Should you pay Ashraf?

Ashraflaidi.com Premium Intermarket Insights

A review

Back in March, 2016, I decided to “trial” a subscription to this trading advisory service. When I say trial, I mean I paid for it. However, I considered it a trial of something that I would hopefully want to continue.

Various subscription lengths were/are available (one-, three-, six- and 12-month plans). I chose a 6-month subscription, since I’ve been trading far long enough to know that a one-month “trial” would likely offer little or no indicative value going forward, and even a three-month “trial” would likely be only marginally predictive. I reasoned that six months ought to offer some actionable insight.

(For what it’s worth, the site offers a free one-week trial, which is absurd to the point of downright intelligence-insulting, if for no other reason than it’s entirely possible that NO TRADE will be opened and closed within any random one-week period. One week is absolutely insufficient to evaluate this service.)

What will follow is, I believe, a fair and balanced look at the service.

The raw stats

The numbers are always a good place to begin, although *how* those numbers came to be is even more interesting to me, and if you trade, you’ll likely be interested in reading beyond the headline numbers.

My subscription began on March 12th and ended on October 12th. During that time, 55 trade recommendations were issued. The final result of all trades that Ashraf called during the subscription time was:

24 Wins, 31 Losses

Trade recommendations were in three broad categories: foreign exchange, equity indices (via CFDs), and commodities (precious metals and oil, also via CFDs). All three categories resulted in net losses.

Trades were held as briefly as a day or two, but also as long as four months and longer.

By far, most of the recommendations were in forex (41 of the 55 calls). And the final win/loss record in forex calls was:

18 Wins, 23 Losses

As that record might suggest, the net-pip result in forex trading was a glaring minus. The net pips result of all the forex trade calls was:

Minus 3,055 forex pips

This is a negative average of more than 500 pips per month, or about 100 pips per week — and you would be paying for this “performance”.

It should be obvious by now that the 14 non-forex trades have a 6-7 record, with 1 trade still open.

The average forex loss was 326.74 pips per trade, and the average win was 247.78 pips per trade. This is a negative 1:1.32 ratio. One needs to win about 57% of the trades to come out even with that ratio, and Ashraf isn’t doing that, at least during my six month subscription. Over six months, he’s winning at only a 43.9% rate. On forex trades, then, he has an obvious negative expectancy on any trade.

In forex, Ashraf had a maximum winner of 350 pips (twice), and a maximum loser of 850 pips.

Minus 85 equity index points

There were only 11 index trades called, and Ashraf was 5 wins and 6 losses.

Minus 161 commodity points

One win, two losses. The losses were in gold and silver, which were held far too long, racking up substantial carrying charges, and the stop on gold was even lowered as price finally approached it, to no avail. The one winner was a WTI trade.

Ashraf’s “dancing stops” & other general trading observations

Moving stops (increasing risk) is almost always a mistake (there are always exceptions of course, but they should be very rare), and indeed this was always a mistake for Ashraf. In all trading categories, Ashraf increased risk 11 times during my subscription period. This increased risk was always realized. Never, in my experience, has Ashraf increased risk on a trade and ended up with a winning trade. All of his widened stops were hit, some within hours, others within months. But they all resulted in additional trading loss. No exceptions, which is almost amazing if you think about it. So, in 20% of all of his trades (11 out of 55), the original stop loss was “temporary”. After you were in the trade, the stop was expanded.

It was never contracted. Ever. Not once.

Cutting winners early (or “Pie in the sky” targets)

When Ashraf (or the people who work for Ashraf) lay out a trade, they focus a lot on risk-reward ratio. I know this, because in his weekly videos (subscribers only, and they are rather amateurish) he has stressed that this is important to him. He has actually said that his subscribers would complain.

That’s fine, and maybe they should complain. Good risk-reward ratios are generally symptomatic of good trading. However, if you set a stop that you don’t expect to be hit, and then set a “pie in the sky” profit target that you will rarely if ever allow to be hit before you close the trade, merely it would seem, to setup an “acceptable” risk-reward ratio, then that initial risk-reward ratio, while within the bounds of what is considered good trading, is completely meaningless.

Ashraf’s risk-reward ratios are completely meaningless.

One might reasonably ask, “Yuki, how can you say that?”

Out of 18 winning forex trades, only TWO were closed by way of reaching their target. The other 16 were closed by Ashraf calling them closed, prior to the target. Only one other trade out of the entire 24 winning closed trades (all categories) went to target, and that was a Dow 30 CFD trade that may have reached the target so suddenly that Ashraf was not able to close it before the target was reached. 🙂

That Dow trade, by the way, entered in early May and closed in mid June, was Ashraf’s largest winner (530 points) of any of the 54 trades.

