The worldwide web is now overflowing with different Expert Advisors. I do a biweekly survey in which I look for new Expert Advisors on Google and eBay, often finding a dozen new Expert Advisors for each time I do my research.
Many of them do the same thing. They are usually targeted towards Forex newbies who clearly don’t have a solid understanding of the way the market works and the way money is made inside Forex. The Expert Advisors always promises to be a “set and forget” way of entering the Forex market with a massive profit.
When I first learned about Expert Advisors, I used to think they were a pretty straight thing. I mean, it makes sense. Mr. A is a successful Forex trader, and he puts his strategy in Expert Advisor M. I use M, hence, I’m using Mr. A’s approach, making me a successful trader by logic. Well… Not quite.
There is a pair of things that differentiate me using M from Mr. A. First Mr.A has probably been in the Forex market for a while, he has something crucial. Discretion. He knows when to execute his strategy when to hold when to tweak it, he knows and understands the underlying information that influences currencies. He could, in fact, put this into the EA to some extent but there is something he cannot put. He cannot program how he would react in exactly every market condition, how would he react to war, to news, to elections, I mean, he cannot put his brain inside an EA. So M, is an approximation to Mr.A’s strategy, not a duplicate.
So do Expert Advisors work? To what extent? Which claims are true, which ones are not? First things first. When you buy an Expert Advisor, put some logic into it. An Expert Advisor that made something like 100% every month would make someone the richest person on the planet in 10 years starting with a hundred dollar investment. If it is too good to be true, it probably is. Every test can be faked, never believe more than 10% average profit per month. Simple. Also, search for reviews online, your best source of information is other people who have used it. No reviews, you don’t buy it, simple.
When you do get an Expert Advisor which is not a scam and seems to deliver to other people what you expect. Do not despair while you learn how an EA works. I mean, at first, you would expect a 5% profit EA to deliver that every month. They clearly do not work like that. That 5% is just the average monthly profit. An EA is a very poorly constant entity, it will probably oscillate dramatically, making 10% one month, 50% the next, then a 20% draw down. I mean, they do this very badly.
So to protect yourself. Withdraw a percentage of your profit. Always and never, never ever put money into a losing account. Those my friends are the rules of thumb.
Last but not least… Remember. The Forex market is NOT a place to get rich quickly. It is a place to grow richness by constant learning and studying of the market. It is not a place for easy money (like if they were any!). Expert advisors are a tool of the trade, they can make you wealthy in the long run not this month or the next.