We Live By EA's (Catch a good inhale)
First let me clarify, that by EA I mean an automated trading system. In MT4 they are EA's.
We are system traders and I can assure you that automated system trading works. All of ours are based on some technical analysis, and are scalping (very fast, very frequent).
One thing I can assure you of is that ALL strategies draw down. All of them at some point draw down, they have too. They breathe at some cycle as they come into sync with their view of the market, and then go out of sync with the market. When they go WAY out of sync, they draw down hard, when they are partially in sync, they languish.
So if you buy a commercial EA, without judging whether it's "good" or "not", consider it will draw down at some point. What you want to see in your back test is the average drawdown, and then the biggest.
Once you know what the average and biggest drawdown is, you can try to wait before switching an EA into live mode until it is finishing up one of it's average drawdowns, and use a system-stop-loss (switching the system back to sim mode) when it exceeds it's largest drawdown.
If you think in those terms, then you will automatically adjust your money management to absorb average drawdowns. You should then think about adjusting your money management to allow for multiple EA's and THEIR average drawdowns.
So who knows if the day you purchase, then turn on an EA is the day she goes into drawdown. That would suck.
So what we do with our own EA's before we allow them to go live is let them breathe, find it's cycle, and trade into it's up cycle. So if you purchase an EA, you can do the same. Do a quick backtest to see where it is in it's cycle (if it's in the middle of a big drawdown, for sure wait), then based on where it is in it's cycle, make a decision.
I will tell you that we trade come really bad, bad systems, but we can recognize when they go into a strong period, and trade them as they go into the strong period, and let them go dormant until then.
Good luck in your search, just consider that ALL systems are bad, and ALL are good, just depends on when they trade with LIVE money : - )
Trader 5of7 @ TheCollectiveFX.com