Expert Advisor (EA) - Naive or Smart?

[sanjayanand]

It is often said that if something sounds too good to be true, it probably is. EAs seem to fall into that category. So here's the question ... Am I being too naive or smart when I say that if an EA actually exists that can consistently make money without us having to do any work (e.g. pay $100/$500/$1K/$10K anything) for an EA, install it on a VPS ($50-$500/month), and let it consistently churn out 1%/week in profits, why not just do that?

Sounds like a no-brainer, but I am yet to find an EA that does!

What am I missing? Do you have/use such a "miracle EA"?

Is it really possible to make 5-10% per month trading?

And if so, then how come everyone doesn't do it?

 

[geula4]

In my humble opinion...

In my humble opinion, perhaps there is a forex robot that can trade successfully. However, there are a lot that are just a scam. I would advise you to check the Review section of this web site and see what people write about them.

However, I think the best way to be profitable is not to follow a robot blindly but get signals of a professional trader or hire someone professional to manage your account.

The best option is that you learn how to trade by yourself and know why your risking your hard earned money of a certain trade.

 

[sanjayanand]

RE: Automation vs. Professional vs. Self

Thanks geula4. I appreciate your prompt response. I have looked at some of the reviews of EAs on this and other websites, and it seems like some of them work some of the time, but very few (if any) work all the time [unless of course, one is able/willing to spend $5-10M/year like Wall Street firms do to get their trading system developed and continuously tweaked/enhanced]. I therefore tend to agree with you that it may be best to learn to trade (e.g. swing trading on a daily chart for someone like me who doesn't have the time, desire, patience or inclination to sit before a computer all day waiting for specific trade setups or alarms), or to find a money management firm or newsletter (in equities, forex, options or futures) with a solid track record (over 1, 3, 5, 10 years), and to entrust one's trading to them. As may be obvious, I recognize the importance of active trading/investing (as opposed to passive buy-and-hold), and frankly I don't care what specific asset class it is as long as I can achieve 5%/month in returns (before tax). Again, I hope I am not being naive in thinking that one can actually achieve those kinds of returns (50%/year). Conventional wisdom is that 10% a year is a good return, but I have a feeling that there are many active traders who do way better than that. Correct me if I'm mistaken here (more or less than 50%?).

Bottom line: As I write this (and I may change my opinion later as I think more about this), I am inclined to go with the following rationale ... If I put my mind to it, I can become a good trader. But why bother? There are so many good active traders out there who have mastered these skills over a decade (or more), that it may be best to just have one (or more) of them manage my investments rather than me trying to learn/reinvent the wheel. Meantime, I can continue to do what I do best (in my own industry) rather than trying to learn in a year what may have taken 5-10 years for them to learn/perfect. It probably makes most sense for me to learn to trade if I am inclined to change my industry (that is, start a money management firm or fund). Sure, I would enjoy doing that, but from a financial perspective that would not be smart on my part since I would be setting myself back many years. I therefore like your response and your thoughts, geula4, and they resonate well my thinking: do what you know (unless you are afraid that what you know will become obsolete, in which case maybe trading is the way to go since that will not be obsolete anytime soon).

I welcome any other thoughts/ideas/suggestions that anyone else may have on this subject. As a "newbie" (I have "experimented" with trading stocks and forex) I am at the point where I would like to decide on a long-term trading strategy:

- do it myself vs.
- professional vs.
- automation vs.
- anything else?

Thanks in advance for any/all ideas/thoughts/opinions on this subject. - SA

 

[geula4]

I believe 5% a month is achieveable

Hi,

I do think that 5% is achievable if you are a professional trader with a good trading strategy or hire someone professional to trade for you. I don't know about forex robots if they can achieve such a return in the long run.

In the bottom line, it is your decision, and yours only, which way of trading forex is best for you!

I can send you info about how to learn forex for FREE by yourself in the internet and other great forex resources. If you're interested please contact me by email or Skype.

Hope this can help you make the right choice!

====================================
Email: forexforex3 AT gmail DOT com
Skype name: geula44

 

[Forexwatchman]

Bottom line: As I write this (and I may change my opinion later as I think more about this), I am inclined to go with the following rationale ... If I put my mind to it, I can become a good trader. But why bother? There are so many good active traders out there who have mastered these skills over a decade (or more), that it may be best to just have one (or more) of them manage my investments rather than me trying to learn/reinvent the wheel. Meantime, I can continue to do what I do best (in my own industry) rather than trying to learn in a year what may have taken 5-10 years for them to learn/perfect. It probably makes most sense for me to learn to trade if I am inclined to change my industry (that is, start a money management firm or fund). Sure, I would enjoy doing that, but from a financial perspective that would not be smart on my part since I would be setting myself back many years. I therefore like your response and your thoughts, geula4, and they resonate well my thinking: do what you know (unless you are afraid that what you know will become obsolete, in which case maybe trading is the way to go since that will not be obsolete anytime soon).

I welcome any other thoughts/ideas/suggestions that anyone else may have on this subject. As a "newbie" (I have "experimented" with trading stocks and forex) I am at the point where I would like to decide on a long-term trading strategy:

- do it myself vs.
- professional vs.
- automation vs.
- anything else?

Thanks in advance for any/all ideas/thoughts/opinions on this subject. - SA

First I would say that aiming for a win percentage of 50% a year as a newbie is impossible, and after 2 years it's still very unlikely. The first year should be spent trading very low volume and learning a large volume of info. You can actually start applying what you learn very early on and you should be able to create or learn a system within your first year that, with patience and discipline, should be profitable at least 60% of the time. Now just add in sound money management and another year of experience you have yourself a trading career in about 2 years. Of course everyone has limitations that goes into the actual commitment to this process I just described and most people don't have the patience or the will to follow through with everything, so they fall into that '90% failures' figure you here of all the time. But that's my opinion.

