Advantages of Expert Advisor (ROBOT)

Guys appreciate if anyone could give some good points and advantages using an EA or Robot to trade.

Also, is there a possibility of slippage when trading using EA/ Robot at all market conditions.

Thanks.

Regards,
Michael

save your time

The advantage is to save yourself time during which you can do other things while the robot will patiently wait for some predefined conditions and then carries out its orders with great discipline and accuracy.

However, this is a two-edged sword: It has no ability to make intelligent decisions and so it will continue to place its orders, following its naive and simple plan (the rules that are built into it) even in such situations where every sane human trader would have come to the conclusion that this simple rules must not be followed in this specific situation. A programmer can try to make these rules incredibly complex and rule out almost all special cases he can think of but there will always come a situation to which the robot is not prepared and it will then stupidly continue to follow its rules, unable to make an intelligent decision.

We do not have artificial intelligence yet that can handle every possible situation with an intelligent decision. All a computer can do is blindly follow its plan.

But there are situations where automation is useful. The simplest form of automated trading is a pending stop or limit order, their rule is simple: buy or sell when price hits this level. This can save you some time, you don't need to wait for hour in front of the computer and the things that can go wrong are easily understandable and manageable.

After a few years research I have come to the conclusion that the robots I can trust the most are the ones that don't even try to make any decisions. My bots operate semi-automatic and all decisions are made by me. They have a very limited set of rules, not much more complicated than simple pending orders, I use them as tools to carry out my decisions while I am away for only a few hours and because I know they are dumb I give them absolutely no freedom to do anything autonomously. They are simple bots that are able to open a series of orders once price reaches certain well defined (by me) levels, crosses certain lines I draw into the chart, etc and they all have built in stop conditions that make them halt and close all positions whenever price leaves a certain range and I can always calculate and know the maximum loss for this worst case scenario in advance. There wont be any bad surprises. I can sleep well.

I am profitable with the help of my bots.

Thank you for your precise explanation on this. I appreciate it. I think I agree with you that the robot is just a tool to aid only on certain circumstances. But, during news, is there a tendency of slippage by applying robot.

Thanks.

Cheers,
Michael

Nice summary, IMO.

As the saying goes, "a good trader follows his rules, a great trader knows when to break them".

I use a couple of EAs to manage my exits, that's about it.

There is no difference concerning market orders. In the end it does the same thing that is done when you manually press the button, the only difference is that it can theoretically react faster to the fact that it has been slipped or in case of a requote quickly calculate a new entry, new stops and try again (if it has rules for this programmed into it). But it cannot cheat, it has to accept what the market or the dealer does.

One of the few advantages of a forex robot is this:

It will pile on the pain of losing money very early on in your trading career instead of the pain being spread out over the course of a longer time period. Eventually you will either quit trading or learn to move beyond the forex robots to find what really matters.

Your negative experiences come from the wrong expectations you had and these wrong expectations come from the dishonest advertising of bot sellers and the wrong expectations / lack of knowledge that many freeware bot authors have (probably for the same reason).

I have a bot that will categorize my incoming email and sort out most of the spam. I don't expect a bot to answer my emails but it does a decent job in categorizing and sorting them for me and i would not want to miss it anymore. I know about the occasionally happening wrong false positive spam detection and I accept it and can deal with it, the advantages outweigh the disadvantages by far.

And I have several bots monitoring the (and acting in) the forex market 24/5 that will for example trail my entries and exits for me, place new orders when necessary according to my system and have the ability to close all trading and even wake me up in the middle of the night when TSHTF (relative and according to my definition of this event). I dont expect them to make trading decisions, just like I don't expect a bot to answer my mail.

These bots all serve me very well within their limited and well defined scope of duties.