As part of my ongoing set of reviews in Project 10, I thought I would have a look at FAP Turbo. FAP Turbo is one of the latest in a series of heavily hyped expert advisors to hit the market. In a previous review, I looked at its predecessor product Forex Auto Pilot System (FAPS), and in this review I will unpack the genesis of FAPS.
Word of Caution:
This is a preliminary view of FAP Turbo. 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
The makers of FAP Turbo claim to have turned $370 into $7300 in 2 months, $2500 into $8700 in 45 days and $5100 into $25100 in 30 days. With claims like that it is worth a deeper look.
Unlike most commercial expert advisors, FAP Turbo does not make huge claims on the basis of a back test result about how it is a money making machine which will funnel money out of the market while you sleep and will enable you to buy lifestyle items of the rich and famous like fast cars, mansions and yachts. Most of the claims revolve around their published performance in forward testing. This is somewhat of a refreshing relief.
What Do You Get For The Money?
At the time of writing this article for $149 US you get:
- The FAP Turbo MT4 Expert Advisor (deployed as a precompiled mql file (no source) and as a DLL). FAP Turbo is actually 2 systems in one EA. It consists of a refined version of the previous FAPS strategy for trading the EUR/USD and a new trading system for scalping the crosses (EUR/GBP, EUR/CHF, etc) ;
- A 64 Page PDF manual; and
- Access to an online forum for support
The website claims that in the future the price may rise to $349 US (per month?). I don't know if that is the case or not, but it feels like a bit of a high pressure sales tactic to me.
As far as I understand FAP Turbo can be used on an unlimited number of demo accounts and a single live trading account.
FAP Turbo is updated on a monthly basis, so you will need to download it regularly to ensure you are using the latest version.
Refund Policy
As this product is sold via clickbank, there is a 60 refund policy. I have not tried to get a refund myself for this product. but I do know that those who have tried to get a refund on similar products have had more luck getting the refund directly from Clickbank, than from the providers of the software themselves.
Who Wrote It?
If you read the FAP Turbo website, the story is that Marcus Leary (the creator of FAPS), laid out a challenge with his FAPS system, which was that he was willing to provide access to the source code for FAPS (under a non-disclosure agreement) if you can demonstrate that you are able to improve upon the original FAPS. If you did make a major improvement, he would then let you keep the source and then he may consider marketing it and cut you in. Apparently a team of three guys rose to the challenge:
- Steve Carletti (lead developer of FAP Turbo and a professional programmer)
- Mike (a wiz with "complex numbers" and old university buddy of Steve's)
- Ulrich (an open source programmer and old university of Steve's)
Out of all of them, Steve and Mike seems to be quite active on the support forums.
Support
FAP Turbo comes with a reasonably good manual compared to other expert advisors. The manual still does not top pipboxer's manual, but it is still pretty reasonable. There are also some online video tutorials which show you how to set up and install FAP Turbo. In terms of actual support, there are a number of alternatives open to you, including: a support number, an email address and a support forum that comes with FAP Turbo.
If you read the forex peace army website, the phone number just leads to an answering machine, which is full and cannot accept any more messages, so don't waste your time there. I haven't tried the email address, but if it is like the FAPS one, my best guess is they are flooded and they probably wont answer your question properly. The FAP Turbo forum seems to be very active, so if you have any questions about FAP Turbo, I recommend you start there with your questions.
If you want to talk to other FAP Turbo users outside the FAP Turbo forums, you can seek support through the FAP Winner website (not free) and the Forex Auto Pilot Forum website (free). Support via FAP Winner can be heavily moderated, which is good (keeps the trolls away) and bad (the forum is biased). Unless you want to discuss how FAP Turbo should be used with FAPTS, I would recommend you try the Forex Auto Pilot Forum, as the moderation is not as heavy handed.
Uniqueness
The FAP Turbo scalper may not be unique. If you read the forexautopilot forums, there is a claim that FAP Turbo scalper may be based on FXGTC's Xtreme Product. They do look very similar, so it is entirely likely there is a connection between the two. According to the FXGTC website it was in development for 9 months and was first released on the 20th of October. This is so close for comfort to the release of FAP Turbo, which was in November 2008, who knows what the relationship is.
