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EA vs Managed Account? Pros vs Cons
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FXhelpers

Пользователь с Feb 27, 2011  8 сообщений FXhelpers Mar 05 2012 at 07:16
What are the pros and cons of choosing an EA?
What are the pros and cons of choosing a Managed Account?
Which one is better? Managed Accounts or EAs?
Do we want a trader behind the wheel to watch out for significant moves or do we prefer an unemotional program to make non discretionary decisions?

Thank you for your input!

Michael

paulng

Пользователь с Aug 13, 2010  43 сообщений Paul Ng (paulng) Mar 05 2012 at 08:15
Interesting topic and questions. If you get many detailed answers and insights, you'll uncover a lot of dirty secrets in the forex industry :)

"The first rule of forecasting should be that the unforeseen keeps making the future unforeseeable." - David McCasland (January 5,2012, Our Daily Bread)
FXhelpers

Пользователь с Feb 27, 2011  8 сообщений FXhelpers Mar 05 2012 at 15:35
Thanks for the feedback Paul Ng!

Any secrets or experience you can share from your own journeys?

vinhlq

Пользователь с Dec 18, 2011  2 сообщений Vinh Quoc Le (vinhlq) Mar 06 2012 at 07:09
Do you ever believe that there is a CHEAP MONEY PRINTER at all?

Before earning, try keeping your money.
paulng

Пользователь с Aug 13, 2010  43 сообщений Paul Ng (paulng) Mar 06 2012 at 12:44
Hmm... most forums already have debates on the pros and cons, so I'll just give my 2cents worth in a very short summary.

1) EAs that are stable, profitable, and sustainable, will never be for sale. Readers should write their own EA, or collaborate with others to develop their own EAs and systems.

2) Managed accounts are definitely better than buying an EA. When choosing a managed account, the broker and websites such as myfxbook have the trade log and can match with exact magic numbers, and trace the entries, SL, TP, order modifications. So, if the system gets a lot of attention and more money gets attracted to it, everyone else will have a vested interest to play against it. Example, playing pokers with your cards laid out on the table, even if you have a strong hand, the odds are against you the longer and bigger you play.

3) All systems have their weaknesses. The designer of the system is the best person to intervene, enable or disable toggles, but the difficulty lies in finding such a person who acts in the best interest of the investors.

4) There is only one rule in OTC forex. Look for the loser. If you can't find one, you are the loser. As a financial derivative, all trades have a counter party in order to get filled, that's how one will win and the other will lose.

I think it will be more meaningful to readers and forum participants here to experiment, audit, analyse the situations I describe below:

1) price freeze and frequent disconnections = poor quality of service to customers. Brokers should stop blaming the ISPs and other factors. I'll just stop short of saying it's market manipulation.

2) simple experiment scenario: send 3 orders at Market.
Buy1=ordersend( , , , , Ask, );
Buy2=ordersend( , , , , Ask, );
Buy3=ordersend( , , , , Ask, );

All orders are instantly sent to the broker. The subsequent response can reveal a lot about your broker. If every order has a consistent lag of 1-3 seconds, it raises a red flag (front running of customers' orders). If price turns up the moment your 1st order goes in, and the other 2 orders at Market 'fizzle off', then the broker has poor execution. A Market order must get filled. If price goes down against you, all 3 orders will surely get filled - interesting to take note of the filled prices and time stamp. If all are filled at exactly the same fraction of a pip (5th decimal place for EURUSD, for example), and the time stamp has a consistent delay between orders, that means the broker has a conflict of interest with the customer. On most occassions during active market hours, all 3 orders should have different fill prices if the time stamp is different, depending on the price action. Playing with the orders at the back-end can be considered Market Manipulation and Market Misconduct, disadvantaging the clients that they are supposed to serve (thereby receiving their license). If any trader reading this has had such experiences, you may want to consider video screening the chain of events and send the evidence to the relevant authorities. For brokers that are using such dirty tricks, it is very easy to reproduce the cause and effect on video, just make sure your lot size is the smallest possible for such experiments.

