Profitability in EA's

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Hi,

Although this is my first post in this interesting forum, I am a becoming more skeptical about the usage of EA's in the market. I know there is enough liquidity in major markets to have such bots but my question rather focuses on the usage of them. Are EA's reliable on average? Also do you, as a programmer, use money management formulas to reduce risk? I always used automated scripts to calculate possible entry and exits but leaving it all to a program scares me a bit. I am sure some EA's use good formulas and trading "tactics" but I still think in some cases the human touch (feelings apart) could help in an emergency situation. My bottom line question is of course: Have you seen a great increase in either losses or winnings using such systems compared to traditional trading?

Thank you all your input !

 

> Are EA's reliable on average?

Depends entirely on who wrote them and how well..!

> use money management formulas to reduce risk

Naturally - plus the EA doesnt get.. excited and so doesnt bend/break the lot-sizing rules in its system!!

> Have you seen a great increase in either losses or winnings using such systems compared to traditional trading?

See 'Making actual money with an EA'

> the human touch

Comes into play when assessing general market conditions to fine tune lotsizing instructions to an EA, fade out a trending EA when volatility reduces etc, etc

Good Luck

-BB-

 

BB has said pretty much of what I was going to respond. However, a couple of additional points:

> the human touch (feelings apart) could help in an emergency situation

My own philosphy here is that the human touch would certainly come into play if the emergency situation relates to the technology rather than the trading conditions. In other words, never treat an EA as a completely unattended solution; rather build in email notification (for example) so you know when to step in (when emails either don't arrive or notify errors). If you needed, for example, to cease trading under (for example) volatile trading conditions, then I'd prefer to build a Vix indicator into the EA so that it makes decisions consistently.

> Have you seen a great increase in either losses or winnings using such systems compared to traditional trading?

I have seen EAs produce improved results over manual methods, yes. A system I recently automated had been prone to the occasional (infrequent) human error whilst being manually implemented. The implementation of my EA significantly improved profits.


CB

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