FXGTC Xtreme is significantly more expensive that FAP Turbo and sells at $799.99 US. Unlike FAP Turbo, when you buy FXGTC Xtreme, it comes with source code. While FXGTC Xtreme is similar to FAP Turbo, it has some differences around which pairs they trade and the time zone it trades in. There are probably other differences, but I don't want to shell out the $799 to find out. If you have tried both I would like to hear from you.
How Does FAP Turbo Work
Like all EAs that I have reviewed so far, FAP Turbo 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 they documentation, there is little clue as to how it works, but comments on forums provides more insight.
As mentioned above FAP Turbo consists of the original FAP strategy (the "long term" strategy) and the scalper (the "short" term strategy). I have already gone through the original FAPS system in some detail (see link here), so I won't waste time covering it here. I will just go over the scalper here. There are some differences between FAPS and FAPS Turbo. These seem to be improvements around the kinds of parameters you can set and the availability of a built in hedger and other additional features to help manage trades.
Now lets unpack the FAP Turbo scalper.
Markets (the scalper)
The FAP Turbo scalper is designed to trade EUR/GBP, EUR/CHF, GBP/CHF and USD/CAD on a 15 minute chart. Internal logic prohibits you from trying this system on other pairs or time frames.
Entries (the scalper)
Even though the short term strategy in the manual is described as a "scalping strategy", according to the manual the scalper is not a traditional scaler which does high volume of small trades around the spread, instead it aims to make 1 - 5 trades per day using a tight profit target of 6 to 15 pips.
The manual does not describe how the system decides to enter the market, but from what I can tell by watching it trade, inferring information from the settings and forum discussions, the entries are filtered as follows:
- Look for entries between 2100 GMT to about 0200 GMT (i.e. from the close of the new york session and into the asian session)
- If the brokers spread is too high, e.g. 2-4 pips for the EUR/GBP pair and 5 - 6 pips for the other pairs, the system will not make an entry.
- If the day has been too volatile do not enter today (controlled by the scalper_simple_height_filter setting)
- Only open trades in the direction of the trend (determined by a moving average - which is settable by the user)
There is another setting based on using a filter based on "custom levels", but I don't know what they are.
As I mentioned above, the documentation does not provide much information about how it actually works. My best guess is the edge in FAP Turbo relies on a relatively well known feature of the forex market, which is if a trend is established by US traders in the afternoon of the New York session, Japanese traders tend to carry it on in the Asian session. The slower moving nature of the pairs used by FAP Turbo means that the scalping trades are less likely to be stopped out by a sudden market movement, thereby enhancing the edge described above.
The description of FXGTC Xtreme may be useful useful here, because if it is the same system as FAP Turbo, then it provides insight into how it actually works:
"EURGBP/EURCHF Xtreme executes on the premise of finding the optimal channel on 15min timeframe. The optimal channel is identified by a dll file saved in your experts folder alongside the EA. The Orders are generated from the confidence channel on the chart. Unlike most scalpers, TakeProfit and StopLoss are not fixed and depend on the width of the channel and angle of slope.
The dll plug-in performs complex calculations of channel with the least and decreasing mean-square deviation within the channel. This channel then defines the most likely corridor of price movement. The system only operates in the most suitable trade hours for each pair on historical research of dependence of volatility market at a particular time. "
Exits (the scalper)
Again there is no real documentation about how the system exits trades. From what I have seen discussed on forums there are three major exit conditions used in the FAP Turbo scalper:
- A profit target of 6 to 15 pips is used (the target is based on the pair used and potentially some other property such as the recent price range movements);
- A stop loss is used which varies between 53 and 112 pips (the target is based on the pair used and potentially some other property such as the recent price range movements); and
- I think there is also a time based stop loss which will exit trades posting a small loss after a certain amount of time (but I am not sure about this one)
The system comes with a feature to actually hide the read stop loss and profit target from the broker. The system will actually trade with a much bigger fake stop and fake target set as part of the order, but the internal logic of the system will still use the exits described above.
