Facts and Myths bout Expert Advisors

Vitautas posted:

arigoldman posted:
I'm not sure about the whole EA thing... I think i know markets better than a senseless machine. Just my two cents.

You are right. I think if you want to trade trends, you better do it manually. But if you trade retracments in a slow, retracing market, it can be done by an EA.

There are no problems for EA to trade also trends...
All depends what is EA main idea.. Some will work better when there are strong trend, some will work with pairs which are ranging..

Valid points William!

Why sell an EA?
Traders look for EA's because it is cheaper than signal service and doesn't require sharing profits from a managed account. This allows the developer to sell a version of the strategy for public awareness. It is easy to drive traffic to your site by selling a system. It is much harder to sell signal services and managed accounts until your branding is complete. @CrazyTrader 100% correct for the reasons I outlined above.

Why systems fail?
Normally the original design of the strategy has poor RR ratio. For example risking 200 pips for 10 pip take profit. You will have plenty of winners but just a few losses will wipe out 40-60 winning trades. That isn't long term survivable system unless you have much patience and a very low risk money management being used.

Does updating really solve the issue?
No, of course not. If your strategy was designed around poor RR, you can not update the parameters and expect a strategy to evolve unless you focus on the weakness of that system ( the RR ratio). By the time you have an updated system that will continue to work, most likely you have a new strategy quite different than the original design. On the other hand, if you truly have a good RR ratio then yes, small optimizations and updates can help to maintain your edge.

RedRhinoLab posted:

Why systems fail?
Normally the original design of the strategy has poor RR ratio. For example risking 200 pips for 10 pip take profit. You will have plenty of winners but just a few losses will wipe out 40-60 winning trades. That isn't long term survivable system unless you have much patience and a very low risk money management being used.

Is it what happened to your FX viper s accounts?

Hello guys,

I haven't been here for a while, hope that everyone is fine and
that my suggestions really helped someone..


Trade wise and safe!

Regards,
William

Vitautas posted:

arigoldman posted:
I'm not sure about the whole EA thing... I think i know markets better than a senseless machine. Just my two cents.

You are right. I think if you want to trade trends, you better do it manually. But if you trade retracments in a slow, retracing market, it can be done by an EA.

Nah, I prefer to trade manually. Most EAs are works in a certain market condition (unless if you have an ability to reprogram it, you can fix it and make it works in some market situations)

JenalAripin posted:

Vitautas posted:

arigoldman posted:
I'm not sure about the whole EA thing... I think i know markets better than a senseless machine. Just my two cents.

You are right. I think if you want to trade trends, you better do it manually. But if you trade retracments in a slow, retracing market, it can be done by an EA.

Nah, I prefer to trade manually. Most EAs are works in a certain market condition (unless if you have an ability to reprogram it, you can fix it and make it works in some market situations)

Cuz it would be much better if you trade manually and improve your trading skills more. As long as they never stop learning, they could survive in most market conditions...

William82 posted:
Hello guys,

I haven't been here for a while, hope that everyone is fine and
that my suggestions really helped someone..


Trade wise and safe!

Regards,
William

Welcome back, William! 😄

I dont know why everyone is so stuck in this search for the holy grail. With the amount of time and money people invest in searching for the right EA they could learn enough to be successful traders of their own. EAs are programs that are reading indicators the same as an individual. The difference is because it is a computer program, it is only good as long as the conditions it was programmed for are good. The moment the market makes a huge change, and it always does, the EA begins to fail. The difference? If you are manually trading you can make corrections, if you are EA trading you might come back to an account that has been stopped out.

Just make sure you find an EA that follows your trading strategy and find ways to minimize your risk. An EA traded on a demo account only, in my opinion is garbage. Why if it is such a successful EA, is the developer afraid to commit REAL funds to the EA? Why should you trust an EA that the person who created it doesn't even trust? Why should you commit funds to an EA that the programmer didn't even commit funds to? And an EA that has too much marketing behind it, likely is a hype making machine rather than a money making machine. Use caution and good sense when choosing the EA to use and dont allow excitement or greed to cloud your good judgement.

William82 posted:
Hello,


Half Truth: Retail traders can't compete with professionals. True for a lot of reasons, but false in the sense that you shouldn't be trading with a broker that handle professional traders, only other retail traders like yourself.




Best regards,
William

Hi William,
Would you be kind enough to answer why your statement above should be followed. What is the difference between brokers?

In my opinion, you are not competing against other traders. Both pro and retail traders trade the same prices on their charts regardless of the broker you use. Your statement makes no sense.

Russell

Good points, William.
Here's my 2 cents.

True: an EA is profitable first of all for the person who designed it, because it reflects the trading style that the trader already masters. The EA is just making trading easier for its owner.
True: (related) one must learn to trade first, then decide whether to buy/use an EA to automate his trades.

In other words, I'm using my own EA which is my Holly Grail. I'm also selling it, if it matters, but I have no guarantees that it will make you any $$$. In fact, you might lose.

I've used an expert advisor only once since I started trading (and by once I mean one expert advisor over the period of several months) and it was with varied success. In the end I gave up on the idea and decided that I preferred to trade manually. I suppose I could've tried with another one, but I preferred to have full control over my trading decisions.

I know this post is a little bit old but I just want to give a perspective you guys haven't talked about. Maybe it's just that you haven't experienced creating a successful EA and wanting to sell it.

''Why would anyone who creates a successful EA sell it?''
That's pretty simple actually, at least for my situation. If it works & makes money, it is good enough to be sold & have your name on it. + If you are in a bad financial position regardless if the EA makes 50-150% a yr, you are not going to make a living for yrs if you start with 500$. So selling the EA can be an opportunity to make a living as your trading account is growing.

''Trading manually is better because you can make better decisions''
Well... why is no one considering the fact that the EA can be just a tool for your trading? Why is no one considering that you can still manage the trades and close them when you think it's the right time? I still have control over the trades & when I see it might be a better choice to close a trade early or even not let the EA enter the trade, I do it, it's not like my EA gets made at me... I do however regret it afterwards and rememeber why I created EAs to trade my strategy for me without emotions lol :D

I wonder if anyone has considered the possibility that the reason why most traders are losing money all the time is because they are using old indicators & strategies in a market enviroment that is run by algorithmic trading software. The difference between a winning trader and losing trader is that the winning trader knows how to manage his losing trades ;) <--- just a sentance I heard that got me thinking out side of the box and brought me to this point.

I hope my perspective gives a better understanding on this issue.

The paradox.


buyers want autopilot profits ( no work on their part)
seller wants stable profits (updates, improvements)

You just can't have both.

If you want a robust strategy(automated) it will take parameter adjustments, market know how, and smart money management to make profits over the long term.

A hardcoded black box will fail over the long-term ( doesn't adapt).
A system with customization requires an experienced trader to maintain a market edge.
 

Thanks for your thread, man. It helps to sort out many things due to which I was in doubts.

I have very mixed feelings on expert advisors. On one hand I've seen people make excellent profit using them, on the other hand still feel very mistrustful. I don't like that something else makes my decisions for me.

From my experience , if you understand the strategy, and you are the one programming it, than you have no reason to not trust your own code. Just like with any programming, you have to test and debug until it does what you demand of it.

According to owners and exowners of EAs, one can rely on such programs no more than for a few months, so if this is true and you consider buying it, consider also expected ROI for a few months and whether it worth that.