Can you fake mt4stats?

Posted on 26. Mar, 2010 by Jakob in EA, Random Noise, scam

I think FAP Turbo was the first EA where you could see ”live results” from mt4stats, imbedded on the sales page. As FAP Turbo was selling like crazy, it is easy to understand why everyone else selling EA´s started to take the same approach. However, most of the time when you buy one of these EA´s which has shown incredible live results from mt4stats, they still manage to lose money consistently on your real trading account? How is the possible when you have seen amazing results from a long period of forward testing? Showing good results from forward testing is obviously a very good sales pitch, but I am yet to see any EA live up the results posted on any sales page. Over at the MQL 4 Forum, there is a pretty interesting discussion regarding the possibility to fake mt4stats results. This guy jjc is arguing that it is possible to do so, as long as there is a financial incentive to do so:

It’s entirely possible to manipulate something like MT4Stats. All that’s happening is that an HTML report is getting sent via FTP to a web server. The report could say anything. For example, you could do the following:
- Create a very simple piece of software which replicates MT4′s report format
- Sit in front of your computer, live, working out what would have been a successful trade over e.g. the last 5 or 15 or 30 minutes, and continually feed these historic winning trades into the software.
- The “report” then shows trades which have been manually selected based on what’s been successful.

Very hard to detect if done within the 5-minute reporting granularity of mt4stats. A bit easier to detect if the timeframes of the “trades” are longer. Not particularly hard to automate the selection of the historic winning trades.

Having said all that, I am not claiming that these results have been manipulated.

It depends on the form in which you’re being shown the “forward trades”. For example, I work for www.mtintelligence.com and I can assure you that the stats on that (or on mt4stats.com, or mt4live.com etc) could be faked by someone with enough incentive to do so. I’ve mentioned this before in page 2 of ‘Make profit 250% a weeks’. I’m not saying it’s easy to fake this kind of thing, but it’s perfectly possible if the financial incentives are there.

If you have access to the second-by-second activity of the trading system then it does obviously narrow down the range of possible frauds. Personally I’d still be watching out for the following, in no particular order:
- Very broadly: systems which are effectively random (or have the potential for occasional significant loss), and which happen to have done well over a recent time period. It’s very easy – whether unwittingly or cynically – to construct a system which makes money consistently… apart from occasional losses which wipe out all your profits.
- Deliberate scams based on the above. For example, automated forex variants of the age-old scam where you successfully predict the results of future horse races.
- Systems which depend on the material difference between demo and live accounts. I know a reasonable sample of people who’ve tested all the major commercial scalpers on live accounts versus demo accounts, and I don’t know anyone who’s seen similar results on demo vs live. Many of these scalpers are exploiting things which are purely an artifact of demo feeds and demo prices.

You can check out the two threads here and here. Be aware next time you think about buying an expert advisor. If the forward test looks too good, it probably is.

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2. USDBOT – Another Upcoming Expert Advisor
3. Million Dollar Pips – Forward Test Discontinued
4. Win $3,500 with MyFxBoook
5. Forex Dynasty – A Closer Look

Tags: expert advisor, Fake forward test, Fake mt4stats, FAP Turbo, MQL4 forum, scam