Are you one of those who were looking for an easy shortcut to make money with Expert Advisor? If that's so, let's find out how that intelligent software actually performs.

Are you one of those who were looking for an easy shortcut to make money with Expert Advisor? If that's so, let's find out how that intelligent software actually performs. For real. No Bullshit.

Expert Advisor


First Thing First, Let's Separate The Myths From The Facts

It's easy to get misinformed when so many advertisements overwhelm your common sense. To clarify things, you need to know this simple list of facts vs. myths about this automated trading system:


a. Expert Advisor is Risk-Free

Total bull crap. There's no single Expert Advisor that can guarantee profits from Forex trading without any risk of losing. In fact, there's a drawdown factor when you backtest any trading robot. Under that case, no matter how good your purchased EA is, there's always be a risk of losing whenever they open any position.

drawdown in expert advisor backtest

The report as seen above showed maximal drawdown from a backtest of an Expert Advisor, which means the trading robot has accrued losses from a certain period of time.


b. You Can Rely on Expert Advisor 100% All the Time

Many EA marketers claimed that their trading robot can manage to trade Forex 24/7 without supervision. Yeah, that would only exist in an ideal world. However, in contrast, there's a special condition where you'll have to override Expert Advisors manually. Some of those conditions are;

  1. News release: during this period, trading volumes and market orders peaked only for a brief moment. Subsequently, volatility is very likely and may send all the fake signals that your trading robot can't filter, resulting in losing streaks.
  2. Server hiccup: Expert Advisor needs a VPS as a host. Needless to say, when the host isn't working optimally due to specific reasons, your trading robot will also suffer performance loss.
  3. The market is irrational: let's face it, human decisions still dominate the Forex market. Therefore, the market's inefficiencies can still lead to unexpected price direction.

So, unless all the three conditions above are rendered infallible (which is impossible), there's no way you should leave EA to its own device for an extended period. In short, you'll still have to check them every now and then to make sure they still perform as advertised.

EA performance (Read more: Expert Advisors, Is It Worth Trying?)


c. Expert Advisor Makes Over 100% Return or Even Above

If that's true, everyone should have retired from their job in less than a year while letting that trading bot do its miracle work. Realistically, it's a far cry from the truth. Want some facts?

top hedge fund return in 2016, can you make money with Expert Advisor that much?

The top two hedge funds listed above employed the best quant-researchers to develop state-of-the-art quantitative "black-boxes". In short, it's a world above any retail Expert Advisor can even dream to compete with. Did you notice how much return they made over their AUM (assets under management)? They made less than 20% return, annually! Now, compare that to claims advertised by your EA's marketer. Over 100% return in less than a month? You don't have to be a rocket scientist to notice something just doesn't add up.


d. Expert Advisor Developed By, well, Experts

Surprisingly, most Expert Advisors are not developed by well-endowed researchers. Even if it actually is, you won't find it on the retail price level. To be honest, people who actually make money with EAs are mostly those who develop and sell it to other retail traders. But it doesn't stop there! The one who bought the original EA may also tamper with the source code, creating a "copy" in the process. With that in mind, you'll find many "boot-strapped" EAs that use pretty much similar trading strategies and other slight variances. The significant differences between one to other trading robots apparently only boils down to their marketing campaigns.

Expert Advisors


e. Most Expert Advisors are Scams

This one part is scarily true. Most Expert Advisors gleamed over the internet are probably a trap set for unwary beginners. Frankly speaking, some of them may offer cheap bargains to attract buyers. First, if their claims are true, they have all the rights and legitimacy to sell it for a huge price-tag. So, why would they sell it cheap if they can get more?

Alternatively, if the developers can actually make decent Expert Advisors, they could have kept the trading bot for themselves while charging a hefty commission fee for any wealthy person willing to invest in their automated trading system. So, with all that odds weighed up, you'll smell funny things about those cheap garbages. For all I can tell, some of them would even go as far as offering free Expert Advisor only to be "hitchhiked" by adware or malware.


Second, Check These Hints To Actually Make Money With Expert Advisor

There are over a thousand ways to skin a cat, but only some will stick out as the best method. The same things also applies if you want to make money with Expert Advisor. Here are some methods that I, personally, found out in actual practices and you can follow as well:


a. Set Apart the Good from the Bad Robots

You can research and look for a decent Expert Advisor by their actual performance reports. You can find them from these sources:


1. Backtest

This method recorded EA's performance over a set period of time (past trading sessions). You'll need those records to judge how good your Expert Advisor is. Click this following link to learn how to do backtesting. After backtesting your EA, you should look at its maximal drawdown:

backtest for EAs

That piece of information is important because it informs you how much loss you can risk before pulling off said EA from your trading account.maximal drawdown, you can't make money with expert advisor if it reaches certain loss treshold

The table above tells how difficult it is to return to break-even point if you lost certain percentage of your starting capital. To avoid further loss, take off the EA from your system if it breaches 25% maximal drawdown threshold.


2. Forward Test

Compared to the backtest, the forward test measures your EA' s performance on real-time trades. That's why it's more accurate and favorable. In this following example, I use the FXblue widget to showcase the actual performance of an EA.

As you can see above, the Peak drawdown (maximal drawdown) is below the threshold of 25% capital loss. That's a good sign to start with. Furthermore, during its initial installment to its latest performance report, it has accumulated a 32.3% return.


b. Be Real, Decent Expert Advisor Doesn't Come Up Cheap

Don't expect a cheap Expert Advisor to make money more than it's worth. Like I said before, the developer has all the reasons to put a high price tag on his EA if it actually performs well. Therefore, it's better to invest your money on a decent trading robot that will make money consistently for you, rather than trying random cheap/freebies EA. For that reason, you may consider building your own EA if you can't afford to buy one. Fortunately, you don't have to reinvent the wheel from a scratch, you can use available frameworks from EA developers community like MQL5.


If you have an EA that actually works better than those already listed inside, please contact me and show me its real account performance (on FXblue or Myfxbook). I'll update the list after I've reviewed it. This way we can also share decent performing EAs that can make money with other traders.