Do Forex Expert Advisors Actually Work???


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?

price actionFirst 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 wouldn't?!!  

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 see.

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 happened.

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 of golf?

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.

Think about 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 eyes.

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 autopilot.

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.  


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