Automated trading: Robots vs. analysis and research

For some reason people inclined to believe, that making deals professional traders rely on just their own skills, experience and foresight, and trading via expert systems is predestination of newbies, who have not acclimatized at the market and gotten hand in making decisions yet. But actually these systems – so called expert advisors – are being written mostly by gurus of the currency market for the purpose of optimization their work and increasing its effectiveness. So the fact of using autoassistant by trader can not point out if he/she has experience.

It is impossible to give an unambiguous answer to the question, what trading will bring more profit: manual or automated? As the saying goes, to each his own. But with no doubt it can be declared, that trusting a good advisor, you make your brainwork much easier (because robot is able to process the information in a fraction of a second) and save time for more pleasant occupations (because it is unnecessary to watch the market fluctuations during long hours). Moreover, utilization of mechanical trading systems lets exclude reflecting of psychologic factor on your bargaining, because experts act according to the distinct algorithm, and no any human emotion can make them deviate from it. Benefit of computer systems is also in that they are adjusted to take the maximum gain while risks are limited to the utmost.

But everywhere there are its hidden agendas, about which you should better learn beforehand than meet with them during the process of EA’s exploitation. First of all, you have not to rely on a robot completely, because every program is imperfect and able to make a mistake. Paradoxically, but a specialist coding software to automatize trading process can put human factor in it.

The second disadvantage of advisors is in the scantiness of processing the data by them: at the heart of making decision scheme there is estimation of a certain indicators’ readouts. Thus, EAs are allowed not to take into account rates of some indicators, which can be determinative in the concrete market situation. The consequence of that is a decrease of risks’ control by human, which is also imperfection of expert programs.

I should also mention a trader’s estrangement from the market among the defects of advisors. Automizing of bargaining let us handle without permanent analysis of currency movements. In this situation trader is keen on watching deals, which are made by a program, not his own trading.

The notion of “good advisor” implies not only impeccably written code, but in first turn, suitability of his usage for some or another trading instrument in one or another market state. If you want an expert system to make a good profit, it should be right for you. But how to find such a robot?

The best way is to code an EA by yourself and put the ideas of your trading strategy in it. If learning of the programming nuts and bolts is too hard for you, you should work for a while to study at least the main principles, which automated system follows during the process of making decisions. Profitability of chosen advisor directly depends on how good you will get on with it.

Do not let loud advertisement to impose the praised EA on you. Not always the gain is equal to the number of its preferences described in the promotional announcement. You should also be careful with the offers to download a mechanical trading system for free. Sometimes, resources providing such services break author’s rights of the real software creators.

Added by Daniel Shchagin,

InstaForex Clients’ relationship manager

You can also find useful articles from website, which is dedicated to expert advisors.

11 Responses to “Automated trading: Robots vs. analysis and research”

  1. azam81FX says:

    im search good EA. any ideas? :D

  2. forexbot says:

    any recommendations regarding profit-making advisors? i think, it’s good idea to test different automated systems and write an article about the results.

  3. forexindo says:

    I prefer trade myself. all these systems, which are sold, just a swindle!.. they don’t make profit, it’s leaves without figs

  4. aussie says:

    u r wrong. if u choose a robot, which is comfortable 4 u, it ll make huge profit

  5. Mike says:

    noobs think it’s easier to install automated system and it will make money itself, while they have nothing to do, just withdraw their money. but the thing is no advisor will help you untill you don’t understand trading principles.

  6. gaurhoth says:

    hi im from malaysia! :) thes blog is interesting. i like to read here! insta more articels!! :D

  7. MRTRTY674 says:

    EAs tend to become obsolete. You should always update it.

  8. @lbert says:

    any plans to post about coding EAs? it would be very useful for me.


  9. Gordeev says:

    I like it. Very informative. Thank you.

  10. admin says:

    Dear Albert,
    We thought about this. Maybe in future we will add an article about coding expert advisors.

  11. Windows says:

    Very informative)

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