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Automated Trading – good or bad for your money?

 

Automated trading meant to be easy, quick, and stress-free. We want to automate tasks so we can enjoy life or shift our attention to something more important. Any MetaTrader user dreams about Expert Advisor. We think that robots can make more money than we do because we have to sleep and robots don’t. But how good and easy EA is? Let’s see.

1st point.

First of all, when you are switching to automated trading, you’re doing it for maximising profit and minimising the time spent in front of a computer. Reality looks different. We don’t trust machines, and as a result, we are worrying that the computer will make a mistake and we will lose our money. Instead of relaxing, we are checking if the machine is opening a position in the right place. Subsequently, you are sitting in front of the screen and supervising EA, which meant to do work for You.

2nd point.

The second problem when you want to automate trading is the EA settings. Have a look at two pictures below.

 

automated trading complicated settings example 1

 

EA complicated settings 2

What you see are screenshots of the two most popular EA for MT4 platform. Looking at all those settings, please tell me – do you know what they suppose to do and what values you should use to make EA working correctly? To make it more difficult, one of them says that YOU SHOULD NOT USE DEFAULT VALUES. Surely, the developer of such an application would like the user to have a positive experience while using this product. By placing so many parameters to set up, automated trading becomes painfull. We are getting confused before we even start, and trading without a high level of concentration can lead to financial loses. Mass production is good for low prices but brings to market low-quality products and complicated settings that have to fit everyone.

3rd point.

The third remarkable fact is the price of EA. Is 400$ a reasonable price for application, which meant to make you tons of money? I think it’s a bargain. But remember – If something seems too good to be true, it probably is too good to be true. Professional traders spend 1000’s of dollars for good trading strategy ( which they keep secret ). Furthermore, investment funds spend millions of dollars on trading algorithms (which are monitored by people) to make a 20% return on investment. Now, do you still believe 400$ is a good price?

 

4th point.

Last but not least is the fact of how sellers advertise their products. When you go through product images, you will see that all of them are showing perfect results. Just like pictures below:

 

automated trading results graph

 

EA results

You have to know that what you see is a result of a few months or a few years of trading. The outcome is based on historical data and has been achieved using a trial and error method; in summary – the seller will tweak settings to the point when all works perfectly. REMEMBER – seller is using past prices in the strategy tester. You have to set your EA to work with market conditions that haven’t happened yet. Most probably, you will have to adjust your Expert Advisor a few times before you make it work. For this reason, you will always feel a bit of uncertainty.  In short – you have to guess and believe that all will work, and You will make money.

 

Trading nowadays is so complex that humans alone can not process all data coming from the financial market. We use computers to process data, but machines have no ability to “FEEL” the market. What we can do is to work together. The good trading strategy supported by proper trading tools can give You excellent financial results.

 

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About Wojtek

Passionate software developer and trader, founder of PipEze.com