Is it easier to successfully trade manually or build a successful EA? | Forex Factory

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Is it easier to successfully trade manually or build a successful EA?

  • #1
  • First Post: Jul 25, 2008 12:39pm Jul 25, 2008 12:39pm
This is obviously a pretty open question. What do you think though?

If you're actually trading the market in terms of reading price action, other technical indicators, fundamentally, etc., is it generally easier to become successful trading in that manner versus coding up an EA to trade similarly? This is assuming you're not just grid trading and that the system essentially does try to 'predict' future movement.

This also touches on the aspect that the human mind will always be more advanced than a computer since we do have emotions and opinions which we can inflict on the market in terms of predicting movements or staying out of a position even though the signals are there just because something else is telling you to stay out.

Thoughts?
  • #2
  • Edited 1:47pm Jul 25, 2008 1:37pm | Edited 1:47pm
Generally speaking--as I see it--those who can develop successful automated systems and EAs to match are already successful manual traders.

Remember that good manual trading is nothing more than a system which a trader needs to follow. If you can find a way to turn that system from a series of pictures/patterns/etc into a series of mathematical patterns, then you can get an EA out of that. Personally, for me, I still do manually trade, but it's usually more to interfere with an EA's decision, or to put in a 'no-brainer' trade. A good 80-90% of all trades that come out of my accounts are generated by one of my EAs.

I guess what I'm saying is that ultimately, it's easier to have EAs augmenting but not replacing you as the trader. I don't believe there is a 100% automated system, but we can get pretty darn close. I see my EAs as little independent helpers, who scan the market for me.
  • #3
  • Jul 25, 2008 1:47pm Jul 25, 2008 1:47pm
Quoting Ronald Raygun
Generally speaking--as I see it--those who can develop successful automated systems and EAs to match are already successful manual traders.

Remember that good manual trading is nothing more than a system which a trader needs to follow. If you can find a way to turn that system from a series of pictures/patterns/etc into a series of mathematical patterns, then you can get an EA out of that. Personally, for me, I still do manually trade, but it's usually more to interfere with an EA's decision, or to put in a 'no-brainer' trade. A good 80-90% of all trades that come out of my accounts are generated by one of my EAs.

I guess what I'm saying is that ultimately, it's easier to have EAs augmenting but not replacing you as the trader. I don't believe there is a 100% automated system, but we can get pretty darn close. I see my EAs as little independent helpers, who scan the market for me.
Ronald...

sonic
  • #4
  • Jul 25, 2008 1:56pm Jul 25, 2008 1:56pm
The best automated systems cannot be traded manually, both options are equally hard, but for different reasons.
The breaking of a wave cannot explain the whole sea.
  • #5
  • Jul 25, 2008 4:03pm Jul 25, 2008 4:03pm
Quoting permanentjaun
This is obviously a pretty open question. What do you think though?

If you're actually trading the market in terms of reading price action, other technical indicators, fundamentally, etc., is it generally easier to become successful trading in that manner versus coding up an EA to trade similarly? This is assuming you're not just grid trading and that the system essentially does try to 'predict' future movement.

This also touches on the aspect that the human mind will always be more advanced than a computer since we do have emotions and opinions which we can inflict on the market in terms of predicting movements or staying out of a position even though the signals are there just because something else is telling you to stay out.

Thoughts?
I think its easier to use an EA at first while you learn to trade manually. In the long run trading manually I think would be better.
  • #6
  • Jul 25, 2008 4:04pm Jul 25, 2008 4:04pm
Quoting Ronald Raygun
Generally speaking--as I see it--those who can develop successful automated systems and EAs to match are already successful manual traders.

Remember that good manual trading is nothing more than a system which a trader needs to follow. If you can find a way to turn that system from a series of pictures/patterns/etc into a series of mathematical patterns, then you can get an EA out of that. Personally, for me, I still do manually trade, but it's usually more to interfere with an EA's decision, or to put in a 'no-brainer' trade. A good 80-90% of all trades that come out of my accounts are generated by one of my EAs.

