Many have failed at manual trading and are now looking for automated Forex EAs, a.k.a. expert advisors. Automated Forex EAs are not the panacea for your trading losses or your wealth accumulation. Automatic Forex trading software is to be taken sincerely, so that you can well acquaint yourself with the pros and cons ahead. Every automated Forex EA will have losses or drawdown, as this is the law of trading. There are always risks involved in order to obtain rewards or profits. If you see a trading system advertised on a forum with 100% wins, you should be leery of it. If you read about an automated Forex EA that has doubled its account in the past two weeks and is recommended by everyone, you should ask yourself, “What kind of risk is the software taking?” If the software really works, then the creator should be richer than Bill Gates since the creator’s software can double his money every few weeks. So far, Bill Gates is still the richest man in the world; hence, you should doubt the legitimacy of the software’s long-term profitability.
When selecting automated Forex EAs, you should request 6 months of live trading data with fixed single lot trading. Only with fix single lot trading, will you be able to view the profitability (reward) and the drawdown (risk) of a automated Forex EA. Viewing a compounded lot trading statement of the foreign currency trading is meaningless, as the profitability is skewed. Chances are, the statement is only good for a few weeks before one single bad trade wipes out the entire account.
It is advisable to stick to a selected trading system after you have done your in-depth analysis. Enter the market with the system during its drawdown and not during its winning streak. A good automated Forex EA will minimize losses with a fixed stop loss, while accumulate gains with a greater take profit than a stop loss. Whenever possible, you should run two trading systems in parallel, on two separate accounts.
Courtesy: ctsforex.com
No comments:
Post a Comment