(3 votes, average: 3.00 out of 5)

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This is my 9th review and I am getting pretty close to the end of project 10 now. It is getting pretty tiring writing all these reviews. I am looking forward to getting to the end of this project and stop being a slave to the endless stream of EAs that appear on the market every day now. Anyway, enough of my belly aching, in this review I will have a look at pipzu.

Word of Caution: This is a preliminary view of pipzu. It is highly likely that I may have made some mistakes in this review. So please read everything I say with a skeptical mind and form your own opinion. If you see an error or have some suggestions for how to improve the review, please let me know.

Claims

According to the website, in 2008 they made $66,960 in profit with only an 11% drawdown. On a $500 account they claim you can expect to make $25 to $50 per trade and pipzu will trade 1 – 2 times per week. If you have a bigger account, you can expect to make much more. They also claim that while pipzu may not make you a millionaire overnight, out of all the other automated trading systems, they claim:

[pipzu is] the lowest risk EA to date

[We] guarantee you won’t find a safer automated trading system that can bring in as much profit as pipzu can.

The claims are all made on the basis of backtest results. Continuous forward test results on live accounts are not provided.

What Do You Get for the Money?

pipzu is sold for US $99.99 and for the price you get:

• An Metatrader 4 expert advisor (no source)
• 4 page PDF instruction manual

There is also another version of pipzu called pipzu Extrapolated. But this product no longer appears for sale on the pipzu website.

There don’t appear to be any licensing restrictions on how many live or demo accounts you can use pipzu on.

Refund Policy

pipzu is sold through clickbank, which means it has a 60 day money back guarantee. If you require a refund, clickbank are usually very good in ensuring that you receive your money back.

Who Wrote It?

According to the website, pip zu was developed by a team of 7 people:

• Michael and Gary Reden are the originators of the system and developed the trading strategy using their collective 50 years of trading experience;
• Christof Gustav and Yei Yang developed the MT4 EA;
• Mary Samson and Robert Cheung provided further input on the design;
• Brian Anderson is responsible for the marketing of the product; and
• According to clickbank the product is published by Steve Halcovitch

If you read the terms of use, they are based on South African law, so I assume the owners of the system are based there.

Uniqueness

I have not seen any reports of pipzu being copied from another system, so it appears to be unique.

Support

Support for pip zu is very basic. It consists of a 4 page manual which shows you how to set up and install pipzu. Support is also provided via email. There is no forums for support. Compared to other products, support is very substandard.

How does it Work?

Like nearly all expert advisors I have reviewed, pipzu is a grey box system, meaning that the user has some control over the settings, but the logic behind how it actually works is not disclosed to the user. Therefore everything here is based on information I have pieced together from the manual, the settings and watching it trade.

Markets

pipzu is designed to trade the EUR/USD on a 1 hour chart. The EA does not prevent you from trading pipzu on other charts, so it is possible to use it with other pairs.

Entries

According to the website, pipzu uses “State Of The Art Trend Adapting Technology” which pipzu uses to alter the trading strategy based on market conditions. How this actually works is not explained, other than that marketing blurb says it uses a “Next Generation Market Timing Algorithm” which uses as in input days of data.

Probably the only clues are the two settings for the system around “pull back” and “max timing”. I presume the entry system looks for pull backs based on the max timing setting. This is confirmed by the chart. If you look at the chart you will see examples of the system buying dips.

Also as you can see from the above, pipzu averages around 1 – 2 entries per week.

Exits

pipzu seems to use a simple exit strategy:

• 19 pip profit target (user set able)
• 60 pip stop loss (user set able)

There don’t appear to be any other exit strategies.

Position Sizing

pipzu relies on the user setting a fixed lot size to trade with. The manual provides some basic position sizing guidance:

• For accounts less than $2000 use 0.1 to 0.5 lots
• For accounts between $2000 – $5000 use 0.5 to 3.0 lots
• For accounts greater than $10000, use 3.0 to 10.0 lots

It is not clear from the manual if these are intended to be standards lots or mini lots. I assumed they are meant to be standard lots. No other advice on position sizing is provided.

Performance

The pipzu website only provides back testing data to describe the performance of the system. Unfortunately, the owners of the system do not provide access to continuous forward test data for the system using real money. The backtest shows a 300% gain over a 10 month period. The result is not to bad, but the problem with back tests is the person running the back test can show us what they want us to see. For example, by having the luxury of future knowledge, optimizing the settings for historical data, picking the right start and stop date, the system can be set up to show good results. What it does not show us is the good, bad and ugly of the system.

Others online who have traded this system, have reported a range of positive and negative results. In my case, as of the time of writing of this review, I have forward tested pipzu in demo for about a month and a half. Over that time it has made 14 trades, 50% of them have been profitable. However, the draw down has been extreme because winning trades make much less than loosing trades.

Weaknesses

Despite the claim that the system is the lowest risk EA to date, the major weakness is this system is it has a relatively wide stop. This means that if you are stopped out, there is a good chance you will loose a large proportion of your account (depending on how you have set your lot sizes).

How Best to Trade It

Before I answer this question, first remember that forex trading is a highly leveraged market and there is a high risk that if you trade it you will loose everything you put in your trading account. Therefore trading forex is not for everyone, and if you do trade forex, you need to work on the assumption that you can loose everything and therefore you should only commit capital you are prepared to loose. With this in mind, you should be very careful how you set your lot sizes on pipzu, as there is a good risk you can blow your account with it.

Now we have that out of the way, about the only other thing I can say about the best way to trade pipzu is to only trade it during trending markets. The trend adaption technology so far has proven to be a looser in sideways markets.

Closing Thoughts

I am not going to tell you to buy or not buy pipzu. That choice is yours and yours alone. If you are thinking about buying it, make sure you do your due diligence on it and see what other reviews are saying. If you do go ahead and buy it, make sure you demo trade it for a while to get the hang of it before you commit risk capital to it.

As for me, I am not going to the next stage and live trading pipzu as it just didn’t perform for me. I might leave it on demo for a while longer to see if it digs its way out of the hole when the trend returns to the market. I may even ask for a refund.

This entry was posted on Sunday, February 22nd, 2009 at 3:00 pm and is filed under Product Reviews. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.