Expert Advisor (EA) or top forex robots are very popular these days. It happened after releasing of the MetaTrader 4 trading platform. There are many commercial EA and so many scams that have made it difficult to find a robot that truly works.
As a result, you also need a robot according to the appetite for risk. When you’re going to invest the money, this is vital to test a robot using a demo account. And it would help if you did back test on its historical market data.
In this case, you can choose the STP forex broker that helps you with your trading with micro-lots. It works to start valid trading without higher risk. Moreover, it works to see whether the EA or the best forex robots go well with the broker or not.
Finding the Statistics of an EA
If you want to avoid scammers, avoid choosing an EA that a website has not tested. It’s a great idea to filter the offers of EAs by looking at their stats on some independent site. These sites include the forex peace army or myfxbook. Let’s get an example: EA of Vortex Trader Pro has tested on two sites with your real account.
Its results seem nice. But, the past performance doesn’t guarantee its next performance. You know, if you go with automated trading, it has significant risk. The EA has indeed displayed profits for the last two and half years. But, it just has lost funds in 2 months out of 30. In all sorts of industries, robots do not perform well (trending, volatile, and range-trading).
It is not enough to only pick the right robot to get good results. You must also learn how it works to adjust the settings according to the business style and risk perception you seek. You’ll actually lose your money after a while if your goal is to buy a robot to make it operate independently without supervision. There is no ideal robot in any form of the market!
Analyzing an Expert Advisor/ Forex Robot: The Profit Issue
The issue of profit is a great and important thing as stats on analyzing an EA. It helps you to get the answer to a vital question: Can the robot create money? Also, the profit issue is significant because it indicates the relationship between risk and profit.
A robot is indeed profitable. But, it has a risk of your all money remains in the account. So, this type of robot is not a deal to work with. Let’s know how you can calculate your profit:
Profit Factor=whole profit (it’s the sum of all winning trades) / whole loss (it’s the sum of all losing trades)
Its means you should eliminate this soon if its profit factor is less than one. This is why you should choose an EA with a large profit factor.
The Bottom Line
If a robot takes lots of risk on every trade, it’s not good even if it makes enough money. There is a Drawdown that’s a great risk indicator for trading. It’s because it shows the previous amount of highest loss that has been recorded since the most recent higher point.