As you all know the MT4 comes with an inbuilt EA named moving average. I knew this is no good otherwise people would not have been here in TSD.

I backtested this EA for 2006-07 with 90% modelling quality and it gave it 2179 pips LOSS. Only change I made was setting Max Risk at 0.05 instead of 0.01.

My question is if I put this EA into a real account what can be the end result? Better than this or even worse?

Its a known fact that real market ticks are entirely different than demo server, what happens if we manually enter the trades in OPPOSITE direction of what adviced/opened by the EA? The drawdowns will be large sometimes but at the end shall we come out with 2179 pips profit in a year?

I've always thought that of any system, if it loses money just do the opposite and the loss would be your gain shorely

No, the EA would have to lose a lot of money very fast for this to be true.

The reason why most EAs lose is because of transaction fees (the spread). This puts the odds out of you favor to begin with. Flipping the buy/sell parameters won't change a thing. It will still be a loser.

Not necesaraly an ea what about trading manualy, when you think youve got a long set up go short and visa versa you cant tell me that 50, 60, 70 pip down days are down to the spread of 3 pips

Actually,
In some cases doing the opposite would profit. Some times you can run the MA EA as is and profit also. It depends on the market.
most "systems" work well in a trending market but loose in a sideways or choppy market. The hope is that the market trends more than it chops, which isn't always the case.

Some systems work well in choppy, sideways market and get eaten alive in a trending market. See - 10points3.mq4 or your MA EA with reverse settings.

Whether or not the MA will profit in regulor mode or with reverse settings depends on the markets trend or chop.

All you need to do is figure out whether the market is going to trend or range sideways and you can adjust it to switch for both and make a million.

If figuring out whether the market was going to trend or chop was easy everyone would be a millionaire.

make sense?

Fibofan,

Excellent post. Persnally I don't believe creation os any EA is possible which will really deliver in real market conditions all the time. I am a member of this forum for long time and to be frank I havn't yet found an EA which is worth for real accounts.

Nobody knows what the market will do tomorrow.....range or trend. Adjusting your EA as per market changes is a vague term. If you know what is happening there and how to change the settings accordingly, you won't need a robot to assist you.

So we have no option but to rely on history. We just trust that if something has happened earlier it will happen in future also. Here comes my point.

Perhaps the most basic and the first ever indicator developed was moving averages. Had it been profitable to trade only with a moving average, others wouldn't have been created. Am I right? So the fact is trading with only an MA on your chart is not profitable. It is the reverse of Holy Grail.

At this point if anybody want to cross me please come forward.

So..........why trading opposite to what an MA tells will not be profitable? Yes there will be huge drawdowns to the balance sometimes but at the end it will come out as a sure shot winner.

Broker spread? Is it that much important....don't know for sure.

Cheers.

Brocker spread cant come into it like I say its only 2 or 3 pips on a 30, 50, 70 pip win / loss
When you first start to trade you can blow demo accounts in days, so sit someone in the corner thats never traded before and get them to shout there trades and do the opposite, as someone blows 500 pips you would make at least 400 even with the spreads both sides , thats what the dealing desks do apparently isnt it go the opposite to there loseing clients?

It depends on how many trades the system generates, but broker spread does come into play. Also, most lose because of their risk management. Whether it's an EA or someone trading manually, it doesn't make a difference.

Still not understanding why

Like I say someone with bad risk management sat in the room with yourself doing the opposite if hes going to have crap risk management, patience etc just trade the opposite Im not talking of an ea generating signals just someone on full tilt blowing up his account him on a demo oneself on a live account the opposite of - is + right or wrong

Because you are forgetting half the trade. What about the exit? You have have two traders who go long and short at the same time, but they still lose. Why? Because there is a possibility that both of their stop losses will get hit. Either that or they don't take their profit or know where to exit. For every demo account that blows up, there are likely nearly as many that perform well.