Breaking down a signal generator, Tecnofinanzas and Tecnofinanzas II

Discussion in 'Automated Trading' started by DigitalMD, Dec 24, 2007.

  1. Let's break down a popular and successful signal generator service. Tecnofinanzas. Let's look at just the EURUSD pair.
    Over the last 28 weeks this system had a profit of 3,279 Pips on 842 trades, not bad at all.
    But... they had a winning percentage of only 51.43% meaning it generates a lot of false starts. Tecnofinanza generates a very good early signal, but has a nasty habit of hitting a lot of false starts. They often set their stop loss at more than -100 pips. If you use Tecnofinanza II, it's the same system , but seems to generate 4 almost identical orders within seconds of each other. This appears to have the sole purpose of costing the customer extra commissions rather than some smart scheme to add orders if the trades are going the right direction because they always open at the same time and close at the same time as far as I can tell. I'd rather control my risk myself by setting the number of lots in a single trade than letting the system jack me for extra commissions so I use Tecnofinanza rather than Tecnofinanza II. I use this system in conjunction with other EURUSD signals as a tool for early indications. Can I beat Tecnofinanzas by using it as a tool rather than a blind auto trade system? Absolutely If I keep an eye on things when the market has no clear direction, I can improve Tecnofinanzas win / loss ratio by exiting trades early if I notice a move. Often Tecnofinanzas will be up on a trade by 20 or 30 pips and let it slide to -30 then close with a loss. If the trends aren’t going my direction and I'm up, I'll close early with a small gain rather than wait for the system to auto send me into a loss.

    So the pros and cons of Tecnofinanza:
    Pros: Generates good early order signals that hit the mark a little over 50% of the time.
    This is an aggressive system, so it's has a higher risk but also a higher gain than some more conservative signals
    The signals are generated manually apparently so there is human logic most times that intervenes when things go sour and closes orders before things really take a plunge, but not always.
    This is an aggressive system, so it's has a higher risk but also a higher gain than some more conservative signals. ( I recommend keeping an eye on the trades when you can because sometimes it easy to spot that the pattern is shifting against you and get out early before the system catches it, this lowers your losses., but beware, if your are too fast to pull the plug you can miss out on gains as well.).
    Generates a lot of losing trades too (48%).
    Too many greater than -100 pip losses for my taste.
    Tecnofinanza II seems to be geared to generate extra identical trades simply to push up commissions, taking money out of your pocket.

    Another note: Many of the auto systems are geared for a particular market direction, meaning they work pretty well if the pair is moving up all the time, but perform poorly if the market takes a different direction for any length of time. Before you use a system for live trading, look at it's history over several months and trade in a demo account for a few weeks till you know the systems strengths and weaknesses. Some systems tout a strong record, but are really nothing but blind luck because the market just happened to go their way for a period.