Passive Income Generator Discussion

Appropriate for USA traders? If yes, please tell me how we can use your system, buy EA, PAMM, signals... Thanks.

The Passive Income Generator was designed for use on US brokers. It is a quasi no loss program because although the PIG will open several trades over time, a process known as feathering into a trade, they will all close at once. When they close, there may be a loss or two but the total will always be for profit.

The passive income generator is a stand alone system that can be down-loaded free and used on your brokers demo account for as long as you like until you are happy with your program. To purchase or down-load go to TheSafeInvestor.com For general theory and operational nuances go to our research site at Forex-Assistant.com

If you have any questions, please feel free to ask them here, I'll do my best to answer them.

Bob

Thanks Bob. Received the demo testing download and read the manual. So I use AUDCAD only right? Will any timeframe be ok or I must use a particular timeframe? Thanks.

Time frame is not important as there is no indicators to play off of the time charts. The Aud/Cad has a fair amount of up and down movement while keeping the total trading range low. You can put the program on other currency pairs but I would start with the aud/cad until I got a nice long look at the other pair to see how it operates. You want lots of up and down and not too much of big jumps away from center.

By the way, if you have any suggestions to make learning these programs easier, we would be sure glad to hear them.

Bob

Thanks Bob. I will first backtest PIG on AUDCAD H1 to get a feel, then do demo with FXCM. While reading the manual I have the feeling that you are saying that even with setting 1 "no loss" cannot be guaranteed, right? That must be true because any investment involves risk so people with some retirement money for forex should at least have several baskets like PIG but not all in PIG. I may be wrong. Thanks.

Hi, Bob,

I just completed backtesting on AUDCAD H1 from 2000 to 2013 with an initial balance of $12500 showing a net profit of $19711, a simple APR increase of 7%. Backtest does not include swap which always totals to a negative number. Also, when we try to close all positions in a basket, for many reasons they are not all closed at the same time and when they are finally all closed the prices have moved a little against us making our profit less. Then there is the investment for PIG EA of $495. We should not expect a 15% APR for SafeSetting of 1, right? I will try SafeSetting 3 and 5 to see if I can get an APR of 15%. Thanks.

Hi, Bob,

I just completed backtesting on AUDCAD H1 from 2000 to 2013 with an initial balance of $7500 showing a net profit of $16830, a simple APR increase of 8.77%. I will try SafeSetting 5 to see if I can get an APR of 15%. Thanks.

Well! When SafeSetting 3 (balance 7500) starts on 07/27/08, the account crashed, because there was no time to collect wins to increase balance to cover the 13 level range, right?

You're working on back test? I could never get reasonable back-tests results. I have forward demo test to compare to and starting at the same place my forward test did, the back-tests always missed and by a fair margin. The only thing I can guess at is there may be missing data to cause the differences. I do not use back-tests, I don't trust them and don't believe when others show me their back-test for something. I have 7 years of dealing with them, and still haven't found them trustworthy.

That said, I can tell you why this one won't back-test. Normally the take profit is calculated but the PIG uses a different way to handle the changing daily swap. It calculates the expected profit internally and only closes when the profit is at least that calculated amount. Back-tests don't have any way to know what the profit is at any any given point, so it will close some trades but not others and so on.

The only way to test the Passive Income Generator is to put it on a demo and watch it. Watch the draw-down, watch how it closes the trades. While you are testing the system, you will also be learning about the system and every investors friend, patience. I'm not in any hurry to get your money, take your time and 'learn before you earn'.

The PIG account above was begun on July 1st 2013 and as of today (3/26/14) it is up 20.28% rounding up to 9 months of trading, comes to 2.25% a month on average. Just out of curiosity, why not run a B-T on the aud/cad July 1st 2013 to present and compare the data from the forward test to the back-test. You stand the best chance of good data if your just looking back one year, or less as the case is here.

I need to take some down time. If I don't get back with you as quickly as you deserve, I hope you can forgive me.

You can also get questions answered by e-mail if you send them to [email protected] What Mary doesn't know, she knows how to find out.

Good luck with your testing.

Bob

Hi, Bob,

Thank you for replying. You must be right about backtesting and you are absolutely right about SafeSetting 5: scary! See attached. Forward testing takes a long time but there is no way around it in the case of PIG. You are right: patience. I will next set up a demo account and let it run for sometime. Thanks for the explanation that helps me understand PIG better.

Hi, Bob,

I backtested PIG SafeSetting 5 on AUDCAD H1 from July 1st 2013 to (03/26/14) and won $835.40 which is 20.88% of 4000, very close to your 20.28%. Could I assume that you are using SafeSetting 5 for your demo? Thanks.

I use a balance factor of 5000 or a safety setting of 4. I tend to think that where there isn't much in the account to lose, I can afford a little extra risk but as my account grows, the balance factor goes up and the safety settings goes down.