I guess what I'm saying is that ultimately, it's easier to have EAs augmenting but not replacing you as the trader. I don't believe there is a 100% automated system, but we can get pretty darn close. I see my EAs as little independent helpers, who scan the market for me.
Hey Ronald,

What EA's are you currently using?
  • #7
  • Jul 25, 2008 4:29pm Jul 25, 2008 4:29pm
A handful actually:

10points3
Rhythm.v2
OzFx_MethodV2
PipNailer2
Trendfinder
AskFX
Trendhugger

Most of the EAs I coded for free on this forum

and about 8-9 more private EAs. Each EA is good for a specific market type (trending, ranging, up, down, sideways, etc) and they are turned on/off as needed.
  • #8
  • Jul 25, 2008 4:51pm Jul 25, 2008 4:51pm
Quoting Craig
The best automated systems cannot be traded manually, both options are equally hard, but for different reasons.
And I think the converse may be true as well, which maybe strikes to my point more vividly. The best manual systems can't be automated. As a human we're able to take in various inputs, and reject others to come up with a decision on what to do. So say we're getting a signal, albeit a weak one from say an RSI crossing up or an MA cross, but there is a NFP coming out soon. The EA would still take the trade since there was technically a signal. As a human we can reject the signal and wait it out.

That is just one example, but I think you get the point. Also, manually trading allows you to adapt even technical signals. Perhaps one week/month the RSI is a good indicator, but the next week/month MACD seems to be a better indicator. Ya never know.

I think that is what I'm trying to ask. Is the ability of the mind to adapt and break down scenarios typically an easier path of successful trading than trying to build an EA? It's a very broad question like I said and I'm only looking for opinions, unless you have some sort of white paper with research. That'd be cool too.
  • #9
  • Jul 25, 2008 4:55pm Jul 25, 2008 4:55pm
(scary)

Quoting Ronald Raygun
10points3
  • #10
  • Jul 25, 2008 4:56pm Jul 25, 2008 4:56pm
Quoting tdion
(scary)
True, if you let it get out of hand. That's what the other EAs are for, sorta like hedging.
  • #11
  • Jul 26, 2008 11:32am Jul 26, 2008 11:32am
assuming a human can totally disregard his emotions during trading, i'd trust a human trader more than an EA.

the real challenge is, and as with other stuff being automated in this world (AI, language processing), it's hard to put all the brain's capacity into a series of 1s and 0s. therefore, an EA is limited by what humans can put into code.
  • #12
  • Jul 26, 2008 11:50am Jul 26, 2008 11:50am
Quoting Seaward22
I think its easier to use an EA at first while you learn to trade manually. In the long run trading manually I think would be better.
I'm not sure but that just sounds backwards. Maybe it's just me.


Dave
Is it Break Time yet?
  • #13
  • Jul 26, 2008 12:55pm Jul 26, 2008 12:55pm
Quoting permanentjaun
...So say we're getting a signal, albeit a weak one from say an RSI crossing up or an MA cross, but there is a NFP coming out soon. The EA would still take the trade since there was technically a signal. As a human we can reject the signal and wait it out.

Who says an algorithmic trading system can't be aware of upcoming news releases...?
  • #14
  • Jul 26, 2008 2:06pm Jul 26, 2008 2:06pm
Quoting dkhinckley
I'm not sure but that just sounds backwards. Maybe it's just me.


Dave
I can see how that would be backwards. Most currency traders lose their first few accounts starting manually. I was thinking if they started with an EA this would spare them the beginning growing pains. But maybe inexperience would hinder the management of the EA.
  • #15
  • Jul 26, 2008 2:22pm Jul 26, 2008 2:22pm
I do NOT trust EAs to do my trading for me.
Same Whore .... Different Dress
  • #16
  • Last Post: Jul 26, 2008 2:50pm Jul 26, 2008 2:50pm
ultimately trading is in the hand of the trader whether you use EAs or a manual system.

It has been my experience so far that disciplined screen time based on my system is most profitable. An EA cannot cover every contingency the market will throw at you. An EA does not gain discernment over time as does the trader who after hours and hours of screen time has learned when to pull the trigger and when to sit on his hands. There is immense power in knowing when to do that.

If you are going to be successful in 4x you have to run your trading like a business. In the end an EA is only one tool in your overall business of trading. Your disciplined brain is your most valuable tool.
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