All “newbie” or beginner traders share the same dream, attaching a Forex trading robot also known as EA (Expert advisor) to their trading charts in MT4 without doing anything else. The EA will take over and make enormous profits with correct money management, it will avoid high impact news, avoid losses and make analyses on their own. But the reality is a bit different and far far away from that. Finding a free Forex robot is one thing but finding one that makes long term profits is a hard task.
Keep in mind that every Forex robot is just a piece of code that has been created with certain trading strategies by programmers using data schemes and back tests to prove the possibility to give some profits. Hopefully more profits than loses but it’s not always like that. Almost every strategy used by Forex EA’s can also be traded manually. Most traders will use robots because they are too lazy to learn how to trade or they fear to trade by them selves. They are just too emotional about trading (greed and fear are two emotions that rule the financial markets). And for loses is of course much easier to blame an EA than yourself.
There are hundreds of different commercial and free Expert Advisors on the web but most of them won’t make any long term profits. If you’re absolutely new to automated trading then I would suggest you to try out some free robots that are shared across different forums etc. But play with them on demo accounts, not on real money accounts. Don not rush into buying a commercial robot just because the website is promising 50% weekly profits and the price is a top offer that lasts only this week $300 instead of $600! Webmasters know how to attract newbie traders that are searching for profitable EA’s. There is no guarantee that the EA really works and creates profits, the statistics can be manipulated, or from demo accounts with perfect trading conditions…. The are usually long 10 year back test, but there is a big chance that the data used was a bit filtered to get wished results. Only believe to live forward test from real Forex trading accounts. It is not all that bad with automated trading you just need to find a good EA and a good broker that will make the EA profitable. Not all EA’s are profitable with every broker. There are differences between brokers like execution, spread, slippage, etc. Those are all important factors that must be optimal for an EA to work correctly.
My team has tested over 70 free and commercial Forex robots and less than 5 were showing nice and steady profitable results, less than 5 acceptable results. And the rest was bad, very bad. There are a lot of robots out there using martingale strategies and they look very profitable. But the risk they are taking is enormous. They double the lot size by every trade id the trend is against them and this is a very fast way to bankrupt your account.
Is this the truth? Well yes, but it’s not that bad. You just need to be careful when trying out new EA’s and never attach them directly to a live account, you never know how an EA will react. Run it on a demo accounts first for some time and then move to real money accounts.
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