You can see what I was saying about back tests. Short term are closer to real than long term ones. Earlier you did a BT for 12 years and got 8.7% a year. But in just 9 months you got over 20% on that last test. That is too big of a discrepancy to try to rely on. I am forced to work with back tests from time to time, but I hate them.

However, that straight line for the profit is something to look for in a system. It means no losses. For the Passive Income Generator, it means that as it closes out several open trades at the same time, there may be some parts that close at a lose but the other part closes for a larger profit than the ones for a loss making the total trade set profitable, every time.

The PIG has slightly more risk than Rise but nothing worth talking about. And it averages around 2% a month.

Bob

1. I quite agree that backtest cannot be depended on for accuracy but as a quick feel it saves time.
2. Another factor for the 8.7% and 20% difference is the former is SafeSetting 3 and the latter SafeSetting 5.
3. For retirement money it would be better if we know the required balance that excludes account crash so that we can withdraw all money above for daily living. It seems SafeSetting 1 balance requirement is what is needed. The question is whether we have enough big nest egg whose 7% income is enough for a comfortable retirement.
4. As you know, many martingale/grid EAs give beautiful no-loss steadily-going-up performance, until the crash. Retiring people don't have another youth for a second a third job to rebuild the nest egg. That is why extra caution is never too extra when choosing the EAs for retirement money.
5. The demo forward account is running without surprises, started 03/26/14 with balance $4000, SafeSetting 5, made $30 so far.

Thanks.

The safety settings run backwards from the balance factor. The balance factor determines how large the first trade is. Divide the balance by the balance factor then divide that by 100. $4,000 is too hot, would recommend starting with $5000. Lets say you have a balance of $16000 and a BF of 5000 16000/5000 is 3, so your first trade in the set would be for .03 lots.

A safety setting of 4 was equal to a balance factor of 5000 however the new release just uses the balance factor as the safety settings were eliminated when we discovered that they were not making using the system any simpler and was actually confusing people. The new release is available just download it and set it up on your account. Make sure you shut down the MT4 before updating. Before mt4- 600 the program was more forgiving and would still updates if the mt4 was left open. It isn't like that anymore. The Mt4 may not update if it is still running when the new install is run. Just a little heads up.

From above 'Retiring people don't have another youth for a second a third job to rebuild the nest egg.'
I know, I'll be 62 this year. Time does get past you doesn't it?

Bob

PS
A martingale will not give a smooth curve effect, here is an example of a modified martingale curve.
Phoenix Program Testing Account. This is not available to users yet, just something that I am working on.

https://www.myfxbook.com/members/ForexAssistant/mt4-6040547/570955

your site says you are retired? don't give up because of what someone said! pip catcher and trolls and low lifes will always reign over the internet!

I hope your retirement has nothing to do with that thread.

Kind regards

Well, no I retired because I'm 62 years old and I have one last mission that has all my attention these days. Its the biggest trade in history, if we get it right, everyone on the planet wins, if we fail, everyone loses. Come and check it out, I would love to hear your opinion.

https://www.myfxbook.com/community/new-traders/traders-give-birth-new-idea/755228,1

However, I do want to say that I appreciate your kind words of support, thank you.

Bob

Hi, Bob,

I am still following your demo account.

Am I correct that the demo does not incorporate swap interest (plus or minus) or commission charge as in the case of FXCM accounts? Will they have an effect on your EA in real accounts? How to deal with the effect if it is negative to avoid account crash?

Thanks.

Jim

EAgreat posted:
Am I correct that the demo does not incorporate swap interest (plus or minus) or commission charge as in the case of FXCM accounts? Will they have an effect on your EA in real accounts? How to deal with the effect if it is negative to avoid account crash?
Jim

Jim, yes the swap is accounted for but it is handled a little differently than might be expected. Instead of calculating everything out then adding to the take profit each day for the swap, the program watches the total profit and when that is greater than a certain amount, then it will close all of the trades, the ones in profit and the ones out of profit, however the total will always be in profit by doing it this way.

This is a good time to check out the aud-nzd as it is in serious draw-down. However, the total Draw is only at 35% or so. This is the first time that we have seen 10 iteration opened. If the price goes any lower, it will be in new territory, for the new forex spot market anyway.

Jim you are aware that you can down-load the Passive Income Generator and use it on a demo account free aren't you? And I will have a training program ready in a few more months as well. I'm thinking that the first lesson will be free also. However, in the mean time, let me know if you have any unanswered questions.

Bob

Many thanks, Bob,

I am still puzzled:

1. When I saw your demo history, I did not see swap interest, plus or minus, added. How could it be considered?
2. Now with FXCM in US, they also use commission with narrower spread. How could the total profit include the commission?
3. Yes, I did test the downloadable version, but at that time I was testing the SafetySetting levels. My result was that only level 1 is safe for me. I don't mind making lower annual percentage profit but I can't afford account crash. Other levels seem to reach crash in backtesting.

Thanks.

Jim