As far as the algorithm trading (aka EA's) you won't get anywhere with that unless you are the big boys who spend millions to create and maintain their black box systems and networks. I am of the inclination that you are a do it yourself type of person and you are simply making an informed decision before proceeding further. That's exactly the kind of personality that goes into making a retail forex trader so I would recommend you try to learn this gig on your own. Once you have the basics down, try a forex educational service that is low cost and builds upon what you "think" you already learned. This will solidify your education by giving you more insight from true experts on the fundamental and technical indicators that you have chosen for your system. I say low cost because there is no forex guru or magic system out there, it's honestly all about keeping it simple and disciplined, and thus big expensive courses come from big hungry sharks and failed traders. At some point start giving back by helping others out down the road. Hope that helps.

 

[sanjayanand]

RE: Forex Training

Hi geula4, thanks so much again for your prompt responses. Glad to hear that I am not way off in terms of strategies/expectations. After giving this some more thought, I am inclined to go with a professional trader/money management firm.

Should that change, and should I decide to trade forex/other myself, I will drop you a line to get more info/links re: training (paid/free). I appreciate your help.

 

[jcris522]

Thanks geula4.

(snip)

Thanks in advance for any/all ideas/thoughts/opinions on this subject. - SA

Your line of thinking is very rationale, but a bit naive to be blunt. As has already been said, if it was easy as plugging in an EA and sitting back and watching the money roll in, everyone would be doing it. Those that have done it sure are not going to put it out there for everyone else to use, but the forex market is much to volatile and sporadic for no human intervention. My post to this thread should shed some light on that https://www.forexpeacearmy.com/fore...lk/10052-picking-your-trade-pair-why-how.html.

As far as putting your money with a professional, you run into the problem that of all those out there offering money management, very few are actually going to bring you a good consistent return and those few typically require big bucks to get in and they take a good chunk of your profit. For example, I manage a fund, but the minimum deposit required is $25,000 and I am not even well known manager, those who have built a reputation require a lot more. Plus, my clients sign an agreement saying that the money is risk capital and that if they lose it, it will not affect their lifestyle in anyway, these are usually people with plenty of money.

Lastly is trading yourself. Once again if you want to be making 50% per year within a couple of months, you will have to pay a reputable mentor to train you and these also are not cheap. The guys who make big money trading forex typically are not going to mentor someone for a couple grand, it's just not worth their time. So if you do not have some capital to get professional training, then you will have to do as ForexWatchman says and that is teach yourself, read, ask, test everyday and you have to be consistent. It can get monotonous and tiring because you often go through periods where nothing seems to work, but if you are persistent you will eventually get there, things will start to click, but most importantly when you can consistently make money with a demo, open a live micro account with $300. When you can turn that into $600 you are ready to deposit more, but not until then.

 

[sanjayanand]

Hi Forexwatchman, I appreciate your insights, and yes, I agree with your general strategy, approach and suggestions. Based on everything that I have seen, read and heard recently (as part of my research on trading), yes, it does seem that (a) one should not rush into it, (b) focus on getting good at it (not making a killing day one), and (c) not look for the holy grail EA/software since obviously that does not exist (at least not in our price range). I am therefore inclined at this point to continue to do what I do while I will be looking for active money management firms/traders who can help my investments grow. In the meantime, I may educate myself a little on trading (not too extensive/elaborate, but rather something simple) so that I can do better due diligence in selecting and working with one or more professional traders who will manage my money for me. As you can tell, I am a hands-on person, but at the same time, I don't like to reinvent the wheel. So if there is someone out there who has been-there-done-it, I am happy to "hire" him/her/them (at a nominal cost, based mostly on results i.e. profits).

Once again I want to thank you and geula4 for sharing your valuable insights and experience. Maybe 3-5 years from now (once I sell my business), trading is what I may choose to do fulltime. That gives me enough time to familiarize myself with it and to hopefully even get good at it so that I can take the reins back from the professional(s) that I now propose to delegate my investments to.

On that note, if you/anyone has any ideas/suggestions re: good professional traders or money management firms that you can recommend, or possibly even active trader newsletters that have tried-tested-and-proven results over 1-3-5-10 years, that would be great. Or if you have suggestions of where I can look for such professionals and/or newsletters, I'd greatly appreciate it.

Thanks again, and have a great day!

 

[sanjayanand]

RE: jcris522

Hi jcris522, sorry I missed your post earlier. I see what you mean. And it makes a lot of sense. Based on all the great responses I have received from you and the others on this post, I am going to continue to do what I do (my current business), but at the same time (a) learn trading so that over the next couple of years I get good at it, and (b) continue to look for a good money manager just in case that is the route I decide to take. And I am glad to see/hear that looking for the "holy grail" EA/software is a useless endeavor. Good to know!

Thanks again everyone!

 

[Recognara]

hmm.... ok, this one is based on my friends response for usage of robot ok.

He said that the usage of robot/EA is ok. But then, you (AKA me here... ) should understand how robot was made for certain cycle of market. So, when those cycle is passed, it's pretty much giving you much faster toward your self destruction. That's what he said mate.

Without saying it's smart or not using this (I haven't used one, but backtested many... ), I just wanna share that here.

NB : My very first post.... HOORAAAY.....