Position Sizing (the scalper)
The user has the option of setting the position size manually, but they can also rely on setting a risk factor variable (called the "Lots Risk Reductor (LRR)") and then let the system calculate the lots automatically for them.
The auto lot feature simply calculates the number lots based on the LRR as a percentage of the free margin left. For example, if you have $10,000 left as part of the margin available and the LRR is set to 5%, then the system will open a $500 position. The system contains some logic then to calculate how many lots that is based on the type of account. Note that this is not the same as risking 5% of your account on a trade as the system does not use the width of the stop loss to calculate the size of the trade. So, if a trade fails, you can loose significantly more than 5%.
In terms of recommended settings, Charles from FAP Winner, has provided some recommendations. He recommends that:
- For conservative traders, you should trade only 2 pairs with the EUR/GBP LRR = 20 and the EUR/CHF LRR = 10
- For traders with a moderate risk tolerance, you should trade only 2 pairs with the EUR/GBP LRR = 30 and the EUR/CHF LRR = 20
- For traders with a high risk tolerance, you should trade 3 pairs with the EUR/GBP LRR = 40, EUR/CHF LRR = 20 and GBP/CHF LRR = 3
Note that, you are trading a leveraged market, and even the conservative settings can blow up your account in some conditions. If you want genuinely conservative settings, you may want to lower the LRR to 1.5. If you do this of course, you won't see the spectacular profits either.
Performance
As mentioned above, the makers claim to have turned $370 into $7300 in 2 months, $2500 into $8700 in 45 days and $5100 into $25100 in 30 days. There are others out there who have also published their live statements, which achieve similar results. For example Mark over at ForexTester.com, traded $5000 up to $35000 over the period of a month (see statement here). However, not everyones results are the same. For example, FX Robot Man, traded $10 000 to $12 000 in a few weeks and he then proceeded to loose all his profits and is now only $873 up (see statement here). I have traded it on a demo account myself and over the period of a month it traded $5000 up to $8000.
In analyzing the statements, the key differences come from a number of sources:
- The amount of leverage used. The LRR can range anywhere from 5 to 40. This is why some accounts return significantly more than others.
- The long term strategy on the EUR/USD pair, which is based on the original FAPS, is profitable in trending markets, but if the market reverses, you can loose a significant chunk of your account. For example, in FX Robot Man's account, this is exactly what happened
- Trading the short term scalper has varied results between pairs. Trading the USD/CAD yields the poorest results (even a loss in some cases) and the best performance can be seen on the EUR/GBP pair
It seems that if you want the best results out of FAP Turbo, trading the EUR/GBP pair is the most productive during the period the FAP Turbo was released. However, I wonder how long this will last as this result seems to be connected to the extreme trend on the EUR/GBP pair over the test period
EUR/GBP Daily Chart
If this trend breaks down, it will be interesting to see if FAP Turbo will return the same results or if it will have lack luster performance like it has on the USD/CAD pair.
Weaknesses
If you read the documentation, the acknowledged weaknesses of the system are as follows
"Scalper strategy does not work well on crazy market conditions. When the currency pair has an unusually strong trend or very high volatility (It is recommended to avoid trading on such days. We tried our best to filter out such days automatically but still do not recommend trading on high volatility days.)"
I am not sure I understand why this is the case, because so much of how the system actually trades is not transparent, so we will need to take their word on it. However, I have traded FAP Turbo through one of the biggest trends I have seen on the EUR/GBP in a while, and it seemed to perform ok. So I am not sure how much stock to put in the thing about not trading it during unusually strong trends. It is probably more sensitive to market spikes and sudden retracements, then it is to solid well defined trends.
