Humans VS Machines

Just wanted to know your opinion on whether robots eventually make more money trading or humans show better results.

I noticed that most of Forex trades tend to use EAs and robots, though only few of them show constant profitable results. These few lucky ones mostly scalp. I have not seen a single trader yet who trades with robot and keeps his position open for say a couple of days. Overnight, may be, but for a several days, for a week - no. Majority of the traders still dissolve their money no matter if they trade manually or with robots. Those ones that generate profits show small but stable profits that they cut off the market.

The ones that trade manually are able to hold their position for days and weeks. And theoretically their profits should be much higher. In real life people get either greedy or scared too quick that result them close their position too late or too early. And eventually mo st of them loose their money too. But there is still a community of those ones that make money day after day.

So I wonder if we compare these two groups of lucky traders which one of them will make more money in a relatively long run, say 1 year?

I personally would go for humans. I think that people are able to adopt themselves for markets much better than scripts and other soulless species.

And here is a question: is it worth waisting your time for EAs and robots testing? May be it is better to master your skills in manual trading.

Just the ideas.

What would you say?

I believe you already know the answer to your question. In any case, learn the craft. Whether you use a robot or not, you need to have a full understanding of the market. If you can’t profit without a robot, you will not profit with a robot.

Let me answer your question with a question. Do the banks employ a couple of people to tend several trading ‘robots’ handling billions of dollars, or do they employ hundreds of humans at terminals to handle the money?

I think both but I bet they are not using Mt4

NY times article about black box trading

google black box trading, algo trading, dark pools

Mm an interesting read, thanks for that! :slight_smile:

yep, that was interesting. I was just reading about the Goldman Sachs automated trading also. A bit sophisticated for a metatrader application I would think. !

“never send a human to do a machine’s job”
-The agent from the Matrix-

I think machines are already winning, where do you think all of the money is going.

Well, I had some deep insights to banks. A few years ago they would have been happy with MT4 and EAs.

But I wouldn’t buy any locked EA. Nobody knows if they not one time start blew up your account. If you can code then you can put some energy in creating an EA and you gain more free time where you do not have to sit in front of a machine to stare at charts.

Generally, a number cruncher can do things faster, without emotion and more precisely than a human. Right choice for forex.

2 pips.

I agree with the emotion part.

I have not seen a single trader yet who trades with robot and keeps his position open for say a couple of days. Overnight, may be, but for a several days, for a week - no.

check the attached image thats the average holding time from my EA.:wink:

Well, that came not from my side. I absolutely agree here. My EA is running in H4 and keeps positions open over 2-3 days sometimes, too.

Well, that depends on the strat. But if the swap is not an issue (some currencies only) and the carry trade not part of a strat, an EA could also close trades over night. All robots are simulators of human actions, because all robots got coded by humans (if I missed something here and there is a robot coded by mars men, anybody please report). So, a robot can simulate all human strats. From daytrading over swing trading to long term trading. MQ4 does NOT dictate the time frames.

I’m a programmer by profession, that’s the day job. But not mql. From reading some of your other posts, seems like we kind of have some similar ideas. Maybe we could bounce a few ideas around and see what we come with.


Ur welcome! letz see what we can do together. Like your avatar, by the way. Sort of south relaxed flair, which I love. :slight_smile:

How’d You know I was in the south? GA / USA here :slight_smile:

long 4 day weekend for me. Having a good time. Will email you later !

Don’t hurry. I will be also a bit busy the next weeks and maybe I have no access to internet all the time, as I am shuttling between Europe and the US.

How do I know you are in the south? My MT4 crystal ball. :wink: Seriously, lived a few years in the south and have a nose for that, I guess. Better nose than for the markets, lol. :rolleyes:

the good thing about a machine is they don’t get sick. wish I was one today! ugh!

Sorry 'bout that. Wish it will be better tomorrow! I got an infraction. Because I mentioned just friendly to drop an email via my contact obvious by this system, after you found some similar interests. Funny place here. I feel like at my old home country. They have the most signs in the world here on grass: “Playing for children forbidden! Parents are liable for their children!” Who are liable for the parents?

Where you from?
I guess exchanging email’s is kind of frowned upon. Can’t blame them realy. The more we interact on the forum the fresher the content. Helps the owners with the search engine optimization.

But we can toss some ideas around in here.

I was thinking about the coin toss thing. It’s 50:50 so suppose when you win you make $2 and when you loose you only loose $1 then that’s a good bet to take!

Simple forex signals like a moving average cross or price crossing a horizontal line or just a random entry, they all seem to average out to 50:50 in the long run. Though there is a bias based on trend that will throw the 50:50 off somewhat. And of course there is the house take, the spread, but that exists for all trades so we can eliminate that variable for the purpose of analysis.

So if forex is 50:50 and if your take profit is twice your stop loss then wouldn’t it be like the coin toss proposition mentioned above?

No? What makes it different? It’s more complex than a simple binary choice, yes or no, win or loose. Price can move against you, then turn in your favor leaving you behind stopped out. Price can vary up and down a lot in a given time frame, bracketed by a high and a low or an open and a close.

If it were truely 50:50 like the red or black on a ruolette wheel then no one could make money in the long run. The house advantage would wear everyone down. Yet there are pro traders who consistently are profitable for years on end. Therefore there are situations in forex where your odds are better than 50:50. The so called ‘edge’

So what are the edges? Can we define them objectively enough to program them? To have a machine trade them?

Just a few thoughts to ponder from one code slinger to another! :smiley:

Well I’m feeling a little under the weather. I’ll leave it at that for tonight,

Well TalonD,

I am sorry, but I guess we are not on the same page.

Have fun and always happy gambling! :slight_smile:

Doesn’t it depend on what you mean by trading? And what you mean by beating?

If a human and a machine only traded one pair, the human may win. But if the human and machine were allowed to trade all pairs, I don’t think the human has a chance. If we are talking equities, the machine would crush the human.

Some more ideas to think on robot guys. Maybe can be sharpened into an edge.

When you set stops and take profits you are saying price will make it the TP first. I think entering a trade based on an indicator is close to 50/50 - spread for the most part on shorter timeframes. Longer time frames can take advantage of FA and long term trend.

So when you move your SL out and your TP in you increase the likelihood that the TP will get hit first but when the stop gets hit it erases many small wins. This is what I am trying to address with $ based risk and looking at risk spread over many trades.

Look at a series of trades and a stop set at a $ amount. If you win the first few you get further from your $ stop and can increase the size of the trade($) or move the SL further from entry(pips) and keep a smaller TP(pips). That increases the chance your TP will get hit first. If you do both you increase the value of the trade and the chance it will succeed. If you move the $ risk(hard stop limit) amount up in steps as you balance increases you lock in profit. That’s my theory any way:D It works really well some times. the first 20 or so trades in my 10 to 100 thread made over 20% of my balance, risk was set at 4% a day.(operator error has seriously messed up that account) The levels of risk in that account could be scaled back with the same trades taken. I have also had weeks where I was up $ and down pips.

Can you programing whizzes help me come up with a way to back test and optimize this idea??