Forex robots and why they don't work (unpopular opinion)
I have been trading the forex and CFD's market for over 18 years and like many traders I have lived in hopes of having fun at the Caribbean while my trading robot does all my trading for me. The bitter truth is that the majority of the robots (EA's) created for 100% automated trading will most likely not be consistently profitable. Read this again! I am not saying that there are no consistent robots, but the majority will not be consistent and below are some of the reasons why:
1.A greater majority of EA's (robots) are based on technical analysis and as a result whenever news or very significant fundamental events hit the market the robots are usually not built to handle such situations. and these events happen quite often and therefore jeopardize the consistency of the software.
2. It is easy to test an EA using the backtester and celebrate the result shown. It is important to note that the spread used for backtesting is fixed. In real market situations, most brokers use floating spreads and most of the brokers widen spreads during news events or at certain times of the day. Slippages also occur in-between and the EA may not have been made to handle these.
3.Broker differences play a vital role is making sure the EA's don't work as planned. A typical example is the GBPNZD on H1 (December 1, 2022). The first image shows one broker that has a spike over 300 pips while the second image is for the same period with another broker that did not make the 300 pips move for the same date and time.
Some traders may want to refer to this as broker manipulation but in reality this could have been from the liquidity provider.
I have worked with so many brokers and I was a general manager in one of the brokers I have worked with and I can assure you that the the risk management strategies of many brokers are very aggressive and could affect the way you want your EA's to work
These are just a few factors. There are more but these are the major factors that make your EA's to fail
Next time when you are building an EA try to consider these factors above and find ways to boycott their effects on your EA.
Best regards.
It is a sad truth that most forex robots is been affected by high influence fundamentals which in some cases could be properly managed and could be avoided but looking at the above chats its a clear confirmation that brokers has its on way of manipulating the market and hunting stop loses.....
Developing an EA with these facts been considered is a great way of been profitable in trading with less risk, thanks for sharing this insightful information sir....
It is a sad truth that most forex robots is been affected by high influence fundamentals which in some cases could be properly managed and could be avoided but looking at the above chats its a clear confirmation that brokers has its on way of manipulating the market and hunting stop loses.....
Developing an EA with these facts been considered is a great way of been profitable in trading with less risk, thanks for sharing this insightful information sir....
Hunting stop losses could also be one of the reasons but is there enough proof that they (brokers) hunt stops?
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I have been trading the forex and CFD's market for over 18 years and like many traders I have lived in hopes of having fun at the Caribbean while my trading robot does all my trading for me. The bitter truth is that the majority of the robots (EA's) created for 100% automated trading will most likely not be consistently profitable. Read this again! I am not saying that there are no consistent robots, but the majority will not be consistent and below are some of the reasons why:
1.A greater majority of EA's (robots) are based on technical analysis and as a result whenever news or very significant fundamental events hit the market the robots are usually not built to handle such situations. and these events happen quite often and therefore jeopardize the consistency of the software.
2. It is easy to test an EA using the backtester and celebrate the result shown. It is important to note that the spread used for backtesting is fixed. In real market situations, most brokers use floating spreads and most of the brokers widen spreads during news events or at certain times of the day. Slippages also occur in-between and the EA may not have been made to handle these.
3.Broker differences play a vital role is making sure the EA's don't work as planned. A typical example is the GBPNZD on H1 (December 1, 2022). The first image shows one broker that has a spike over 300 pips while the second image is for the same period with another broker that did not make the 300 pips move for the same date and time.
Some traders may want to refer to this as broker manipulation but in reality this could have been from the liquidity provider.
I have worked with so many brokers and I was a general manager in one of the brokers I have worked with and I can assure you that the the risk management strategies of many brokers are very aggressive and could affect the way you want your EA's to work
These are just a few factors. There are more but these are the major factors that make your EA's to fail
Next time when you are building an EA try to consider these factors above and find ways to boycott their effects on your EA.
Best regards.