Million Dollar Pips "MDP" (clickable link to vendor page) PART 1 OF 2
In this thread, I will be reviewing the infamous Million Dollar Pips. Oh how this EA exploded on the scene and caused much controversy in those that traded it. Debates and hundreds of pages of discussion are contained within almost every major review site you will see. This one made a lot of noise. There are essentially two camps: The first is those who made money with it and they made A LOT! The second group are people who either lost a bunch of money or broke even. The first group usually keeps to themselves and the second group is very vocal. I was fortunate enough to be in the first group and the headline is not a mistake, I made a 198% using the EUR version of the EA!!! Huge! I have taken part in much discussion about this EA and have seen almost every issue related to its operation. This EA tends to creates a lot of attention because of the way it trades. It is sometimes like a sleeping giant. It won't trade for a week and then all of a sudden take 50 trades in minutes!! I know it sounds like an insane way to trade, but the more you find out about it, the more method there is to the madness; and as long as you follow the rules, and I mean ACTUALLY FOLLOW some rules, this EA can make a boatload! We will get to all that later but let's see what this controversial EA is all about first.
What is Million Dollar Pips EA??
Million Dollar Pips also known as "MDP" is an Expert advisor for the forex market. Expert advisors known as "EAs" are programs one can use to take trades automatically following a set of rules. This product was created by a gentleman by the name of William Morrison. Million Dollar Pips trades what's known as "volatility expansion" or in simpler terms: price spikes. When a huge amount of volatility is created, usually around news, price can fluctuate very wildly and Million Dollar Pips attempts to take advantage of this. (In my early days of trading, I saw price start to run quickly up and would attempt to catch the move by going in the same direction. No sooner did I do that, it always seemed to reverse and go quickly the other direction and I would have to close out for a loss!!) Usually when there is high volatility, price tends to swing in both directions quickly and it can be very hard to "have your finger on the trigger" ready to make a trade when you're not really sure when a good spike is going to happen. Then, you would have to pay very close attention to when it started to turn, THEN you'd place the order (assuming you could click fast enough to get it executed at a decent price). After that, you'd have to set a very tight trailing stop and try to figure out a t/p. This all in a matter of a few seconds. Sound tough?? YUP! Here is a GREAT example of how and EA can COMPLIMENT a trading strategy. You can't pull this trading off well even under the best conditions (not to mention literally staring at the screen for hours and hours waiting for a 2-second opportunity), so let a program do it for you!! MDP comes available to trade either the Eur/Usd, the Gbp/Usd or the Jpy/Usd. You need a separate license for each pair. The first license is available for $99.00. After the first license purchase, additional licenses are only $77.00. I recommend ONLY using the EUR/USD Version!!!!! I cannot stress this enough. We will get to the reasons later. From my first experience with this product I realized that this is NOT a casual EA for traders just learning the ins and outs of the market. Let me explain:
Risk and Risk Settings: Ok, it is VERY easy to adjust the risk settings wrong and EASILY blow 30% or more of your account in a matter of minutes. You have several risk settings that all work in harmony together and if you mess up a couple of them, there is a dramatic impact in how much risk you're taking. To the more experienced trader, this will be seen as a wonderful thing since you can tailor the EA to your risk tolerance and broker. It is also a little hard to truly calculate true risk because it essentially plays the market as long as the conditions are right and can essentially take an unlimited number of trades within a short amount of time. It is what makes it risky that makes it profitable though and harnessing the power of this EA carefully can make it a very, very sweet weapon in your arsenal.
Broker Sensitivity: I cannot stress this following point enough: YOU MUST USE THE RIGHT BROKER!!!!! The correct broker is ESSENTIAL!! This EA only works under certain conditions profitably and the RIGHT BROKER makes all the difference. Did I mention you need the correct broker to use this EA?? Ok, so what's the right broker then?? My humble apologies but I cannot share which broker to use. I can only tell you the conditions in which your broker must perform in order to make this profitable from my experience. The broker I used last year has kicked me for being a US client and out of respect for all the people that trade MDP there, I can't tell you the name. When I used to share my broker information in forums, I used to get emails from people asking me not to share that information (and some were quite angry). The reason is that when MDP trades, it floods the broker with requests to open trades, and modify trades. It can open up many trades all at once and modify them all, constantly. It does so very quickly and in HUGE volume. If too many people trade MDP with the same broker, performance suffers. This brings me to my next point. What are we looking for in a broker?
- STP/ECN conditions. Not just called "stp/ecn" conditions. You CANNOT use a market-making broker for MDP. Period. Your broker must only be the middle-man in order processing, NOT the counter-party in the trade. They will find out how you are fleecing their trades and make you lose through many methods.
- Execution: This is HUGELY important. Remember, spikes move quickly back and you need to get into the top or close to the top of the reversal to make money. A difference of a second can mean the difference between 20% equity gain and 10% loss. I recommend opening trade execution of NO MORE than 1000-1500ms and a modify time of 500ms or LESS. I have heard of 2000-4000ms executions working, but was not my experience I saw from people that discussed this (I have followed one thread more than 600 pages!).
- Low Spread: Very important. If you are not getting average spreads less than 1.3 pips (I wouldn't trade on anything more than a broker (commission based) that gives me more than 1) on the EUR during strong volume, you cannot use this product. Period. If you are using a non-commission broker then that number becomes less than 2.0.
- Price Feed Stability: There is no number to put to this but you cannot use a broker that freezes up or disconnects during high-volume and high-volatility periods. Your broker must use good servers that don't get overloaded during volatility.
Complex Settings: This goes along with risk settings but not purely. There are a few settings that need to be tweaked to make sure you work in harmony with your broker. I will be discussing these in detail in my post later this week that deals with the settings thread for MDP. Marc will also be setting his live, test account to my settings and we will have two different accounts and brokers to make comparisons with. That way we can see how live conditions at two different brokers can affect the results.
Trade Frequency: Like I mentioned before, this EA doesn't trade all the time, but when it does, it tends to place a lot of orders. For many traders at the beginning of their adventure, they want action! Also, it is difficult to calibrate settings on program that you don't really know when it's going to trade. Are your settings wrong and that's why it's not trading?? Is my broker doing something funny?? Oh, well, I better "loosen" up the settings and make it more aggressive so I can see some trades!! BOOM, account vaporized by 30% in minutes. Then the immediate reaction is "this product is a SCAM!! How could I lose so much??" I will tell you right now, MDP is NOT, and I repeat, is NOT a scam. This software should sell for much more than it does. But settings matter!! And one cannot get dissapointed if it doesn't trade for a week or two. If you have it set right, then whenever it does trade, it USUALLY more than makes up for lost time. But that takes patience to appreciate and it also takes time to get it tuned right because you have to wait for several sets of trades to take place to see the effect.
So now that you've seen what we need to be careful for, we will move on to specifically what to expect from trades and why it made the portolio in pt. 2 of the review tomorrow. Heres the link to the vendors page if you wish to check out their claims: Million Dollar Pips Forex Robot