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Your opinion about EA's

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Jan Ceulemans
149
Jan Ceulemans 2015.04.30 08:14 

Dear fellow traders,

 

I am going to ask you most probably a very stupid question and most probably this question was asked many times before but I am willing to take a risk here.

Do Expert Advisors really work in the long term? Do they work at all? I have used them in the past just to see my accounts blown up in the end.

After taking a serious course I started trading manualy and over the years it became clear that serious forex traders would advice against the use of EA's.

However, here in this community many of those EA's are being promoted. Some even extremely expensive too.

My question is then, do these things work? What is the truth about EA's? 

Stuart Browne
5812
Stuart Browne 2015.04.30 08:57  
Hi Jan

Mate, you just opened a can of worms ;-) And I predict that the responses will probably be 50/50 or maybe a little more toward the EA side given the type of traders on this site.

I do think it's far too much of a blanket statement to say serious forex traders advise against EAs. There are plenty of billion dollar firms who employ very very well payed Quants to write trading robots, just as there are also a huge amount of High Frequency Trading firms doing likewise.

I personally do both but by far the majority of my trades are from my bots. Manual trading is great fun and can be very profitable but I can't stay up 24/5. My bots don't need sleep or coffee breaks :-) But it's far from a "set and forget" method of trading. They need to be monitored and tweaked as the market conditions change, as it always does. What works today will not necessarily work tomorrow.

Anyway, that's my 2cents. Looking forward to hearing others ideas.

Cheers
Stu
luo jun
142
luo jun 2015.04.30 13:02  
I like EA because it has no emotion.
Jan Tarnogrocki
6335
Jan Tarnogrocki 2015.04.30 16:01  

How do you want to know if a strategy is profitabel without backtesting it? How do you want to backtest a manually strategy in an objective way including enough trades to make the test statistically valide? I think that is not possible.

I would trade with an EA if I have a reliable and valid backtest and out of sample test and it shows good results over a long time periode.

I don´t believe that such a strategy will stay profitable forever. But long enough to improve it or to find another one that will be replacing it. 

Mohamed Elsayed
1719
Mohamed Elsayed 2015.06.27 11:26  
As long as the 'logic' is right, the EA can be profitable. All EAs are basically designed from the 'manual trading' idea, but convert it into robot. Some strategies (both manual or EA) need to be changed from time to time due to market condition, some can go for a long term period. It all comes back to the 'logic' or trading system itself.
Marco vd Heijden
Moderator
4700
Marco vd Heijden 2015.06.27 12:00  
Jan Tarnogrocki:

How do you want to know if a strategy is profitabel without backtesting it? How do you want to backtest a manually strategy in an objective way including enough trades to make the test statistically valide? I think that is not possible.

I would trade with an EA if I have a reliable and valid backtest and out of sample test and it shows good results over a long time periode.

I don´t believe that such a strategy will stay profitable forever. But long enough to improve it or to find another one that will be replacing it. 

It depends on the EA you can have EA's that self-backtest and auto adjust settings based on the available data these are self adjusting adaptive EA's the back testing is build into the software so there is no need to spend hours and hours of back testing. the EA can do all of that within milliseconds to determine it's own best settings.

Yesterday i was looking to enter a trading contest, with one of my late robots, but they required a backtest of the EA, which makes no sense at all because historic performance say's nothing about futuristic performance so i didn't sign up and consider these guy's to be amateurs, we are paid for being right, not for having the best back test and they should know that.

I design my EA's in a way they calculate the edge as fast as possible, and there is no 'manual trading idea' behind the logic, what an EA can do in the blink of an eye is physically impossible for a manual trader to achieve in the same time span so i design them to calculate the edge and not to mimic some useless manual trading strategy there will be none of that you see.

It's all math, calculations between X , Y and Z and it will never be more then math.

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