EA v.s. Human
Hello
Both EA and system can and will work in the current market.If you have noticed many systems and EA's have been sold with amazing backtest results and a smooth equity curve to the top low left to high right.
Then you buy the system or EA and soon it begins to lose money and you do not know why.
Markets change and your system or advisor is no longer valid as they were optimised to work in yesterdays market.When interest rate decisions or nonfarm report is released then you will see that 80 pip spike with no retrace and the market will continue upward for 200 pips.
Most advisor use a money management system called martingale or cost average which is opening many small position like.1,.3,.6,1.2,2.4 every ten points it goes away from first position until market reverses.Most EA use this incase the original indicator formula does not work it figures we keep opening more positions and still end in profit.
Only problem is when major news is released banks and billion dollar hedge fund traders move thier big money to the currency giving the smartest return for their money and the market follows.You will see a big spike buy or sell and it will seem like the market just took off.200 points later your EA has a margin call.
You must either cut the ea off when these annoucements are released or be able to optimize your ea to work in a different market.One minute market is going sideways and your ea is making money hand over fist.Next minute 300 pip trend straight up or down and the market has left your ea *behind*.
You have to reoptimize your EA or system to work in the current market and this takes experience.There is another alternative to all of this and I will tell you about it if you are interested?*another way to trade*
EA is used to complete the goals which cannot be accomplished by humans. When you are dealing in Forex trading, you have a chance of committing mistakes and even the smallest mistake can cost a lot of money. However, this chance is reduced by a massive percentage if you are using a Forex automatic robot. How does a Forex automatic robot assist you? First of all, it can sit for longer and make better decisions. This is because it works according to a certain criteria. This criterion is programmed by the trader.
This Forex automatic robot keeps you informed about everything. If a Forex offer according to your preferences is available in the market, a message will be sent to you. If your broker is looking after the operations, he would be informed about the deal.
Normally, the human mind makes mistakes when it is tired or when it is combating a pressurizing situation. However, robots do not face this problem because they do not face the problem of tiredness. They work according to a pre defined formula. In addition to that, these robots make predictions of the market performance as well. These predictions are not mere guesses so they provide a lot of help to the trader.
In my opinion, using these robots creates a lot of problems as well. If they are not programmed according to the market situation, they would damage the financial situation of the trader. In addition to that, they would reject all the good offers and accept all the bad ones. A good way to avoid this situation is to check the instructions given to the robot. Ensure that they are according to the market situation. You should remember that it is a machine and it cannot change its decision making criteria on its own. It works according to pre defined instructions. In other words, it would take a decision in every situation according to these instructions.
A good option is to have limited dependability on these robots. Use them for signaling giving purposes only. This will help you as your profits or losses would not depend on these machines. They can cater your trade activities when you cannot do so and inform you about the market situation. Relying completely on these machines is a not a good move. This is because they are machines and they can make big blunders if not equipped with the right instructions.
So, from the above points we can conclude that robots are good but could never be perfect.
Depends...which EA and which human are we talking about. But if we are talking about independent day trading I would always go with a human rather than an EA.
This is because most (not all) are based on bad trading and capital management. Look great on paper but the risk is way above anything one would/should want to take on.
If an EA is based on a system a human has traded profitably for some time then I don't have an issue with it. But most are not.
In general, human is more profitable in long trading period and EA is more profitable in short trading period.
what do you consider a short trading period?
what do you consider a short trading period?
Because in short trading period we have the same trading conditions and robot can handle them. It will be profitable till they will stay the same. As soon as we have new trading conditions - robot will lose your money.
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The past few days I have been studying on EA. Writing EA can automate our trade, and it can runs automatically all the time. This saves our time to monitor the screen. However E.A. is not perfect, so does human who does manual trade. I not sure what did the big player in forex market using (EA or manual trade?). My EA is not yet perfect. Here are some pros and cons I notice.
Human
Robot
So what do you think?