I don't think, as a forex trader, you can go
anywhere online without somebody discussing forex software
review. There is a lot of talk about them but have you ever noticed anybody claiming to have
success with them. Hmmm?? Makes you think. Doesn't it?
First off, for those that don't know what forex expert
advisors (or EAs as they are also referred to as), they are essentially automated forex
systems that do the trading for you. I mean LITERALLY trade for you. You turn your
computer on. You pull up your chart, and turn the Expert Advisor on, and as long as you
leave your computer on and the internet connection is connected, then this trading robot
will trade for you.
Does this sound
fishy to anybody else? Don't get me wrong. If I
thought it worked I would be using it right now. Who
I know I would rather spend that time doing more
fun activities than looking at my charts. I would love to be able to become a millionaire
while this magical trading robot does all the work, and I have all the fun.
But, let's get back to reality.
As they say the proof is in the
pudding. So if you want to know if any of these forex EAs are worthwhile, let's do a
little research. There are certain places where you will always hear some discussion on this
subject: Forex Forums.
Go to any of the large and heavily visited forums
like forex factory. Surf around some of the threads. You can't help but
run into dozens of them discussing some kind of forex EA.
I'll give you an example, of what you'll most likely
You'll probably see threads on top of threads that
have countless pages covering the development of certain EAs.
It's started from humble beginnings. The thread
has gone on now for months.
One of either two scenarios have
A) The EA has been tweaked countless times and it
still can't show consistent profits on a demo. There have been at least 5 people who have been
working on the code.
B) The EA had been doing really well on demos, but
for some reason, when traders use them on live accounts with real money, all of a sudden
it doesn't work as well, and traders are losing money.
As you can see, literally months, sometimes even
years have been wasted on building this supposed holy grail.
You need to ask yourself some questions, if EAs
worked, then why wouldn't anybody use them? Why would institutional traders, even bother
coming to work? Wouldn't they just let the computer do all the work while they play 18 rounds
Also for the second scenario, (this is really
common by the way) notice how the expert advisors, just magically stopped working
well, when traders decided to trade for real money.
that. The moment you put REAL money behind it, all of a sudden, everything
falls to pieces. In my many years of trading forex, there is one creed that I say over and
over again. "You can't trust a broker". Don't get me wrong. Some are better than
others. But, frankly they are necessary evil in this industry. I would NEVER in a million years
give them the green light to handle my trades, and that is essentially what you are doing when you
are using Forex EAs.
You might think that the EA is doing the work, but
there is no real way to verify the accuracy of your broker. You have to SEE it with your own
For those that are really fascinated with Forex EAs,
all I can say is that there are no shortcuts in the forex market. There is no such thing as
The forex market is a complicated beast, that
requires human interaction. You think a Forex EA will have any idea of how to handle a Fed interest
decision? Do you think that it will know what analysts predicted and what was the actual
outcome was, and what the market thinks of it??? I don't think so.
I'm not saying that it eventually can't happen.
But it's certainly not happening anytime soon.
All this time searching for the holy grail, could be
used to really understand how the market moves. You've got
to start thinking less is more. There is no magic button to make you a millionaire trading
forex. You are going to have to learn.
It all starts with price
action. Its as old as trading itself. If you can look at a naked price chart (no
indicators or other bells and whistles) and be able to understand what it is you are looking at,
you are WAY ahead of the curve.