This is a robot coded by Steve Hopwood on Forex Factory, which plots highs and lows on a chart, and opens orders when the price looks to be bouncing off them. Essentially it's a support and resistance robot.
It was the first robot I had any success with, and for a while, inspired by positive comments in the forum thread, I ran it on a live account.
At the beginning of 2011, it was earning approximately $300 a week, in real money. I was quite excited.
But then there was an earth quake in Japan, and several days later several of the worlds central banks intervened in the currency markets, creating a massive spike and fluctuations in the Yen, and I lost a whole lot of money.
I learned several things from this experience. First - I didn't know what I was doing. Second - despite thinking I wasn't over-leveraged, I was over-leveraged. And third - this robot was using a really dangerous strategy.
Probably could add two more points here - don't use robots and don't trust anything you read in forum posts!
It seems obvious now, but at the time - not so much.
These lessons were going to be learned eventually, so I guess I'm happy this occurred earlier rather than later.
Sigh. All that money. Gone, within hours. While I slept peacefully.
After the Japan incident (it hurts to even think about, let alone type onto the screen), The Beast acquired a margin filter, where it wouldn't open any new trades if the margin balance on your account fell below a certain level (I shamelessly copied this code and now use it in all my robots).
While the fault was entirely mine for over-leveraging and trusting a robot, this filter probably would have saved about half the money that I lost that night.
The Beast also did not use a stop-loss. Mr Hopwood was of the opinion they were no good, and for a while, I agreed.
But when a bounce didn't occur off the lines The Beast had plotted, the order would just continue on it's merry way, creating various amounts of draw-down. The idea was to "just leave it and maybe it will come back eventually".
Many times it did. Sometimes it took months, but often it did.
So, the strategy of The Beast was to trade against the trend, and use no stop-loss. Basically the worst strategy ever.
I remember there being a strong trend in GBPCHF for a while, and The Beast continuously placed trades on the wrong side of the trend, and the draw-down just kept getting bigger and bigger. This was pretty annoying. Sometimes I could off-set these losses with profit made from other currency pairs. The Beast really works best in ranging markets.
Despite it's flaws, The Beast was the single biggest learning experience in Forex I've had, and ever hope to have. No amount of reading about Forex could substitute for the knowledge gained from using this robot.
The Beast inspired me to code a series of hedging robots (which worked until they didn't). They also used no stop-loss and also went into huge amounts of draw-down, eventually causing margin calls (the margin filter only prolonged the misery).
After those also failed, I decided to give up unless I could code something that worked with a stop-loss.
Ironically, it was the dodgy MetaTrader 4 history data that kept me going, as I suddenly found I couldn't code a robot which failed, stop-loss or not.
Luckily I (seemingly) learned enough from these designs that after finally figuring out just how flawed the history data was I still had some designs which seemed to make a profit, despite a stop-loss and being back-tested with history data acquired from different sources.
How bad was this history data I keep going on about? Bad. One simple robot, which opened an order if the open price was higher than the last bars closing price, using a 5 pip stop-loss, made over one hundred million dollars over a two year period (in back-tests). But only until about June 2011, when it started losing (I assumed my history data was more correct from this period), and only on the EURUSD.
No one has posted to The Beasts' forum lately, so I assume that no one is using it anymore. Steve Hopwood has started his own Forex site, and continues programming robots which don't seem to work and talking enthusiastically about them.
While I wish things had turned out differently, Mr. Hopwood and his Beast form the foundation of a large chunk of my Forex knowledge. I wish him the beast.
