How did we test

This is an excerpt of our Robots website.
We invented several trading robots and fully-automatic trading systems to achieve a monthly passive income.
Please read the full article on our trading robots here

As described in “Trading Strategy“, we developed the robot and carried out backtests.

After a positive backtest, we continue with forward tests by opening a demo account with a broker and let the robot loose.

After a while, we compare the results from the backtests with the results in the demo account.

If they match, we activate the robot on a live account with real money.

After a while, we compare the results from the demo account with the results from the live account.

If they match, we regard the robot as working.

Nevertheless, all the results and yield expectations shown here refer to back testing, i.e. the optimal course of a trading period.

When trading in financial instruments, however, unforeseen events can occur at any time that drastically worsen the result of live trading.

If, for example, a trade is held over the weekend, any major news or event on the weekend can lead to extreme fluctuations on Monday morning.

As a result, an existing stop may not be executed and the trade is closed at a high loss.

Every few years, so-called black swans occur, i.e. surprising events that have a huge impact. Black swans can lead to a complete market dry up, i.e. no realistic market prices can be determined.

This happened to me live when I was long in EURCHF with five lots in 2015. On 15.01.2015, the Swiss central bank unexpectedly lifted its peg of the Swiss Franc to the Euro. As a result, the Swiss Franc fell from 1.20 to less than 1 € within 30 minutes. A 20 percent loss in a currency pair is a full-blown crash!

What saved me back then was the very reliable broker WH Selfinvest and that my stops had been in the market for a very long time. Because WH Selfinvest had routed the order through, my stops at 1.20 were still executed when liquidity was available in the market.

Later executed orders could only be executed at 1 € or less due to the dried out market! This led to a total loss for some trading accounts and to additional claims of some brokers against their traders (“obligation to make additional payments”). Years of legal disputes followed, some traders lost their existence and are indebted for years.

Another black swan was the 24.06.2016, when the British voted for the Brexit. The DAX dropped by 1000 points within a very short time on one trading day:

The largest black swan so far appeared in February/March 2020.

The corona crisis triggered a crash on the global stock markets with massive losses.

United States

Soon after trading began, a Level-1 trading curb was triggered on major US stock markets due to increased selling, leading to a 15-minute halt on trading.[235] Level-1 circuit breaker is triggered with a fall of 7% on the S&P 500. The trading halt occurred after the markets reached a drop of 7.2 percent within 15 minutes. The crash temporarily recovered after the Federal Reserve Bank of New York offered at least $1.5 trillion worth of short-term loans to banks for 12–13 March, but the market quickly resumed its decline soon after.[271] The Dow fell 2,353 points,[272] losing all of its gains from its lowest point in 2018.[273] The drop surpassed Black Monday, which occurred just a few days before, to be the greatest single-day point drop ever.[274] Together with the drops of 1,191 and 1,465 points on 27 February and 11 March, the four largest Dow daily losses up to Black Thursday were all linked to the COVID-19 pandemic.[275][276][277][278]

Overall size of the falls

“In the 33 days between 19 February and 23 March, the FTSE All-Share Index fell by 33 per cent […] The MSCI World Index declined by 34 per cent.”[479]

Source: 2020 stock market crash, https://en.wikipedia.org/w/index.php?title=2020_stock_market_crash&oldid=1050738779 (last visited Nov. 22, 2021).

Evaluation of the live accounts

I had invented my first robots in January 2019 and had already set up a live account for my son in March 2019.

An evaluation of all live accounts of our family since March 2019 showed:

The least annual return was 40%.

The longest observed period of a live account with real money dates back to March 2019, a full 12 months period!

The robots reliably generated a high return. 2019 was characterized by a further, strong rise in global stock markets and uncertainty on the currency markets due to the Brexit.

At the beginning of 2020, there was a predictable but huge crash on the stock market. The robots had also mastered this crisis and made a profit, or rather, had maintained the existing capital while classic stock portfolios lost.

Here an evaluation of the individual accounts:

Account 1

You opened a trading account with XTB in March 2019 and deposited 1000 € on 28.03.2019.

I made several test trades on 28/29.03. and saw that the account is active.

