EA vs Chart Reading

[Caseynotes]

Is there any great difference between an EA and a human in how they should trade? This was written by an EA developer, 

 

"This forex market and trading in currencies is a very risky job. The EA does not know where the market will go in 1 second. It does not know whether it will get a profit from a position or not. Any adviser works according to it's signals. If a signal appears, it opens the position."

 

Sounds familiar, so both should work by systematically applying a set of rules that testing has shown to be profitable. Both should fail if they fail to stick to the rules or if the rules have not been properly tested.

 

An EA can search a chart for the signals 24 hours a day, a human can quickly search dozens of charts and then concentrate on the one most likely to provide signals.

 

Humans can be discretionary which can be good and bad, EA's can't be discretionary which can also be good and bad. 

 

There are a couple of things I've noticed over the years looking at the MQL5 site.

 

In the EA trading signals section most don't stay in top 10 for more than a year, one that has is called EOS Half Auto, 1937% over 272 weeks, astounding, but look in the reviews section and there are just 3, 1 just starting to use, 1 saying do not use, and 1 query. 

Not very convincing.

 

Then look in the 'Jobs for Programmers' section, this customer in the pic below has a 5 star rating and has placed 116 previous orders, can we presume that is 116 failures at developing a profitable EA?

 

Is chart reading so difficult?  Price ranges sideways while buyers = sellers, once either is exhausted price moves to retest the prior  highs or lows or further on to test a prior range. You can trade the break or dips along the way.

 

High Frequency systems have an advantage of speed that the retail trader can't access whether using EA or not but can any successful non discretionary system survive in the market place without changing market conditions or arbitrage neutralising it over time? Is that why there seems to be a never ending search for a new EA.

 

 

 

 

 

 

 

 

  

[EA-trader]

High Frequency systems have an advantage of speed that the retail trader can't access whether using EA or not but can any successful non discretionary system survive in the market place without changing market conditions or arbitrage neutralising it over time? Is that why there seems to be a never ending search for a new EA.

 

High Frequency advantage is actually a disadvantage, when it comes to trading.It is only useful for front running  the pension investments from pension contributors.The HFT make money by creating algos that read, the time of order flows of regular pension investments, that come daily into the market.They are reading the pending  orders placed by pension funds so our good friends like golman stanley can profit by front running the pension orders.

 

In trading it is often best to see which side has gained the upper hand , then join that side .So hft is no good in trading, the first warrior fights alone, the army of warriors fight together.

 

99% of the coders on mql site coders are amateurs and part timers. They don't have the advanced programming skills of switching , automatically and applying the correct ea for underlying market conditions.A single EA can be programmed, with six different market conditions, an ea can pick those market conditions and apply the appropriate ea for it.The programmers are skilled enough to do this.

 

Most eas are coded and developed by amateurs, without the necessary knowledge to do this successfully.

 

Every educator and guru will show hindsight performance of trends and EAS, if you had done this , you would have made so much on back tests.Apply the back tests in the future and see why all back tested systems and eas fail.Eas are basically trading systems.If all EAS fail , , one could doubt if all systems work.

 

 

[Caseynotes]

Good points though some HFT's are intraday micro trend following looking for just a few points hundreds of times a day and can only work by access to ultra low commissions and ultra high speeds.

 

Writing off 99% of EA's creates a problem for anyone wishing to purchase an actual profitable EA, so arbitrage is avoided in the 1% by making it so expensive only a very few could afford it if it was ever put up for sale at all.

 

Does that mean the search is pointless then or where does one go next if the search is to continue. 

[EA-trader]

A profitable EA requires a profit making logic, it is unlikely to be developed by coders or gurus, it is most likely to be developed by a profitable trader or someone who understands profitable trading.A profitable EA is like a ATM machine , it is a printing press for banknotes.Who is going to give you an ATM money printing press?

 

Ea owners who understand profitable trading, may become unprofitable, if the market becomes random and oversupplied.Something may kill the edge of the profitable trader.If the brokers realized it , they would have to find ways to kill the EA trader, by raising spreads,no frills,blocking the profitable trader, if broker is a bucket.

 

The person Who made the profitable EA probably lost/invested a lot of money, in his search for gold map i.e EA.He is unwilling to sell a profitable EA for a few hundred dollars.They will usually rent a profitable EA.

 

Until the EA renter comes on the market, it is an almost impossible task.Anyone offering a profitable EA for sale,is likely to be a scam, until someone gives away the "secret of profitable EAS"

 

The solution is to make your own profitable EA, but it may take many many years, at a cost of hundreds of thousands of$$$$$$$  and time cost.