In addition to this kind of weaknesses, there are a number of other weaknesses to be careful of. In particular:
- As the entry has a filter based on spread, if the broker's spread is too high, FAP Turbo will not make any entries. This is not a bad thing, as it just costs you profits, rather than making a loss;
- The FAP Turbo scalping strategy relies on fixed profit targets and stops. If your broker is prone to misquotes (something that can be quite common on the crosses traded by FAP Turbo), then there is a real risk your profit target and stops will not be honored. This could leave you with a nasty hanging position if you are unlucky; and
- As the strategy relies on wide stops (relative to the profit target), if you adopt a moderate to high Lots Risk Reductor, you could end up with a major loss if the stop is actually hit. Therefore you need to be careful with the LRR setting in choppy markets.
- As mentioned in the section on performance, the performance of the scalper seems to be related to wether or not the market is trending or not
In retrospect, if the system uses the same logic as FXGTC Xtreme these weakness actually make a hell of a lot of sense as the entry is based on linear regression to identify a tradable channel. Linear regression methods work well in a trending market, but the moment the market gets noisy, systems based on linear regression don't work so well.
How Best To Trade It
Trading is risky business and if you do decide to trade FAP Turbo, you need to be willing to accept the risk of potentially loosing everything in your account. Therefore, you should only trade FAP Turbo with money you can afford to loose. Given the significant chance of loosing money, FAP Turbo is not for everyone
Now that I have established that, if you do decide to trade with FAP Turbo, to get the most out of FAP Turbo there are two things to keep in mind: broker selection and adjust your risk profile to match market sentiment.
Adjusting your risk profile to match Market Sentiment
In order to maximize profits and decrease the risk you can play with Lot Risk Reductor (LRR) parameter depending on market situations. Mike actually does this to manage to publicly accessible accounts displayed on the FAP Turbo sales page. Generally, Mike will use the moderate to aggressive settings for trading if the market has a stable trend. However, when the markets become more crazy and volatile or during market holidays, Mark tends to use the more conservative settings or stands aside from trading all together.
Broker Selection
Broker selection is key to any scalping strategy and is therefore is key to FAP Turbo. As different brokers use different spreads, you will get very different mileage out of FAP Turbo on different brokers as the spread is part of the entry filters. If the broker's spread is too high, FAP Turbo will not make any entries. Similarly, scalping relies on fixed profit targets and stops. If your broker is prone to misquotes (something that can be quite common on the crosses traded by FAP Turbo), then there is a real risk your profit target and stops will not be honored. Also, scalping EA's are not particularly well received by dealing desk brokers due to their 90% plus strike rate and the ability to make gains rapidly against the fixed low spreads offered by these brokers. Therefore you may want to consider using a non-dealing desk broker.
Given these issues, it is worth your time to read around the forums and see which non-dealing desk brokers are not prone to misquotes and don't tend to increase their spread during the hours FAP Turbo trades.
According to the documentation, they recommend FXDD, Interbank FX, Alpari, FXCM and FX Pro. The last time I checked on the forums they tend to steer clear of Alpari as they are more prone to misquotes and Interbank FX widens their spread during the hours that FAP Turbo trades (this is not because of FAP Turbo - but because of recent market volatility). That leaves FXDD, FXCM and FX Pro. FX Pro seems to offer the best spreads, so it is quite popular on the forums.
Other things to think about
In addition to the above, some other things you might think about to improve the performance include:
- Some traders who FAP Turbo actually don't trade the long term strategy any more and just focus on the scalper as it is more profitable and lower risk. You don't need to be that radical. The longer term strategy works well in a trending EUR/USD market, so you should consider just switching it on then.
- Keep an eye on the forexautopilotforum, as they have done a reasonable amount of work on back testing to find the best settings and sometime some useful suggestions will come up there.
Parting Thoughts
I am not going to recommend you buy FAP Turbo. That decision is yours and yours alone. If you do decide to buy it, make sure you do your due diligence on it before you buy it and make sure you do adequate testing on it before committing any of your hard earned trading capital on it.
Out of the many expert advisors I have reviewed, I must admit this is one of the better ones. If you are looking at automated trading, you may want to spend some time investigating this one.
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