These days, you can find many people selling expert advisors and claiming that their trading robots are profitable. But it can be said with certainty that most of them are entirely unprofitable or spam.
There are specialized methods that can be used to identify spam expert advisors.
The algochurch, which works in algorithmic trading and trading robots, has published a comprehensive article that presents all the essential factors that should be analyzed before buying expert advisors.
I will mention some of the most important ones in the form of a checklist here.
1- Check Backtest accuracy: For more accurate analysis of robot results
2- Report analysis of Expert advisor (a lot of important factors)
3- Forward test: EA performance in an unseen period
4- Robustness tests: Tests to sufficiently ensure the profitable performance of the robot in the future
5- Backtest time period: Sufficient and reliable Period
6- money management used in the robot: Not using high-risk money management
In this article, each of the above factors and other essential factors is fully explained, which is recommended to read.
Knowing these things reduces the risk of purchasing spam and unprofitable expert advisors to zero.
A pro (profitable) friend of mine has developed an EA that has many more winning trades than losing ones, but he runs his losses longer and adds to losing positions.
my bro,Making a profit in a period, a currency pair, and even being excellent does not necessarily mean that a robot will be profitable in the future.
Because that robot may have been over-fit or over-optimized.
A terrible robot Which under-optimized will perform better than an excellent bot that hasn’t taken a single loss in the past.
For this reason, other tests, including strength tests and other factors, must be checked and analyzed.
I have been working in the field of artificial intelligence and data science for five years and have a university education. In my opinion, this is currently the most complete article I have read on identifying spam bots.
I thought about using a ready-made EA but the thought of letting someone I don’t know handle my money doesn’t sit well with me. Don’t get me wrong, I still want an EA, but if market conditions break it, I want to be able to fix it! Here’s the course I’m taking:
I’ve spent some time putting some indicators together that play nice with each other.
I added 3 moving averages to identify the trends and consolidation zones.
I created well defined entry and exit rules.
I backtested the ever living crap out of the system.
I forward tested it for a month (I know, too short).
It sounds like a lot of work, and yes, it takes time to put all the pieces together, but in the end I have a strategy that has a solid track record. All I have to do now is either pay a coder or learn to code myself.
If you have a good grasp of market structure and slap up a few Moving Averages, you’re more than half way there. If your backtest is 60% accurate (that’s pretty easy to do) I would consider it worth paying a coder.
Hi!
I’m not a fulltime coder but I’m interested in your strategy. Maybe it is possible to feed my ai to build an EA from it. If it works and is showing profitable results you can have it.
Lol so if you can’t tell, I’m the controlling type when it comes to my algorithm. Thanks for the offer though.
I got it to an 80% win rate even with my all to human mistakes. So yeah, I’m hoarding it.
What language do you code in?
Hello my friend.
Unfortunately, 95% of those who work in this field do not really know what algorithmic trading is, just like you.
All of them think that algorithmic trading means converting a strategy into code and using it!!!
Just like you, who think you only need a simple programmer to convert your strategy into code to experience algo trading.
The name of this work is auto trading, not algorithmic trading, in which companies invest thousands or even millions of dollars.
It is interesting to know that even those who claim to be doing algorithmic trading do not really know that they are doing auto trading.
If I want to explain to you very simply, in algorithmic trading, it is not humans who make the trading strategies.
These are artificial intelligence or computer algorithms that, with the help of hardware, process the number of states that are more than all the atoms in the universe and extract powerful strategies.
Not like you, who only know moving averages, and the number of situations you check doesn’t even reach 10.
I suggest you read the article entitled “Differences between algo trading and auto trading” written by AlgoChurch about this, to realize that automating trading is the last thing to think about.
@TheMightyJ Hm, I could be wrong, but I think you’re mixing up a few terms or don’t know exactly what algo trading is! An algorithm searches for the most profitable variant of your strategy. You can give it all kinds of strategies. How detailed the settings can be depends on the algorithm. The advantage is simply that it can test millions of settings, for which a human would need several years. In the best case, you end up with a profitable variant of your strategy.
The code is in mql.
So this is the definition of an algorithm straight from investopedia. Take a close look at the very first sentence.
I have taken mathematical formulae and created a set of rules based on the outcome of said formulae.
Feel free to coin any term you want to describe how and why you trade but please don’t try to put words in my mouth. I clearly identified my creation as an algorithm.
Not once did I use the term, “algorithm trading” or, “auto trading”.
Go muddy the water elsewhere.
@TheMightyJ Yes, got your point. We are trying to help people with questions here and it is important to check beforehand that everyone is talking about the same thing when they say this or that. No need to be rude about it.
But I see you are happy with what you have and don’t need any help.
As I said before,95% of those who work in this field do not really know what algorithmic trading is, just like you.
All of them think that algorithmic trading means converting a strategy into code and using it!!!
Innostopedia is a public blog, not a database of academic and specialized articles.
If you do a search in the scientific articles that are published in Google Scholar, you will find out.
It is interesting that Instopedia introduces algorithmic trading under the name of high-frequency trading, while HFT is only a small branch of algorithmic trading.
I suggest you talk to a data science or artificial intelligence expert with a university education to understand the depth of the disaster in the Instopedia articles on algorithmic trading.
I apologize if I was rude. I did not mean to be rude.
But my friend, I am not going to sell you a product.
My intention is only about science and the expertise I have in this field. I have seen many people who sell their worthless robots to ignorant people and bring these people to the verge of bankruptcy.
I undoubtedly claim that I have enough expertise in this field, why did I entrust my youth to this expertise. And I am ready to discuss it with experts (which I did once with my professor)
You can find many people around the world who say that trading bots doesn’t work, or algorithmic trading doesn’t work.
If all the world’s investment companies and commercial banks all use algorithmic trading. Annually, they invest millions of dollars to improve their algorithms and hardware to process profitable strategies.
They know exactly what they are doing and that is why they are totally profitable every year while retail traders are losing money.
Forex expert advisors (EAs) are automated trading programs that automate trading processes. While some are useful, others are spammy, offer no real value, or are even fraudulent. Here are some ways to identify spam expert advisors:
1.Unrealistic promises: It is essential to be cautious of EAs that promise unrealistic profits or returns. If an EA sounds too good to be true, it likely is. No trading system can always guarantee profits, and the market is always unpredictable.
2.Lack of transparency: A reputable EA provider will be transparent about their trading strategies, back-testing results, and trading history. It could be a red flag if the provider is unwilling to share this information.
3.Poor customer reviews: Observe reviews and ratings of other traders who have used the EA. If the reviews are overwhelmingly negative or there are many complaints about the EA’s performance or customer service, you should avoid it.
4.High price: It is essential to research and compare prices with similar EAs. Some EAs are expensive, and scammers may use high prices to lure unsuspecting traders into buying worthless products.
5.Lack of support: A legitimate EA provider will provide customer support and respond to inquiries promptly. If the provider is unresponsive or difficult to reach, it could be a sign that they are not legitimate.
Overall, It’s essential to thoroughly research any EA before purchasing it. Find a provider with a proven track record, transparent trading strategies, and good customer support.
