I have seen so many posts here saying that EAs are scam, and automated trading is a fast way to lose all your money. On the other hand, in all books and tutorials, the advice that is considered most important is that you have your own rules of when to buy and sell, you should take notes about your decisions, learn from the mistakes, update your rules, but never break your own rules. Same goes for money management. Don’t put more money on the table just because you’ve lost some. Keep following your rules.
Now my question is: what could be better in strictly following rules (strictly, without feelings) than a computer program? Here I’m not talking about automated money makers that work as a black box, and you have no idea how they are working. But why is it considered a bad idea to build up your rules (from a book or from experience), code it in MQL4 (or whatever programming language you like and load the code via DLL), test it, run it, update it, test it, …?
The code can keep an eye on the charts whole day, you can’t. The code is not affected by feelings, you might be.
Please help me to resolve this contradiction, as I’m now confused
Peter personally I agree with you. How can people preach the value of a rule based system then call algorithmic trading uneffective???
I’ve been trading for years and honestly if you have time to sit in front of your computer all day than I would say discretionary trading is the most profitable but if you are like me and can’t do that, ea trading is the next best thing.
The hard part is finding an ea that actually works. They are out there you just have to be careful. Developing your own is also a great way to go but I personally have not done that.
Right now I am trading forex moring trade live with excellent results. I am demoing another ea and have stopped tradeing photon. The good news about ea trading is you generally get 60 days to try them and if they suck you get your money back.
So have some fun and whatever you do don’t use real money till you know an ea is good and don’t get greedy.
There are a lot of people on the forums here to who do not believe in automated trading of any kind. And that’s fine, but a lot of people who are set against it have either never tried it or have had a bad experience due to lack of researching retail trading programs before and while using them.
Executed well, algorithmic trading is good, because it eliminates emotional involvement that leads to trader error. Trading manually is good too, because a human trader with experience can see something go wrong in real time and have a good instinct with which to know to exit a losing trade or not enter a usually good chart setup that “looks wrong”.
Don’t get involved in the good vs. evil arguments. If you like to buy your Expert Advisors, do your research and test well. If you like to implement your best trading systems and write your own EAs, be patient in writing them, test them well, and be honest with yourself and walk away if it just isn’t working after a while.
I’m a computer programmer by profession, but I’ve been buying EAs as well as writing my own for a while now. If you have the discipline to research and demo, have fun with it.
Like the babypips school will tell you, know your own trading style and work with it and not against it. That includes automating trades or not…
Personally, I feel that no computer system can be better than the human brain… Most great traders (e.g. Jesse Livermore in Reminiscences of a stock operator) that I’ve read about in books talked about how their intuition had at times saved them from losing money… This intuition comes from years of analysing charts… and is very difficult, if not impossible, to translate into codes…
Therefore, while i agree that automated trading is the best way to ensure that we stick to our rules and adopt proper money management… I’m not comfortable with completely automating my trading… I prefer to use an EA to alert me when my trading rules are met, but I’ll make the decision whether to take the trade. If I take the trade, the EA will do it for me… calculating the correct lot size to use etc…
my new opinion - automated trading can be concretely determined whether your are losing or winning, as folks are stating- - takes emotion out of it, but also takes common sense out of it too.
I personally think the more common sense you can apply, the more success you will find - whether it is automated or manual or a cross of both.
EA trading can work but 99% of robots concentrate on entries and have NO PLAN for exits except a HUGE stoploss. When you see a system that intelligently exits trades with the smallest possible loss while also winning more than it loses you have a winner. Winning at Forex is all about stats and you need to have a built-in statistical edge (like the casinos).
Stop looking at the entries and start looking at the exits. WHEN you lose how much will it cost you? How often will it happen? Will your winners outpace your losers? Huge gains mean nothing if they can be wiped out by a single bad trade.
Newbies dont be amazed by 98% win rates. Winning 196 pips with 2 pip scalps (98%) and losing 400 pips with a 200 pip SL (2%) means you’ll be needing a BAILOUT ASAP!! (Even 99% is a loser in this scenario and some EA’s have even bigger SL’s)
So many people say a computer cant trade as well as a human can, it is Tuesday morning show me a human trader that has made more than 600 pips since Sunday Midnight.
Congrats to your profits! Looks really impressive.
Yeah, if ppl can’t understand computers they debunk it. We know that there is only one choice: Become the slave of a computer or let the computer be the slave. I guess they were build for the latter case.
My first bot also made a profit, but my other bot is moving around the zero zero line this month. Like a turtle.
Thanks Buckscoder Ive worked really hard on this, I found in my proir testing if the EA is consistantly hovering around the zero line its a good strat to base modified versions around it
You are right for sure consistancy is the key this EA is the latest version of a string of EA’s I have made most of them were not consistant enough for me to continue using them live, this one may go the same way. It is the first live test it uses 5 strategies at the same time.
Here is the bigger picture the total profit is the combined total figure it rose quite a bit since my earlier post a few hours ago due to the end of that large price move this morning but as you can see by the top few trades in the last 20 trades list that price move is responsible for most of the current profit, it was about 100 pips in profit before that from yesterday. I would expect it to lose some of that 900 pips during a flat period which will probably occur now that price move appears to be at an end around the 1.3400 mark.
But still having said all that, 900 pips in 36 hrs is a case in point to show the potential of automated trading. Probably the smart guy would cut and run right now but I am going to let it ride for the rest of the week to see what happens.
I agree on the potential of automated trading… Only a robot/ea is emotionless and can monitor multiple charts for us 24/7… but I believe the ultimate decision should lie with the human trader…
I think most robots can perform well only under certain market conditions (trending, ranging, volatile, news etc)… so it is up to the human trader to decide what the current market condition is, and to turn off the robot when the conditions are not suitable for the robot… So, I’m more for hybrid trading… the robot monitor the market for me and alert me when conditions are met… I make the trading decision…
EA’s seem to work on probabilities and rigid rules, whereas humans are not bound by these rules, we have the power of thinking.
The best EA’s I’ve seen are the ones that take small low risk trades. They won’t make you rich, but it’s better than sticking your money in a savings account.