Any of these situations can lead to disciplinary action or cause a revoke of license. It is a good thing for anyone interested to trade the forex markets. At least when we do a internet search, there will be fewer websites to look through and chances are the remaining ones are the proper establishments for us to regard as a professional and ethical business partner.

I won't consider these insights as 'secrets', just that every time an honest observation appears on the internet, it gets swarmed and discredited by lots of other posts. No bonus points for guessing who may be motivated to reply against my post. Everywhere we click, there's spam advertising, referral agents, introducing brokers, sure-win EAs, etc etc. It's overwhelming the internet.

I'm not out to become a public enemy, just asking readers to do their own homework.

Peace.




"The first rule of forecasting should be that the unforeseen keeps making the future unforeseeable." - David McCasland (January 5,2012, Our Daily Bread)
zeidoon

Пользователь с Mar 07, 2012  2 сообщений waed (zeidoon) Mar 07 2012 at 22:17
I think human mind is more powerful than EA. An expert trader knows when to enter the market, when to sell, and when to buy. What do you think ??

amantrader

SCManagement

Пользователь с Mar 06, 2012  17 сообщений Smart Capital Management GmbH (SCManagement) Mar 08 2012 at 19:26
i agree to Paul Ng and not to waed. Human mind is the worst enemy of traders. a useful combination where the systems executes automatically and is monitored by humans that know when and how to interfere should do the trick. i have been in the business for more than 10 years and i have seen many, many manual traders - and i have not really seen winners in the long term. i started seeing winners when EAs became popular - although 99% of the EAs also make a loss in the long run because some bucket shops looks for some fools in order to get the money.

money-management with a win-win
paulng

Пользователь с Aug 13, 2010  43 сообщений Paul Ng (paulng) Mar 10 2012 at 15:56

   zeidoon posted:
   I think human mind is more powerful than EA. An expert trader knows when to enter the market, when to sell, and when to buy. What do you think ??

amantrader


In a sense, humans are far better than the EAs available today. But we do get tired, emotional, distracted, and we need time with family and friends, and to sleep. So the robot becomes a very good assistant in our daily activities. It does not argue or play office politics, will not resign, cannot steal our business or customers, and it maintains 100% discipline and risk management.

Risk management alone is the golden rule that cannot be broken. If you just make a careless mistake and exceed your permitted risk, your career is over. EAs, managed accounts, manual trading, they all have their pros and cons. A suitable match between the trader/investor and the available tools becomes the deciding factor. Everyone has their own preferences, as well as risk appetite.

If you have a good assistant, you do not need to sit at the trading terminal all day. You can set alerts, log-in via remote and manage your trades as though you're at your work desk. You can also have many choices, like manual opening of positions and letting the robot manage them, or making the robot look through 10 charts every second. In summary, technology is meant to help us.

My sincere apologies to those who have lost their jobs to robots. This is a global trend regardless of industry, mechanical and routine tasks are getting replaced by automation. What we need is to think better and work smarter.




"The first rule of forecasting should be that the unforeseen keeps making the future unforeseeable." - David McCasland (January 5,2012, Our Daily Bread)
nasco

Пользователь с Oct 27, 2009  28 сообщений Nasco (nasco) Mar 14 2012 at 00:16
When it comes to trading your money it is impossible to control your human emotions. Therefore, since the Forex market is basically computers trading computers, it is always less stressful to fight fire with fire. But, most traders are lazy, and usually quit once the live account is blown up.. in less than 90 days.

Stop fooling yourself, find the right automated system, or just contact me.

Relax, and Get Paid!
Kami486

Пользователь с Jan 16, 2012  30 сообщений Kamran Zaheer (Kami486) Mar 30 2012 at 17:59
Look at my portfolio and you will be forced to agree that AUTOMATED Trading is the best option

To become the biggest fund manager of this world
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