I have spent a good chunk of this and last week analyzing commercial expert advisor systems extensively, trying to assess their profitability and write reviews that can help retail traders out there who don't want to lose their money in something that does not work at all. A very strange thing I have found while doing my research is that most people look for expert advisors that have characteristics that differ a lot from what I would consider the main features of a profitable trading system.
The regular new forex trader who wants to use an automated system usually looks for a system with a given set of properties. I have deduced, from commercial expert advisor sites (including the ones with the cheesy marketing stuff), that people will preferably buy expert advisors that trade a lot and have high percentages of winning trades. Physiologically people like to know they will "lose" less often.
Now, profitable expert advisor, from what I have been able to analyze, have almost exactly opposite characteristics. They have low winning percentages and they trade rather infrequently. Of course, this is almost unmarketable. Most people will utterly reject a system which has a 10% winning percentage and a trading frequency of 1-2 trades per month. Well, that would mean winning 1 trade a year, most people cannot deal with that, they want the constant gratification of winning all the time, even if that means being unprofitable overall.
Of course, people are not brain dead and will take a profitable system once it is proven to them, but they are much more prone to accept evidence (false or true) about a system with the characteristics they desire, rather than a system with the profile shown below.
What they usually forget is that systems with low winning percentages that trade infrequently are often trend followers which try to catch big pip moves, so they may lose 90% of the trades but the trades that profit are almost 20 times larger than the losers, making the expert overall very profitable. The turtle trading system is a very good example of this, it loses very frequently and requires a lot of discipline to trade but it is profitable in the long run.
If you would like to learn more about what expert advisors, both free and commercial, I have tested and found likely profitable, please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !
The regular new forex trader who wants to use an automated system usually looks for a system with a given set of properties. I have deduced, from commercial expert advisor sites (including the ones with the cheesy marketing stuff), that people will preferably buy expert advisors that trade a lot and have high percentages of winning trades. Physiologically people like to know they will "lose" less often.
Now, profitable expert advisor, from what I have been able to analyze, have almost exactly opposite characteristics. They have low winning percentages and they trade rather infrequently. Of course, this is almost unmarketable. Most people will utterly reject a system which has a 10% winning percentage and a trading frequency of 1-2 trades per month. Well, that would mean winning 1 trade a year, most people cannot deal with that, they want the constant gratification of winning all the time, even if that means being unprofitable overall.
Of course, people are not brain dead and will take a profitable system once it is proven to them, but they are much more prone to accept evidence (false or true) about a system with the characteristics they desire, rather than a system with the profile shown below.
What they usually forget is that systems with low winning percentages that trade infrequently are often trend followers which try to catch big pip moves, so they may lose 90% of the trades but the trades that profit are almost 20 times larger than the losers, making the expert overall very profitable. The turtle trading system is a very good example of this, it loses very frequently and requires a lot of discipline to trade but it is profitable in the long run.
If you would like to learn more about what expert advisors, both free and commercial, I have tested and found likely profitable, please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed the article !
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