Hello precious traders, I see all over utube and internet the use of AI and robots to trade profitably. Do we need to buy these programmed robots or is it like any strategy that is shared over the web and try to follow it ? I guess it is like a strategy, some are good and some are not. I would be very sceptical and nervous about letting a robot trade for me. What do you think ?
Should I buy an AI?
- Thread starter Alexis_0
- Start date
According to me, buying an EA is nothing but a waste of money because it is not profitable and it makes traders dependent.
Hello! Your observations and concerns about AI and trading robots are quite common among traders. Let's break down the subject:
1. **Availability:** Trading robots (often called Expert Advisors or EAs in platforms like MetaTrader) can either be purchased, rented, or even found for free. There are many available online, especially on dedicated marketplaces for trading algorithms.
2. **"One Size Fits All"?:** Like manual trading strategies, not all trading robots are created equal. Their profitability can vary based on market conditions, asset classes, and timeframes they're designed for. Additionally, past performance doesn't guarantee future results.
3. **Transparency:** When purchasing or downloading a robot, you might not always know how it's making decisions unless the algorithm is shared openly. This lack of transparency can be uncomfortable for many traders.
4. **Adjustments:** Markets change, and what works today might not work tomorrow. Manual traders adapt their strategies over time based on experience and market observation. Robots, unless designed to be adaptive (and doing so correctly), might become outdated.
5. **Overfitting:** Some robots are over-optimized to perform exceptionally well on past data. This phenomenon, called overfitting, can lead to poor performance in live markets since the robot is too tailored to past conditions and not flexible for the future.
6. **Costs:** Some advanced or reputed trading robots can be quite expensive. Plus, if they trade frequently, they could rack up significant commission and slippage costs.
7. **Safety & Scams:** The market for trading robots has its fair share of scams. Some robots can be maliciously programmed to behave unpredictably or even access personal data.
**Things to Consider:**
1. **Backtesting:** If you're considering a trading robot, backtest it on historical data. But remember, past performance is not indicative of future results.
2. **Start with a Demo:** Before going live, test the robot in a demo account to understand its operations and risk management without real money on the line.
3. **Research:** Look for reviews, and perhaps even reach out to other users to understand their experiences with the robot.
4. **Custom Development:** If you're familiar with coding, you could develop your own robot based on your strategy. This way, you know exactly how it operates.
5. **Hybrid Approach:** Some traders use robots to manage routine tasks while retaining manual control over actual trade execution. This approach gives some automation benefits without fully relinquishing control.
6. **Continuous Monitoring:** Even if a robot is trading on your behalf, it's essential to monitor its performance and intervene if things aren't going as expected.
In conclusion, while trading robots can be beneficial and offer a form of automation, they come with their set of challenges. If you're skeptical or nervous, trust your instincts. It's crucial to understand and be comfortable with any tool or strategy you're using in the markets.
1. **Availability:** Trading robots (often called Expert Advisors or EAs in platforms like MetaTrader) can either be purchased, rented, or even found for free. There are many available online, especially on dedicated marketplaces for trading algorithms.
2. **"One Size Fits All"?:** Like manual trading strategies, not all trading robots are created equal. Their profitability can vary based on market conditions, asset classes, and timeframes they're designed for. Additionally, past performance doesn't guarantee future results.
3. **Transparency:** When purchasing or downloading a robot, you might not always know how it's making decisions unless the algorithm is shared openly. This lack of transparency can be uncomfortable for many traders.
4. **Adjustments:** Markets change, and what works today might not work tomorrow. Manual traders adapt their strategies over time based on experience and market observation. Robots, unless designed to be adaptive (and doing so correctly), might become outdated.
5. **Overfitting:** Some robots are over-optimized to perform exceptionally well on past data. This phenomenon, called overfitting, can lead to poor performance in live markets since the robot is too tailored to past conditions and not flexible for the future.
6. **Costs:** Some advanced or reputed trading robots can be quite expensive. Plus, if they trade frequently, they could rack up significant commission and slippage costs.
7. **Safety & Scams:** The market for trading robots has its fair share of scams. Some robots can be maliciously programmed to behave unpredictably or even access personal data.
**Things to Consider:**
1. **Backtesting:** If you're considering a trading robot, backtest it on historical data. But remember, past performance is not indicative of future results.
2. **Start with a Demo:** Before going live, test the robot in a demo account to understand its operations and risk management without real money on the line.
3. **Research:** Look for reviews, and perhaps even reach out to other users to understand their experiences with the robot.
4. **Custom Development:** If you're familiar with coding, you could develop your own robot based on your strategy. This way, you know exactly how it operates.
5. **Hybrid Approach:** Some traders use robots to manage routine tasks while retaining manual control over actual trade execution. This approach gives some automation benefits without fully relinquishing control.
6. **Continuous Monitoring:** Even if a robot is trading on your behalf, it's essential to monitor its performance and intervene if things aren't going as expected.
In conclusion, while trading robots can be beneficial and offer a form of automation, they come with their set of challenges. If you're skeptical or nervous, trust your instincts. It's crucial to understand and be comfortable with any tool or strategy you're using in the markets.
Did ChatGPT write that?
AI can help you to quickly code trading ideas, i.e. create rule-based trading system in some language like C or Python, recent developments showed they are good at processing text but I don't think much progress has been made in employing AI directly in trading.Most youtube videos about that are likely attempting to ride the wave of hype around AI and lure traders that look for ready trading solutions.