All new traders share the same dream, to attach a perfect trading robot also known as EA (Expert advisor) to their trading charts without doing anything else. The EA will take over the money management, it will avoid high impact news, avoid losses and make analyses on their own. But the reality is far far away from that. Finding a good forex robot that makes long term profits is a hard task.
Keep in mind that every forex robot is just a program that has been created with certain trading strategy using data schemes and back tests to prove the possibility to give some profits. Almost every strategy used by forex robots can also be traded manually. Most traders will use robots because they fear to trade by them selves. They just can’t turn off their emotions (greed and fear are two emotions that rule the financial markets). And for loses is of course much easier to blame an EA than yourself.
There are literally hundreds of different EA’s on the web, some are free and other commercial. If you’re totally new to automated trading I would suggest you to find some free EA’s on forums and try them out on demo accounts first. Don’t rush into buying a robot from some vendor for $400 because it promises 40% profits/monthly. Vendors use their marketing skills to attract naive traders and they just know the right words for getting in your head. Forex robots can be very costly from $100 and up to $2000 or even more and there is absolute no guarantee that they really work and create profits. Sure the vendors provide long 10 year back test, but there is a big chance that the data used was a bit filtered to get wished results. They also provide very profitable looking forward tests, but on demo accounts. Demo accounts can be great for learning and testing strategies, but the trading conditions are not the same as on live accounts. Demos have the perfect trading conditions without re-quotes, slippage, spread widening, etc. So you need to see live forward test from real trading accounts. I don’t want to scare you of or make you avoid automated trading (I’m using only robots with some manual intervention every now and then), so everything is not that bad as it looks like. But I just want to prepare you for the truth.
I’ve had the chance to test over 50 commercial EA’s, less than 3 were showing great results and less than 5 acceptable results. Not fine results, but only acceptable with some profits (far away from what was advertised). So finding a good EA, that will make constant profits is very hard. Especially if you need to buy them all just for testing.
And here is my tip, avoid grid and martingale robots that don’t use stop loses. The results will look great, but you will end up with a blown account in the end.
Article by HFRefund