This review is part of Project 10 which has set out to review 10 commercial forex expert advisers.  Out of all the systems I have reviewed, the subject of this review M5G cyborg, is one of the few expert advisers that is worth a deeper look.

Word of Caution: 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

If you read the M5G Website, the creators claim that their objective was to build an EA that with proper risk management could attain 15-25% a month consistently. They back this up by providing you with a link to their live forward test results. This approach to marketing an EA is refreshing as they are not trying to push you a product on the basis of a back test or hypothetical results.

What Do You Get for The Money?

Compared to other EAs on the market M5G cyborg is more expensive and costs around USD $349. For the money you get a pre-compiled (no source) Metatrader 4 expert advisor. It does not come with anything else. The manual is already publicly available on there website (click here). The EA allows you to trial the system on an unlimited number of demo accounts, but is licensed to a single account. All future upgrades to the EA are provided for free.

Refund Policy

All sales are final for this product and you cannot get a refund. Compared to other EAs sold through places like clickbank this is pretty weak.

Support

All support is provided via email. There is no phone support or discussion forum. I have sent support questions and they do answer them in about a day or so, but to be honest I was never really happy with the quality of the answers I was given. Compared to other EAs on the market, support is quite sub-par.

Who Wrote it?

We don’t know the name of the individual who developed this system. All we know is that someone called Glenn who goes by the handle of “FXGRM” on the forex tsd forums built it.

Is it Unique?

As far as I can see this EA is unique. That does not mean that the EA is unique, it just means I have not seen something similar.

How Does it Work?

Like all EAs that I have reviewed so far, M5G cyborg is a “grey box” system, meaning that the internal logic of how it trades is proprietary, but the user can adjust some of the settings. If you read their documentation, there is little clue as to how it works. If you read the forex tsd forums you will see that the creator of M5G cyborg based on a manual strategy he had traded by hand for a few months. He does not disclose more than that.

Markets

You can trade M5G cyborg on any market your broker supports. However, the creators of the EA recommend you trade the system on a 5 minute chart on the EUR/USD and GBP/USD.

Entries

The entry logic for the M5G cyborg EA is not disclosed. Based on the settings, entries are filtered on a number of properties:

• Day of week filter where trades are only opened between monday and thursday and the system is out of the market on friday
• Time of day filter which by default is set to enter in a 2.5 hour window between 8 PM and 10.30 PM GMT (i.e. the end of the New York session and into the Asian open)
• The spread is lower than 4 pips and the slippage is less than 5 pips (i.e. the market is not experiencing extreme volatility)

In terms of making entry decisions, there are some internal indicators the system seems to use. However, these are not disclosed. Based on the picture on their home page, these could be the MACD, STR and EMA on 5 different bar charts (M1, M5, M15, M30, H1, H4). However, we don’t know for sure as the EA when you trade it does not look like this. From discussions on the forums all we know is the creator feels that modern markets are far too volatile and he recommends placing trades on shorter time frames using shorter indicators.

Exits

The exit logic for M5G cyborg seems to be:

• Take Profit: 30 pips
• Stop Loss: 140 pips
• Time Based Stop: Close positions before the end of the US session (i.e. the system does not hold positions over night)

In addition to this, the system also seems to “average down”, meaning that the system will add to positions if at first they are not successful.  The user can control how far the system will average down.

Position Sizing

Position sizing is calculated as a percentage of the margin available. The recommended level is between 2% and 5%. The danger in this strategy is with the wide stops, you stand to loose far more than 2 – 5% of the account. You will see an example of this below.

Performance

On the M5G website they run a number of different versions of the M5G cyborg with different settings. Their best performer has made 70% over a 2 month period. I have forward tested M5G cyborg on a demo account for 1 month and managed to repeat the result. The results seemed promising, with a over a 70% profit, a profit factor of 4.12, 73% of trades are winners and a maximal drawdown of 8%.

Since the original forward test on a demo account, I funded a small live account with a few hundred dollars to see how it would go.  In the space of a couple of months the system doubled my account.  I have now withdrawn the initial deposit and I am now trading on pure profits alone.

Weaknesses

M5G cyborg is far from risk free. The key weakness in the system is it averages down (i.e. it doubles up on loosing positions) and the stops are relatively wide for the amount of leverage employed. So if you take a loss it will take out a large chunk of your account. If you read the online documentation, their explanation for what triggers these kinds of losses

Q: Can this EA ever lose money? A: Yes. Any EA can lose money. There is always the danger of fast breakouts. This is the downfall of many EA’s. Good Money Management is required at all times in order to reduce the risk.

I have run this system in demo on a non-recommended trading pair (USD/JPY) and it did just this.  The net loss on the account was close to 20%.

How Best to Trade It

Trading is risky business and if you do decide to trade M5G cyborg, you need to be willing to accept the risk of potentially loosing everything in your account.   If you are not comfortable with this level of risk or with averaging down, then you should not trade this system.

Now that I have established that, if you do decide to trade with M5G cyborg, to get the most out of M5G cyborg there are 4 things to keep in mind:

• As this system can loose everything, only trading with money you can afford to loose
  
• Withdrawing profits regularly from your account, so that if you do get a nasty surprise and loose everything in your account, you will have something to show for it.
  
• Use the recommended leverage settings. If the leverage is to high you risk loosing a large chunk of your account as the system starts averaging down.
• Lastly, you should always keep an eye on the M5G website as they change their recommendations for markets to trade and settings from time to time.

Closing Thoughts

I am not going to recommend you buy M5G cyborg. That decision is yours and yours alone. If you do decide to buy it, make sure you do your due diligence on it by looking at other reviews before you buy it and make sure you do adequate testing on it before committing any of your hard earned trading capital on it.

For me I am giving M5G cyborg a chance to see what it can do over the long term with a small account. I think this system is worth a deeper look, but the averaging down nature makes me nervous.

This entry was posted on Friday, April 10th, 2009 at 9:31 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.