Forex Derivative Review

Overview

The Forex Derivative is the product of collaboration between self-proclaimed strategic forex expert and pro forex trader Zack Kolundzic of Quantum Globe, Inc. and a mathematically-savvy technical team. The product operates as an automated Expert Advisor or EA within the popular MetaTrader 4 forex trading platform, and it sells for a moderate price of $97.

The vendor’s website claims that the EA first detects and then adapts its trading strategy to whatever current market conditions are. Apparently, it does this intelligently no matter whether exchange rates are going sideways, swinging, trending, being driven by support and resistance levels, or are highly-volatile for non-technical reasons. The system also uses fairly advanced money management techniques to help protect trading funds, and includes using protective stop losses as part of its trading strategy.

All of that may sound fairly reasonable, but in addition to Forex Derivative, Zack also promotes an e-book online with the rather trite name of “Forex Trading Strategy”. Rather worryingly, the text on the vendor’s website for that product claims that:
"…our forex strategy is so consistent you could set your clock by it. It is as safe as money in the bank. In fact, our testing has shown that the chance of losing all your trading capital is so small as to be almost non-existent."

Just in case you were now thinking of dashing out to buy this e-book, the fact remains that capital put at risk trading forex is never as “safe as money in the bank”. First of all, trading risk is generally far greater than deposit risk. Secondly, putting money on deposit with a non-insured forex broker is generally quite a bit less safe from a credit risk standpoint than putting it with an FDIC-insured bank (for U.S.-based investors, anyway). Just ask some of Refco’s former forex account holders about that!

Furthermore, in terms of its online ratings, Forex Derivative received just over a one-star rating (out of a possible five stars) from among the more than ten reviews posted at the forexpeacearmy scam-busting site. The EA also seems to have shown a conspicuously poor performance among users in live demo account trading. Some users also complained about a lack of customer support from Forex Derivative once serious questions about the system’s performance arose.

In addition, reviewers even noted that Forex Derivative’s code seems designed to give good back-testing results but that the EA does not give the same results in live or demo trading, even using the same broker and the exact same time frame. Interestingly, a reviewer from 4xProject, whose own independent demo-test of the product lost 47% of its initial portfolio over an eleven-week trading period, reported that the vendor said they added this questionable code "to cover the NFA non-hedging rule correctly even in backtest."

Basically, an Internet search about the product turned up mostly poor user reviews and discussion forum postings, while just about all of the positive review articles clearly demonstrate classic signs of coming from affiliate marketers looking to cash in on the product’s sales they generate. Also, because a politely-requested review copy of the product was still not provided after almost a week had passed, the following information about Forex Derivative was instead gleaned from Internet sources that might include the vendor’s website.

Facts About Forex Derivative

Product Type: Metatrader 4 EA automated forex trading system.
Vendor Site: www.forexderivative.com
Cost: $97
Guarantee: 8-week no-risk 100% money-back guarantee.
Payments and Refunds: Made via Clickbank.

What You Get With the Forex Derivative Trading System

• The Forex Derivative Expert Advisor in ex4 format that runs on MT4

• A Users’ Manual in PDF format of ~ 30 pages with:
• • Installation instructions,
  • Details about how the software works,
  • Information about the EA’s money management techniques
  • Answers to common questions.

• A Forex Derivative DLL file.

Pros and Cons of the Forex Derivative Trading System

Pros:

• Focuses on obtaining regular portfolio growth.
• Aims to keep trading capital as secure as possible.
• Attempts to profits from market volatility.
• Adjusts trading strategy based on an intelligent assessment of market conditions.
• Varies position size depending on success rate and portfolio size.
• Analyzes data from several time frames, but runs on a 1-minute chart.
• Runs 100% automatically on the MetaTrader 4 trading platform.
• Free software updates.
• Works on 4 or 5 digit brokers automatically.
• EA functions in EUR/USD, GBP/USD, USD/CAD, and AUD/USD.
• Every open position has a stop loss.
• Includes an informative PDF manual describing the trading methodology and giving helpful money management tips.
• Downloadable software installs in just a few minutes.

Cons:

• Software needs to be activated on a protected web page to use the EA, thereby slowing down installation.
• EA lacks a manual trading option to allow user trading discretion.
• The system’s live performance may differ from its back-tested performance over the exact same time period and using an identical broker.
• Only four major currency pairs can be traded at once.
• Users report the EA does not seem to trade profitably in a live environment.

Conclusion

First of all, positive reviews from satisfied users seem to be conspicuously lacking with this product, although affiliate marketers with weak or non-existent forex trading credentials seem to write glowingly about it online in broken English. Some more honest reviewers were concerned that the system was written to modify back-testing results, while others claimed the EA was an outright loser when they had tested it in demo and/or live trading.

Overall, while the adaptable trading strategy featured in the system makes good sense, as does its intelligent position-sizing algorithm, we would still give this system a miss since it just does not seem to perform well in practice.

Nevertheless, if you still plan on trying out Forex Derivative, do be aware that its back-testing results may be manipulated. As a result, we would recommend demo-trading this system immediately after purchase to assure that its future performance is suitable for your trading objectives and risk parameters. If it turns out that the EA was not what you were looking for, just send it right back and get your refund from Clickbank.

Visit the official Forex Derivative website for more info.