Forex Robots
Today my attention has been drawn to forex robots, automated trading in other words. I always have been aware of it and, from time to time, examined various systems. Let me start with just what triggered writing this blog: I received an email this morning from a friend advising the end of an EA world competition and the opportunity to buy one of the world’s best automated trading system, one of the best of this EA competition.
Ok – so what is EA? It stands for EXPERT ADVISOR – a name coined by a trading platform called METATRADER, which is one of the most popular in the world. This platform allows you to devise / design trading systems that would operate automatically, executing trades by the rules and parameters that you have designed. You can test how this system would have performed for any period in the past. This is called “back testing”. Once you have designed your system so that it works it will be called Expert Advisor = EA, and it is saved so that you can use it at any time.
This facility is absolutely fantastic, especially for the more technical minded among us. If that fits your passion then definitely go for it!
Now the advantage(s) of an automated trading system is that you can try to achieve a “statistical edge”. This means that on average over a set period of time your trades will produce a positive closing balance, i.e. make profit! GREAT !!!! No wonder that many people are most passionate about this facility and opportunity as we all dream of making money without having to work too hard – or even not work at all – just follow our leisures and pleasures and make money, -guaranteed!
Are you still with me? Or have you rushed away to MetaTrader ?
Well, in case you are still around, let me tell you that it is not quite as easy as all that. Very briefly, if you want to trade seriously, you
- must act rigorously according to your trading rules; you can call them “Rules of Engagement” and you must stay focused on just a few rules,
- must keep meticulous record of your actions and their results,
- must evaluate those results to be able to determine future results the same actions may produce;
- must “tweek” and refine your Rules of Engagement (RoE) which make up your system until you are confident that the outcome will be positive, that is you make a profit.
Now you have designed an EA you can trust: you have designed a trading system with a “statistical edge”", meaning your winning results ( which is not necessarily the number of your winning trades!) will out-perform your losses. CONGRATULATIONS!
Some like-minded people have come together and created a website promoting and featuring a competition to find the best EA’s at a given point in time. This is how they introduce themselves:
The Forex Robot World Cup (FRWC) competition was established by a group of Forex traders and system developers with an important mission:
“Creating the first truly professional, automated Forex trading competition that would yield the world’s best functioning Expert Advisor (EA) driven by realistic parameters in live market conditions, and allowing Forex traders all over the world to use these Forex robots in their personal trading.”
More about this and the email I received today in my next blog.
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