The automatic stock exchange trading started on 29.03. with an account balance of 1002,08 € with these robots:

Schmitti3 with 0.01

Schmitti4 with 0.11

EURUSDCCH4 at 0.11

GBPUSDCCH4 with 0.11

The last trade before this evaluation was closed on 06.03.2020. The account balance is 1455.52 €.

The profit so far is 455.52 € in 12 months.

The average profit per month is about 35 €.

The annual profit is about 420 €.

The annual yield is about 40 percent (1000 Euro deposit, 420 Euro profit).

Account 2

You opened a trading account with XTB in April 2019 and deposited 500 € on 17.04.2019.

I made a test trade on 17.04. and saw that the account is active.

The automatic stock exchange trading started on 02.05. with an account balance of 499.77 € with these ro-boters:

Schmitti3 with 0.01

Schmitti4 with 0.03

EURUSDCCH4 at 0.04

GBPUSDCCH4 with 0.03

The last trade before this evaluation was closed on 12.03.2020.

The account balance is 682.92 €.

The profit so far is 182.92 € in 11 months.

The average profit per month is about 17 €.

The annual profit is about 200 €.

The annual yield is about 40 percent (500 € deposit, 200 € profit).

Account 3

You opened a trading account with XTB in May 2019 and deposited 500 € on 09.06.2019.

I made two test trades on 10.06. and saw that the account is active.

The automatic trading started on 12.06. with an account balance of 500.62 € with these ro-boters:

Schmitti3 with 0.01

Schmitti4 with 0.03

EURUSDCCH4 at 0.04

GBPUSDCCH4 with 0.03

The last trade before this evaluation was closed on 12.03.2020.

The account balance is 769.25 €.

The profit so far is 268.63 € in 10 months.

The average profit per month is about 25 €.

The annual profit is about 300 €.

The annual yield is 60 percent (500 € deposit, 300 € profit).

Account 4

You opened a trading account with XTB in May 2019 and deposited 500 € on 09.06.2019.

I made two test trades on 10.06. and saw that the account is active.

The automatic trading started on 12.06. with an account balance of 500.08 € with these ro-boters:

Schmitti3 with 0.01

Schmitti4 with 0.03

EURUSDCCH4 at 0.04

GBPUSDCCH4 with 0.03

The last trade before this evaluation was closed on 12.03.2020.

The account balance is 849.28 €.

The profit so far is 349.20 € in 10 months.

The average profit per month is about 30 €.

The annual profit is about 360 €.

Account 5

You opened a trading account with XTB in May 2019 and deposited 250 € on 23.06.2019.

Automatic stock exchange trading started on 10.07. with an account balance of 200 € with these robots:

Schmitti4 with 0.03

EURUSDCCH4 at 0.03

On 03.08.2019 49.35 € was transferred to the trading account.

The last trade before this evaluation was closed on 12.03.2020.

The account balance is 332.30 €.

The profit so far is 82.30 € in 9 months.

The average profit per month is about 9 €.

The annual profit is about 100 €.

The annual yield is about 40 percent (250 € deposit, 100 € profit).

The achieved results are reproducible at any time.

The nice thing is that these high returns can be achieved with any account size, whether 500 €, 5000 € or 50000 €.

The risk is always the same in percentage terms, only the amounts become larger (both profit and loss.

It was important to me to prove with the live accounts that the robots continuously generate profit.

The documents are made anonymous and can be presented at any time on request. The results stand up to any test and are therefore resilient.

Of course, there will be people who say “Yes, but that’s only been going on since 2019, the time period is too short for me”.

As described before, the common tests consist of back-testing, demo accounts and live account. I cannot test any longer than I have since the robots were invented.

I hope to be able to convince the last doubter with these figures and my absolute transparency.

Of course the described robot systems can also fail at any time or stop working for various reasons.

Every Euro invested is risk capital that can be lost at any time. The investment in trading robots is comparable with any kind of business start-up.

If something goes wrong, the company has to file for bankruptcy and the raised capital is lost forever!

If everything goes well, however, the investor is rewarded with high returns, which make him forget the risk he has taken…

Published by Schmitt Trading Ltd

Schmitt Trading Ltd is an international software company and develops trading robots. We want to share with you how we live our dream to become financially independent. Join us at our thrilling day-to-day adventure trip to freedom. Follow us for more information. Subscribe to our latest blog posts.

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