Views on Copy trading - Good & Bad
I'm keen to develop a profitable EA, but so far my personal EA's have not proved profitable enough to move from my Demo acc to my Real account. They need more work. I was thinking about "copy trading" until my EA has proves itself reliable enough.
I'm interested to know what experiences people here have had with copy trading , "good and Bad". Any tips or warnings for someone who's never done it before?
Cheers.
Remember that anybody can publish a signal without any skill whatsoever. Picking a good signal require just as much skill as trading yourself, automated or not. After a while you can see what strategy is employed by just looking at the balance/equity curve.
Hi @Dashoshea, I use copy trading to supplement my own EAs, and have been through the journey of understanding how to best use these. I think the best way to think about any signal (either on the MT4 platform or elsewhere) is to consider the signal like a single asset you are investing in.
@Enrique Dangeroux is right that any old fool can publish a signal, and that fool can then be potentially in charge of your future wealth. Be very careful when picking a signal. For me, one of the most important figures a signal posts is the number of weeks it's been running. If a signal has been around for 2 years, I'm instantly more interested than 2 months. Secondly, I look to the average holding time, and the historical position size vs the balance/equity at the time the position was opened. Anyone taking positions larger than 0.01 lots per $1,000 is either VERY skilled, or too dumb to realise they are walking into an account blowout someway off into the future.
Also, I would always recommend to err on the side of caution. Begin with 10% equity allocated to the signal. Watch it for a month. see if you are comfortable with the way it trades. Does it stay in its positions too long, do the positions sit in negative too long for your liking? If not, and you are happy with how it rolls, up the % allocated once a week, every week, until you are at a level that you are comfortable with (returns vs risk & position sizing).
Most signals are junk, be very careful. There are a handful on here worth their salt. I've tried quite a few too, but with the above cautionary attitude, I've yet to blow an account with one poor choice. I now use only 1 signal that I personally am comfortable with. If you search the signals and arrange by weeks, or number of subscribers, you would find it in the top 5 there.
Good luck @Dashoshea!!
Hi @Dashoshea, I use copy trading to supplement my own EAs, and have been through the journey of understanding how to best use these. I think the best way to think about any signal (either on the MT4 platform or elsewhere) is to consider the signal like a single asset you are investing in.
@Enrique Dangeroux is right that any old fool can publish a signal, and that fool can then be potentially in charge of your future wealth. Be very careful when picking a signal. For me, one of the most important figures a signal posts is the number of weeks it's been running. If a signal has been around for 2 years, I'm instantly more interested than 2 months. Secondly, I look to the average holding time, and the historical position size vs the balance/equity at the time the position was opened. Anyone taking positions larger than 0.01 lots per $1,000 is either VERY skilled, or too dumb to realise they are walking into an account blowout someway off into the future.
Also, I would always recommend to err on the side of caution. Begin with 10% equity allocated to the signal. Watch it for a month. see if you are comfortable with the way it trades. Does it stay in its positions too long, do the positions sit in negative too long for your liking? If not, and you are happy with how it rolls, up the % allocated once a week, every week, until you are at a level that you are comfortable with (returns vs risk & position sizing).
Most signals are junk, be very careful. There are a handful on here worth their salt. I've tried quite a few too, but with the above cautionary attitude, I've yet to blow an account with one poor choice. I now use only 1 signal that I personally am comfortable with. If you search the signals and arrange by weeks, or number of subscribers, you would find it in the top 5 there.
Good luck @Dashoshea!!
Thanks for the Advice Guys.
Some EA's look extremely profitable, but you can see by the win/loss size and inconstant balance/equity curve that some of them are erratic, and could hit you hard if they had a short bad run. I saw one that looks very consistent and profitable, but after closer inspection it didn't have any losses, which seems to good to be true, leading me to believe it had no normal stop loss protection. I'm thinking when something like that does bite you, it'll be bad !
I'll definitely take my time checking the signals out and test it for a bit 1st.
Although you have the cost of the signal to cover, was your profit percentage comparable with what was projected on the "Signals" EA statistics ? I'm just thinking with the delay difference between you and the EA signal? or any other variables besides signal cost that change your profit?
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I'm keen to develop a profitable EA, but so far my personal EA's have not proved profitable enough to move from my Demo acc to my Real account. They need more work. I was thinking about "copy trading" until my EA has proves itself reliable enough.
I'm interested to know what experiences people here have had with copy trading , "good and Bad". Any tips or warnings for someone who's never done it before?
Cheers.