MQL5 Forex Signals Review: Red Twilight

Digital Derivatives MarketsMarket Education

MQl5 Automated Forex Signals

More and more traders are leaning towards automated forex signals. One may open a trading account with any forex broker that provides the MetaTrader platform (MT4 and MT5) and benefit from the signals.

Since we launched in 2014 we have warned that automated trading comes with great risks. Aside technical glitches with the algorithm that copies the trades the psychological state of the trader is unknown. There may be incidents where the trader is emotionally disturbed any may reflect in irrational decisions in the market.

As opposed to our prior review on various signal providers we would like to take a recent example from mql5 forex signals.

Twilight Trade Signals

Twilight trade signal was a popular strategy to copy until the trader lost control in the market. Please click on the screenshot to enlarge:

MQL5 Forex Signals Review: Red Twilight

MQL5 Twilight Forex Signals

source: MQL5

The trader behind the system in Mql5 provided his forex signals to the community for approximately one year (50 weeks). The first note is that to copy a certain system a 2-year performance is required.

The reason why a 2-year performance is required is because one may have a decent year, which may not act a firm signal that it is a strategy that is able to withstand certain market conditions.

Every strategy is likely to under-perform under certain market conditions. If you do not see it in the first year you are likely to witness it in the second year. The trader will require to adjust to these conditions and only then the true skills of the trader are revealed.

Twilight Trade Signals Drawdown

Please click on the screenshot to enlarge:

MQL5 Twilight Signals Drawdown

MQL5 Twilight Signals Drawdown

The trader reached a drawdown of over 90%. The trader has an account with a broker that offers 500:1 leverage. We should say that many brokers stopped offering 500:1 leverage,

EU regulations reduced the leverage for forex trading to less than 100:1. The majority of brokers however do offer between 100:1 to 200:1. With that said, exercising such leverage often means significant gains versus significant losses (over 10%).

It means that many of the subscribers lost their invested capital, the stop out level is often around 20%. Meaning, if the account is in a loss of 80% all open trades will close immediately. From our understanding the total capital that was following the signal provider exceed USD 2 million.

The Twilight trader is likely to have lost control due to 2 reasons. Either he was commissioned from the spread, he may have decided he wishes to increase his income and executed multiple trades. If the trader is paid from the spread it is not tied to the success of the position, only its execution.

The second possible reason is the pressure to outperform. He could not accept the possibility he may have misread the market. ‘Pumping’ more trades in the same direction as the losing position is often a desperate act of the trader to recover losses unless it is part of the strategy and is exercised with minimal leverage.

The trader initiated multiple trades in the same direction, a behavior that we assume was not seen in the past. If we are not mistaken it was over 50 positions.

Below are some of the reviews that were posted by the subscribers, click on the screenshots to enlarge:

Twilight Trade Signals Reviews I

MQL5 Twilight Signals Reviews Part I

MQL5 Twilight Signals Reviews Part I

Twilight Trade Signals Reviews II

MQL5 Twilight Signals Reviews Part II

MQL5 Twilight Signals Reviews Part II

Automated forex signals are entangled with risks. We oppose automated signals regardless of the ‘safety’ measures that may be provided. Having full control over the execution of the signals is essential.

The forex signals we provide are not automated and manually executed, thus preventing a scenario that recently occurred in mql5. The number of open trades is kept small, all trades have a reasonable stop and we do incur losses when required as evident from the signals performance.

We do not float in an aimless drawdown as we are not deterred by losses. If a trade under-performs we will intervene and begin liquidating the position. In addition to the above we provide the trading strategy for every forex signal for maximal transparency and reliability.

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MQL5 Forex Signals Review: Red Twilight

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MQL5 Forex Signals Review: Red Twilight


Last Updated on December 31, 2019