Why do many EAs fail while the same strategy works perfectly in manual trading?

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Why do many EAs fail while the same strategy works perfectly in manual trading?
Manual trading lets us adapt, filter trades, and read the market in real time. EAs, on the other hand, follow strict rules — they can’t “think” like a human. Automation often reveals the gaps in a strategy rather than fixing it.

Have you ever automated a strategy and been surprised by the results?
 

I have thought about this many times.

From what I’ve concluded, it has to do with how the human brain works. It constantly learns (consciously or unconsciously) from any experience, ideally to improve. This directly correlates with trading.

Imagine giving the same set of instructions to different people—each individual will execute them in a unique way. Meanwhile, a bot will always perform them the same way.

 

There are 2 sides to every story─a coin's head versus tail, a religion's god versus devil, a trader's brain versus bot, etc.

Arguably, just as many or even more human brains fail versus bots. Keep in mind that it is the human who developed the logic of a strategy, even if the human is cavalier enough to use AI to code it. Therefore, the GIGO principle applies─garbage-in, garbage-out. At the end of the day, a trader either has a system of rules that yields profits or does not. That is to say that there is a scientific way to trade versus an anecdotal way to trade, regardless of whether the strategy is automated.

If the system is anecdotal, then it can't be empirically tested. A professional FX trader once said that you should be able to explain your system to a hermit that doesn't speak your language with nothing more than a chart and a pointer. Obviously, this was an exaggeration to demonstrate a concept, but the idea is that the rules of the system must be well defined. If a trader is unable to follow her/his own rules, then those rules are merely soft suggestions. This creates space for indecision, hesitation, delayed response, and emotional fatigue to intervene.

Also keep in mind that a bot never gets hungry, gets overcaffeinated, oversleeps, under-sleeps, sleeps at all (ok ok... Sleep()'s maybe), gets hungover, argues with its life partner, has diarrhea, gets sick, etc. All of those physiological/psychological aspects of being human have an effect on everything, including trading decisions.

More than likely, the folks that are unable to profitably implement their manual system as a bot are just that─unable to codify what it is, exactly, that they're doing manually. You don't necessarily have to be an expert programmer, but you do need to be able to identify the plain language logic in your system, research the code elements required to implement that logic, and understand how those elements fit together.

 
Ryan L Johnson #:

There are 2 sides to every story─a coin's head versus tail, a religion's god versus devil, a trader's brain versus bot, etc.

Arguably, just as many or even more human brains fail versus bots. Keep in mind that it is the human who developed the logic of a strategy, even if the human is cavalier enough to use AI to code it. Therefore, the GIGO principle applies─garbage-in, garbage-out. At the end of the day, a trader either has a system of rules that yields profits or does not. That is to say that there is a scientific way to trade versus an anecdotal way to trade, regardless of whether the strategy is automated.

If the system is anecdotal, then it can't be empirically tested. A professional FX trader once said that you should be able to explain your system to a hermit that doesn't speak your language with nothing more than a chart and a pointer. Obviously, this was an exaggeration to demonstrate a concept, but the idea is that the rules of the system must be well defined. If a trader is unable to follow her/his own rules, then those rules are merely soft suggestions. This creates space for indecision, hesitation, delayed response, and emotional fatigue to intervene.

Also keep in mind that a bot never gets hungry, gets overcaffeinated, oversleeps, under-sleeps, sleeps at all (ok ok... Sleep()'s maybe), gets hungover, argues with its life partner, has diarrhea, gets sick, etc. All of those physiological/psychological aspects of being human have an effect on everything, including trading decisions.

More than likely, the folks that are unable to profitably implement their manual system as a bot are just that─unable to codify what it is, exactly, that they're doing manually. You don't necessarily have to be an expert programmer, but you do need to be able to identify the plain language logic in your system, research the code elements required to implement that logic, and understand how those elements fit together.

totally agree with you.
Also what if you can add Machine learning to the process so the bot can learn from it's mistakes adjust and tweak the strategy a little bit so it can fit the market continues changes, that's what I am trying to achieve through my project this can simulate a human brain as much as possible.
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