Pros and Cons of Trading robots

By mellissaangel on January 22, 2011 In Uncategorized

Over the past 10 years appeared many of online shops which trade trading robots (or expert advisors, or automated trading system). Expert advisors began to use on the foreign exchange and stock market. What is an expert advisor? Let’s look at this!

Automated trading system is a complicated soft, which by virtue of the structure changes are collecting data on the preferred parameters, produces processing and assay and, later, gives info in a ready form for a broker and performs few action. The main goal of automated trading systems – conduct an individualistic trade by purchasing and selling bonds or currency.

Expert advisors have many advantages, we list the main ones:

1) The speed of info forming – automated trading systems can simultaneously control thousands of quotations.
2) Accuracy – in the mortgaged program automated trading systems are not at any time wrong. This does not eliminate the standard error in the program.
3) Lacks of emotion – trading robots do not know the feeling and indecision.
4) Non-stop monitoring of the foreign exchange market . Expert advisors – not a trader, because they do not need rest.
5) Flexible structure, which can be reprogrammed at any time.
6) Expert advisors are necessary for scalping.

But besides automated trading systems have a solid set of drawbacks:

1) The main drawback – the difficulty of writing a program that requires estimate all possible options. One failure or one mistake in the program and at a critical time expert advisor will inflict loss, instead of help.
2) Trading robots have limited access to information. They command using only the knowledge exchange charts. Expert advisors can not analyze a press and review hearings. In these components trading robots will always yield to businessman.
3) Automated trading systems are devoid of intuitinstinct are not able to exclude non-standard solutions that can give a proincome save deposit from ruin.

Let’s get to the expert advisors from the mathematical point of view. Expert advisor is a program that incorporates a secure algorithm of transactions.Fx , however as the stock is a random formation, the elementary numerical characteristics of which make or become different over time. Any trading robot, which effective trading on a plot of time series with some numerical characteristics are likely not be money-making to trade on the part of the time array with other mathematical characteristics. So my opinion is: there is no especial trading robot, who ever makes a gain. Some trading robots work when there is the trend in the market. But other automated trading systems are working, when the market sideways movement.

Now let’s sum up. Automated trading systems are agreeable, self-respecting broker should not ignore their advice. Simultaneously, the broker should remember no one expert advisor will not replace him by his own head.

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