I am well experienced forex trader, and now my hobby is to search for a stable and profitable automated systems- Expert Advisors. I am here to help everyone, that's why i want to share my knowledge.
Day by day, i hear a lot of horror stories from forex traders, who bought EA's and lost a lot of money.. Mostly they are new comers, so that's why i started thread here 'New Traders', I want that everyone, who even just thinking about to purchase any EA, please, think twice and read my summary about truth of using EA's...
True: There are many EA's that are pure scams.
True: Algorithmic trading by definition, will cease to be an effective strategy once many other people start using it. Further, the algorithm may fail independent of that if the assumptions it is based on change.
True: A lot of people lose a lot of money using cheap, hype marketed, EA's.
False: Everything in the EA world is a scam.
False: No one makes money with an EA. For every loser in a trade there is a gainer, though he may be using a different EA or non at all.
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.
So all the above being said, here's my advice:
1) If the product looks it's mass marketed, run away. A lot of EA's vendors also here at myfxbook.com, already banned me from their discussion page... You are asking why? Simple answer, because they are worried, that i will expose their scam...
2) If sounds like an infomercial, run away.
3) If the marketing pitch revolves around how much money OTHER people are making with the EA, run away.
What does that leave:
1) EA's demonstrate a high level of technical understanding AND provide EXPLANATORY evidence describing the what, how, and why of their strategy.
2) EA's that make sense. If you don't understand the strategy of the EA, don't use it.
Last, let me point out that any EA whose strategy in part of whole is based on being 'fast' requires that you get real, professional level hosting for that application. You're not going to be 'fast' running over a broadband connection at your home, no matter how many millions of megabits you think it runs at. Throughput and latency are related but are not the same. Traders need minimal latency, not a million megabits.
Those, that heed this advice are more likely to succeed at the expense of those, that don't heed it.
There is one Point I want to add: Why do EAs that have success suddenly fail? You say that the Problem is, that too many People start to use it. This might be true for news-spike scalpers like Million Dollar Pips or similar. This Spikes were just arbitraged out by the many People (and maybe trading companies?) that used such an EA.
But look at the Wallstreet EA, that's one that was heavily marketed and most People know. But it is still working. It had a large drawdown in 2014, but I am sure this is because the market has changed in that time. And this is the big big Problem with EAs: the market changes! The same with Forex Growth bot: This was a really good EA until 2013 where it had a 94% DD! And now it seems to work again.
This is the big Problem with EAs: You do good backtests, make a good 2 year Forward test, let it run with a high lot-size and suddenly it goes kaboom! That's why I think it is not possible to make heaps of Money with EAs
Yes. Very good point- market changes and i have found only a few vendors, who really understand that.. Every EA needs to be update settings time to time.
One of ea's, which i am currently testing, is such problem, when i test it with older settings and older back test history it works great. When i test old settings and current market situation, it works unstable.. So i assume everyone got my point.
Settings must be updated time to time, because market changes dramatically.
tankbeta posted: halft truth: some has a good ea with a good marketing skills also.
But just imagine: If some EA is so great why vendor need to waste his time for marketing, it's not a 5 min question to create eye catching web.? If EA is so great , he will earn profit from EA trades not just selling copies... That's the main idea of this point.
yes you are correct! If your the type of person who is selfish and doesnt care of sharing to other people specially your wonderful EA then you dont need marketing or selling.
but i think the logic why people sell some profitable EA is simple.
'if your good at something never do it for free' -joker
for me its right and acceptable that this EA developers sell there masterpiece specially IF it is really 'profitable' and they want to share it publicly. they deserve to get paid and get more money aside from the trades it makes. right?
AVERTISSEMENT SUR LE RISQUE ÉLEVÉ : Le trading de devises comporte un niveau de risque élevé qui peut ne pas convenir à tous les investisseurs.
Leffet de levier crée un risque supplémentaire et une exposition aux pertes. Avant de décider de négocier des devises, examinez attentivement vos objectifs dinvestissement, votre niveau dexpérience et votre tolérance au risque.
Vous pourriez perdre une partie ou la totalité de votre investissement initial. Ninvestissez pas largent que vous ne pouvez pas vous permettre de perdre. Renseignez-vous sur les risques associés au trading de devises et demandez conseil à un conseiller financier ou fiscal indépendant si vous avez des questions.
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