This seems to be the real question.
Recently in the blog there have been a couple of comments from really experts (manual) traders saying that all the EAs are scam, that the only way to trade is learn technical analysis and learn to trade manually.
All the rest is marketing and scam. No way.
Well, this is post it to reply to that point of view. I started trading 11 years ago. And started coding 29 years ago. I traded almost everything: stocks, CFDs, futures, Forex, options, etc. Started studying a lot of technical analysis going in depth by also studying almos every single formula behing every indicator, so to really understand what’s the meaning of what they show. I consider myself, and I’m considered a good “manual” trader so to live out of it. That’s what in my opinion makes the real difference.
But I grow up in fron of a computer, coding most of the time. And it was natural to also apply my programming knowledge to trading. Again, I coded almost everything for trading, from “simple” indicators, to neural networks, to “robots”.
So I walked both the path of “fully” manual and “fully” automatic trading. And after years I got the evidence that there’s good and bad in both. Both approaches have pros and cons. So I came to the conclusion that the best thing is follow a third path that takes the best out of both. That’s what is best FOR ME. I’m not saying that is best for EVERYONE.
People writing the above mentioned posts are not good for automatic trading. They simply don’t get it. It’s not their fault. But they are exeptionally good manual traders. Once you got that you simply have to follow your path. The one that works for you. And there are many ways to follow it, many trading systems, many “theories” etc. Whatever works for you is good. But simply DON’T PRETEND TO SAY THAT WHAT WORKS FOR YOU IS THE ONLY GOOD WAY TO DO ONE THING. I never did… You won’t ever read or listen me saying that automatic trading is the only way to be a succesful trader. Because it’s not. As nobody can say that trading Fibos and/or Pivots and/or Elliot waves and/or Japanese Candles pattern and/or point&figure and/or ANY OTHER METHOD is the only way to be succesful. What works for you, may not work for someone else. Traditional technical analysis and all the other theories behind any manual trading system are simply ways to read price action. That’s it. In the past, before computers (and some still do something like that now) there were traders able to build empires with “tape reading”, trading by simply reading the streamed price value.
That’s because is your brain that makes the real difference. Humans are incredibly good in pattern recognition. Indicators, candles, etc simply help your brain learning and recognizing patterns. Some may be good for you, but our brains are very different from each other, and that’s why someone else may not have the same performances using the same system. With time and experience, you’ll arrive at a level that you’ll do the same trade hundreds, thousands of time and trading will be almost boring, like almost every kind of job/business.
Absolutely the same thing applies to EA trading. It’s a kind of trading not made for everyone. And not all the EAs are good for everyone. Yes, you can use them as “set and forget”, but sooner or later they will fail. This is one of the “problems” with EAs. They are not so good in adapting to market conditions. That’s why programmers should spend time making them better and change them as market conditions change. That’s why I’m continuing working on Crescendo.
We tend to forget that behind an EA there’s a trader (or a team of traders). I’m not talking about the few good ones out there. The strategy should “evolve” as the market changes and so the EA. But that happens in manual trading. I don’t know a single trader that is using EXACTLY the same strategy since he started. We do always perfect it. Try to find new things that can improve performances as much as possible. All the good manual traders also, don’t use ONE strategy, but many and depending on the market conditions they switch from one to the other. Sometimes using more than one at the same time (for example a long term one and a short term one).
How can we then pretend that an EA is good for all the market conditions?
That’s were the real automatic trader is called to do something. Despite of the common ideas EAs (or any kind of automatic trading piece of software) ARE TOOLS. The automatic trader has to learn to know how they work, what are the best market conditions for them to work, recognize them and decide which EA is good to use or not or better, simply know when an EA should be stopped from trading. Sometimes better stop them all
I always said that. There are two ways to trade with EAs: set and forget and what I call “semi-automatic”. The first one is good if you have someone developing the EA that also keeps it updated. But the best one is to use your brain and experience and trade with EAs. It’s not easy and requires time and knowledge, but surely much less than becoming one of the 2% of incredibly good and wise “manual” traders. It helps but it’s not mandatory thanks to the fact that we can rely on some “knowledge” coming from the EAs developers.
But at that point my friends ask: but if I have to do all that job, why trade with EAs and simply not trade by myself?
First, because trading with EAs you can have use strategies that you won’t ever be able to use by trading manually. I personally believe that good EAs are not manual trading system into electonic format. They don’t work. But there are many exclusively mathematical trading system that work best when it’s a computer to handle them. Our brains are not good in calcs… let computers do what they are best for. Correlations, arbitrage, grids, and many more are perfect to be run by a computer and impossible to handle manually.
Second, who said that you can’t do both? That’s what I do when I have time for example. I still love to trade manually and have a set of trading systems that I developed with time that I use for manual trading (and won’t ever convert into an EA as they are not good for that) that work flawlessly.
Third, nobody is trying to convince you to trade with automatic tools. You are, and always be, free to trade with whatever you want. If you don’t feel comfortable in trading with automatic tool, don’t do it. The world would be a much better place if nobody would think that he/she has got the real TRUTH. No more Crusades, please. We should have evolved from that point. The market is large enough for all of us, and we are wrong (and you’re the only ones to be right) please let us do our mistakes and learn. I’m sure you made yours and you learned much more from your failures that from your success. Or you are so good that skipped the “I made a mistake” phase?
Personally I continue to do mistakes. Many. At least I pretend not to do the same ones. For that reason, Crescendo will be my first and last public EA.
I’m very proud of Crescendo. In the hands of someone with the right attitude is the best EA commercially available. No other developer/trader explained so in details the whole strategy. No other developer/trader keeps their users updated of all the development he/she’s doing and works so much in improving it. Some say that the fact that the 4th version is coming (after 6 months) is not a good sign. Well all the best EAs out there are updated frequently, and that’s what it keeps them working. Also, since Crescendo has been released I decided to dedicate most of my time to it’s development. That gave me the opportunity to improve it. Also the first two versions were mainly bug fixes.
Not all the retail EAs are scam. Trust me. What I do with PimpMyEA is that. Is try to “fitler” EAs that based on my knowledge, experience and “reverse engineering” that have potentials. Since PimpMyEA it public (3 months now) I reviewed only a very very small part of the EAs, manual trading systems, etc. that has been released: 5 EAs (Crescendo included!) out of hundreds!
I can’t guarantee anything other than my dedication in finding something good to be traded. I can’t be responsible if they have support issues or if then we find some bug that needs fixing. I try to do my best to fix and work on any possible issue, by contacting the authors and work in between you and them. Most of you know how hard can it be to have problems solved.
I don’t live from selling EAs. I WANT TO BE VERY CLEAR ABOUT THAT. I’m a trader. An automatic trader. I live out of my EAs trading on my live accounts. The money I got from selling EAs are a small part of my incomes. Less than 10% usually of my monthly incomes. But as I spend time doing that, I suppose there’s nothing wrong in being “rewarded” for that.
Last thing… unfortunately, trading is not “completly” an analog game. Some of the recent events are demostrating that the game is more and more handled by digital systems. And so it’ll be more and more in the future. It’s ineviable. Better be prepared. So, my incredibly good manual traders, open your mind a little.