Everybody knows that forex EAs are the new “hot” thing in forex trading. For those that don’t know what a Forex EA is, it stands for Forex Expert Advisor. It’s essentially a trading robot. The developer of the EA sets up a trading system with lagging indicators such as stochastics and moving averages, and creates a code that your trading platform uses to trade for you when you’re not around. So, basically it can trade for you while you’re asleep, at work, taking a shower, etc… Sounds incredible doesn’t it? Well there is one tiny thing you should know about them. The majority fail miserably.
Don’t believe me? That’s fine. Just browse through almost every single forex forum on the internet today. You’ll get your fill of forex EAs. They are all over the place. After you have spent 4 or 5 months demoing and crashing your account with them, you might have wished you’d spend your time a little bit more carefully.
A successful Forex EA is a lot like the holy grail of trading. You hear about it a lot, but you never get to see it, do you? There is a good reason for it: A robot cannot trade for you.
I learned this the hard way (as I’m sure many have). We all want the easy way out. But simple logic tells you that a robot cannot intuitively react to market news. It’s not like the robot can hear what the Federal government is saying about the state of inflation. Even more so, a robot does not know how to trade the rhetoric.
The irony is if I took that time that I wasted searching for the holy grail and spent it learning how the market moves, I would have become successful a lot sooner.