So out of 24 closed winning trades (all categories), only 3 went to target (one of every eight). Twenty-one were called early, and yet in a number of cases went on to become substantially larger winners.

And … ALL of the 30 losing trades (all categories) either hit the initial stop, or an expanded stop. In no case did Aashraf ever close a losing trade before it reached the stop (actually reduce risk), even if the trade had technical indications that might have led some traders to close it and move on. One can argue, of course, that trades should be allowed to reach stops before being closed. But every single trade with no exception? And when you’re letting only a very few of your winners reach your profit targets before closing them?

The answer should be fairly obvious.

Ashraf also doesn’t do partials, doesn’t do trailing stops, or employ any other techniques that could improve his trading results. He makes a call. It’s all in, and all out. And the risk-reward ratio he “shows” at the beginning of the trade is highly unlikely to be the actual risk-reward ratio by the time he calls the trade closed.

Ashraf let’s all of his losers run to the stop, or the expanded stop, and cuts his winners short of his initial profit targets in almost all cases.

Ashraf’s “Private Account” (PA) dodge

Ashraf claims to have a private trading account, and there’s no reason of course to doubt this. But he uses the existence of this account to play a kind of “heads I win, tails you lose” game with his subscribers.

For example, when stopped out of a particular trade Ashraf will often state, either via social media or on his subscription site that, “I’m sticking with it for my PA.”

There is *never* any subsequent update on this.

Not only is there no update, but no parameters are given. Apparently, Ashraf is now holding the position with no stop (if he’s got one, he’s not revealing it). In any case, the ultimate disposition of these “PA trades” is never revealed, other than once in a while a reference to one as (imaginary) “proof” that he’s a really sharp trader.

Ashraf rationalizes the fact that he doesn’t reveal particulars on these trades, “because most of my clients can’t assume the risk that I can.” (This is from an actual DM he sent me in response to a question I asked him about this subject.) Even if this is true, and I think it’s doubtful, it is no excuse for not revealing the parameters of what you are doing when you are actually using it to claim expertise — and in fact are almost undoubtedly encouraging at least some subscribers to ignore the (initial or even expanded) risk parameter. It’s absolutely no excuse, then, for parameter non-disclosure.

Ashraf should never mention his “PA” with regards to a failed trade unless he’s prepared to explain fully what he claims to be doing with it. The way he currently does this, it’s a game, or a tout. And it is impossible to verify. There are several examples of these “I’m sticking with it” PA claims in which the adverse excursion has continued to the point at which the loss would be a multiple of the original stop loss. Not a peep out of Ashraf when this happens. You are just left to guess.

Exaggerated Claims & poor trading decisions

It’s probably no surprise that trading touts exaggerate. Ashraf is no exception. He’s active on Twitter and often uses it to suggest massive wins that, in fact, he has not achieved.

Early in 2016, he was shorting gbp/jpy. This was a great trending trade, and if you got on it and stayed with it, you made a lot of money.

Ashraf, however, doesn’t do this very well. He gets in, makes a couple of hundred pips, and then calls the trade closed. It continues 200 or 300 pips lower, and he gets in again. Same direction. Obviously, if instead of calling the trade closed, he simply lowered the stop, he’d be much more profitable.

But Ashraf NEVER brings a stop closer. (As I noted above, he only widens them.) Ashraf has NEVER ended up with a stop that would actually lock in a profit (something a good trader should always be trying to accomplish — setting up a “risk-free” trade that can potentially be held for a very large gain with no risk to capital at all).

What Ashraf is most concerned about is percentage of winners. This is the only metric that matters to him, apparently because he feels that he attracts unsophisticated traders who think (very incorrectly of course) that this is the only important metric. This is why, I suspect, that instead of riding a very profitable trend and moving stops progressively as the trade moves in his favor, Ashraf calls them closed and tries again, often at prices that, had he simply done nothing, would have resulted in substantially more gain for subscribers.

All successful traders employ this methodology (moving stops to protect gains once they are substantial). Ashraf does not do this. Ever. It’s a huge flapping red flag.

And Ashraf will troll for new subscribers by suggesting that he’s been in a large trend move for some time, when he’s actually been in only for rather small portions of it, and in fact has even been stopped out on retrace swings that have actually subtracted from the profit he’s managed to squeeze out of these larger moves.

All in all, it should be clear that I do not think the service is worth paying for. In fact, I pretty much wrote it off, not even taking the signals at all after about 6 weeks (just carefully tracking them) after I could see the incredible flaws in his methodology. I have not found a service yet that can trade to my own standards (or even turn a profit). If I do, I’ll post a blog about it.

For me, Ashraf’s service was a waste of petty cash. Unless it’s petty cash for you, too, I’d advise looking for a different service.

–Yuki (aka TheYukster @setagayagirl)

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