Expert Advisors, from Heaven to Hell

Expert Advisors and long-term profit

I am going to talk about one of the most famous Expert Advisors of the last years, though I will not mention his name.

There can be cases of honest Expert Advisor providers, like the case I am mentioning, but they will end up failing as well as the dishonest. After some time, the conditions that made their system work change and the systems stop working.

Market conditions are always changing.

For instance, volatility changes, so systems that work well with volatility go belly up when it falls. Expert Advisors do not know when volatility or other “condition” change. When that happens the accounts are busted already. But, it is too late by then.

Expert Advisor example

This was the case of an Expert Advisor that had enormous popularity. In 2013 was one of the most reputable Expert Advisors on the Anglo-Saxon sphere.

Its owner showed it openly in his web and in some forex forums.

The system had an immaculate ten years record, and some people who were trying it, were having success. The promotion through affiliates and all sorts of marketing was running well.

Everything seemed to go well, both for the owner and for the traders.

I discovered that Expert advisor the year before by chance. It was so popular in one of the most used forex forums that I remembered its name.

Last year, in 2013, I had a look again in the forum and I saw that people were complaining about that Expert Advisor. It had stopped working some months ago, and had a negative return to date.

The accounts were displayed in both myfxbook and the owner´s website. The owner decided to stop the service and say it publicly.

Other Expert Advisors, will end up just closing their websites and disappearing without a trace. This Expert Advisor admitted that his system had failed and that it retired to study what had happened.

I can tell him what happened.

Expert Advisor failure

First, real trading is not the same as demo and simulated trading.

Second, the conditions his system was based in had changed.

This Expert Advisors seemed to behave quite well with high volatility, breakouts and volume. The fact is that when volatility decreased in the markets the system went belly up.

The owner thought that he had found the way to beat the market, but the market proved that it is not easy to beat.

The users of the system complained bitterly about the failure. However, they should know and learn that they will hardly go rich by using Expert Advisors.

When will they learn?

I wish that the guy succeeds in his investigation about his EA. It was not the typical scammer Expert Advisor looking for easy money. The owner thought honestly that he had an edge.

In my case I was never interested in Expert Advisors and never bought one.

I was good enough myself to lose money trading, and I did not need someone else to lose it for me.

Expert advisors that work for long term

There may be Expert Advisors that may win money, but how many still win a 20% average profit after seven years of real trading? Can you show me please? I do not think there are many.

It is a fact that most Expert Advisors end up failing, just as well as most traders. But, actually they do not “fail” because they make a hefty amount of money selling those Expert Advisors in the market.

It is the traders who buy them who lose. They lose when they buy the system and they lose when they apply it in real trading.

Thousands of Expert Advisors have made hundreds of millions of dollars.

It is not a bad business actually, and, in a good demand.

However, it is a very dangerous world, particularly for traders hoping for the Holy Grail.


Thanks for reading and sharing.