Expert Advisor in Forward Test

The Forex OverDrive EA is another Expert Advisor that I've recently put into forward test at MellyForex. If it shows some promise once it's been in test for a month or so, then I'll consider a full review of the EA.

Forex OverDriveThe EA itself is a non-martingale scalper which runs 24/5 on the 5-minute charts of two currency pairs - EURUSD and GBPUSD, and it appears to get its trade signals when about 500 different indicators are all standing up like soldiers and facing the right direction. Hey, 500 might be a slight exaggeration of the number of indicators used by Forex OverDrive, but I'm sure that readers will understand the concept that this EA is being driven by a shedload of different indicators.

Forex OverDrive sets a fixed stop-loss (default setting is 328 pips) and take-profit (default is 25 pips) once it's entered a trade, and it then trails a stop-loss to exit if or when the trade has moved into profit.

A consequence of the EA's high risk/reward ratio is that the EA should enjoy a very high rate of winning trades, and some forward tests on the developer's website suggest that the EA actually wins around 95% of all its trades. The downside of this high risk/reward ratio, however, is that a full stop-loss being hit will wipe out the entire profits of the last umpteen trades. I ran a quick analysis of the developer's forward test, and it suggested that Forex OverDrive's average winning trade is around 14 or 15 pips and its average loss trade is around 260 pips, giving a risk/reward ratio of approximately 18. That same analysis also suggested that the EA should trade around 7 or 8 times each week on both its currency symbols, so it's relatively easy to work out that it's going to take around two or three weeks to recover from one of the big losses.

Interestingly, a deeper analysis of the same forward test suggested that whilst Forex OverDrive seems to have been profitable over the last 18 months or so on the EURUSD pair, where it has been winning around 97% of its trades, it has been loss making on GBPUSD where it has only won around 93% of its trades during the same period. I suspect this is down to the fact that both pairs seem to use the same stop-loss setting expressed as pips, and that the EURGBP cross valuation means that Forex OverDrive's EURUSD stop-loss is, in effect, looser than its GBPUSD stop, leading to a fewer number of full stop-losses being hit.

For my forward test of Forex OverDrive on MellyForex, I'm running the EA on a $5k demo FXCC true ECN account. This account offers raw spreads which are as tight as 0.1 pip, but it charges a 1.0 pip round turn commission on each trade, so I've increased the default take-profit value from 25 pips to 26 pips on both suitable currency symbols to compensate for the commission charges. Ordinarily, I would also reduce the stop-loss setting by 1.0 pip to reflect the commission charges but, seeing as the default SL is 328 pips as mention previously, I decided that an odd pip here would only make a negligible difference to overall performance.

Aside from the take-profit settings, I have set the EA up to risk no more than 4.0% of the account on any single trade.

Forex OverDrive also contains an option on whether or not to trade on Fridays. I've set this to true (ie. It will trade), as I'm not convinced from the developer's forward test that Fridays are a historically worse day than any other day.

Finally, I'm not allowing any slippage whatsoever on the trades.

As with my other robots in test, you can monitor Forex OverDrive's performance at MellyForex by clicking here.

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