Forex Expert Advisors : Don Steinitz Directional Robot, an Unbiased Review

Today I will end the request made by a newsletter subscriber with the review of an automated trading system sold by Don Steinitz called Directional Robot. This trading system uses a smoothed multi time frame Heiken Ashi in order to get in and out of the market. Today’s post will focus on the evaluation of this system. In particular I will focus on the evaluation of the author’s claims against the evidence provided on the website and then I will give my opinion about the expert’s like hood of long term profitability and whether or not it is worth buying and testing.

Looking at this expert’s website it seems like the others found on Don Steinitz web page. There is a brief description of the system with performance links, screen shots and detailed information sources. Since the author makes no claims on the product’s web page about its profitability I assume that he wants us to go through the evidence and judge the profitability of the system by ourselves. What we find is nothing but a joke.

What Don Steinitz calls performance data is nothing but worthless information. There are a ton of backtests on several currency pairs which are very BADLY done with PLENTY of mismatch errors which make the modeling quality n/a, that is, the backtests showed by Don Steinitz of this directional robot system are totally worthless since the amount of mismatch errors is huge and does generate very significant differences with actual trading (or accurate backtesting for that matter). More over, there is no way in which we could even now if the backtests could be reliable (if done correctly) because there is no live trading evidence of this expert advisor. As I have always said, it is vital to evaluate back/live testing consistency on ALL commercial experts as we have to discard that the seller used hindsight or exploited backtesting errors in any conceivable way.

I certainly don’t know how Don Steinitz pretends to prove that his systems are profitable in the long term when there is such a lack of evidence on all of his products. Why isn’t his backtesting done in an accurate fashion ? Why are the backtesting periods so reduced ? Why doesn’t he backtest the systems from 2000 to present on the pairs where this is possible ? I am obviously terribly suspicious of any system that seems to intentionally neglect the presence of some obvious information. Why doesn’t Don Steinitz open a 1000 USD live account and place it under myfxbook for third party confirmation and trades it for a long period of time ?

The answer is pretty clear to me. I cannot say that his system is or is not profitable but the burden of proof is not on our live accounts, it is on the EA seller. Since Don Steinitz cannot provide reliable evidence to proof that his trading system can be long term profitable and preserve equity I have to consider it NOT worth buying or testing. If he puts up 10 year backtests with 90% quality (no mismatch errors !) and at least a 3 month long live test on myfxbook with a confirmed track record I will redo this review. Meanwhile, buying this system or any of his other systems is, in my opinion, just like gambling.

If you would like to learn more about my criteria for EA evaluation and how you too can build, design and program your own long term profitable trading systems please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !

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