My Thoughts on Forex EA

Filed Under (Journal) by Casey on 24-05-2009

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For the past few days my brain wave was going on overdrive. My thoughts was going on and on about my approach on automatic trading. So much so that I eat thinking about forex, I bathe thinking about forex, I sleep thinking about forex. Hell! Even my wet dreams was about forex!

Every moment I was trying to get my thoughts together and trying to understand all these talk about principle, manual trading, automatic trading, what is possible and what is not, are they the same, should it be treated the same, what needs to be done, what approach should i take and most of it all….. will I be able to be successful in the forex market with with forex robot trading or automatic trading.

While I still haven’t got the gist of it… I will take my thoughts one step at a time.

Firstly, what is forex ea to me? Why should I use forex EA and not manually trade?

I mentioned before it is time. Forex EA will allow me time. Secondly I absolutely got no patient to sit in front of the monitor all day to scan for opportunity. Juggling 24 hours between work, family and friends, means one thing has to be sacrificed in order to fit forex manual trading into my life.

No.. it’s not those spend 20 minutes a day to scan for signals and set up your entry and exit point and leave your computer. If it’s going to be that sort of strategy and system, might as well I continue with automatic forex trading…

What I am talking about are the serious stuff of manual forex trading. The one where you sit down and scan for opportunity and enter and exit at the click of the bottom. Set it up, the whole sha-bang about manual trading to ultimately make my living by trading.

Honestly… I tried fitting forex into my work, family and friends schedule. And failed miserably… I wasn’t able to switch and settle my thoughts back and forth to be able to make forex trading a successful venture. Maybe I was not ready, maybe I did not have a mentor, maybe a lot of things…. Maybe it was just ME….

I have learned in seminars about manual trading, they say in trading 10% is the system while 90% is all me. Or was it 20% system, 80% me. Whatever it is… success in trading is base on me and not the systems. But me as a human, I looked outward of myself to find the holy grail of system to apply and use. Suffice to say… that took a lot out of me… money wise…

They say 90% is psychology. Have a trading plan and follow it strictly. Shut yourself out of all the ‘noise’ when you trading plan shows reveals to you an opportunity. And do not be afraid to pull the trigger to enter the market. Do not be greedy and exit the market when it is profitable and do not be fearful if you are wrong and the market goes against your favor. The skill in trading is to learn to be consistent and patient.

The art of winning is the ways of the worrier…. I remember reading a book call ‘The Way of the Warrior Trader ‘ by Richard D. McCall. where this trader was a martial arts specialist and who studies Japaneses Samurai culture and uses its profound philosophy, meditation, and calmness to trade the market.  It’s a good read…

But the point is manual trading is all about all the psycho stuff. Master your mind and you master the market sort of psycho stuff…

But with technology these days…. let’s face it. There is always a way around it. And the way round it is Forex EA. But I believe deep down Forex EA is only half the approach to mastering the market without mastering the mind

Why?

Forex EA or forex robot is a trading plan base on certain criteria of trading in a box. It is shut off from all these ‘noises’ and it does not judge. It listens to the market, or sweeps the market for signals. Once a signal is there, it executes. Either to enter or to exit. It does not give a rat’s ar$e if the trade is profitable, it just goes in and out according to it’s programming. It is consistent and patient in the market. The only thing that will stop it from trading is it’s master.

So how can this not be the ideal way to trade. With a press of a button, the robot goes flying into the forex market. Sweeping the market for opportunity.

And because of this understanding, I started to look for a robot to represent me in the market or rather be a slave to me which will do what it is suppose to do on the market for me. Trade in and out of the market, hopefully with more profits and losses.

Before I started this blog, I was doing just that… and that was when my new crusade began. A crusade in search of the  the next new holy grail of trading. Forex EA…..

As I started to look back, I could not feel how naive and ignorant I was. As time goes by I started to learn and adapt. I never taken note of these adaptation, but I was very much aware of it. I somehow or rather had an idea that, automatic trading or forex trading is not as simple as ‘set and forget’ but neither should it be as complicated as ‘be one with the market psycho stuff’

It is not as simple as ‘set and forget’ because it will still have an influences over our actions later rather then now as the markets moves. Our actions will only come about when it starts either make money or make losses. When we make money we increase our lots traded and when we make losses we get angry and say ‘Fu(k!! This EA is gawd dang $hite! Let’s look for another one’….

How many of you experiences this? Raise your hand…

Ok… so it’s only me.

Anyway, on the other hand automatic trading should not be that complicated. Forget being patient with the market. Forget about principles we trade in the market. Forget the market period. Why? Because I am not directly involve in the market. My robots are. I don’t get directly involve in putting a buy or sell order.

I just need to turn the robot on and sip my cup of tea while I start posting nonsense on my blog….

If I am not in the market, I should not be bothered by what trading rules I use, whether if I should be patient and all the other stuff which is required to be a successful trader.

I am however responsible for my money in the market and responsible for the forex robot that I have entrusted to plow the forex field for me. That is where some psycho $hit is needed. While I do not need to ‘Be One with the Market’ sort of psychological approach, I still need to learn some psychological bases about trading so that I can understand what I am doing about with my forex robots or forex EA.

So no… I am not a forex trader but I am in the ‘Business of forex trading’. I am a Forex EA manager. I manage these EA, I ensure that these EA do their job as per their programming. I ensure that they are doing their job right. If they are not, I just chuck them in the scrap yard folder right at the bottom of my hard drive.

That is what I am…

As a manager and owner of my own money… my responsibility is to look after my EA and recruit new EAs. Test them out and put them into the fields.

While there are not much psycho stuff to screw with your mind, there is however some ‘management’ skill that is required.

Just imagine you are a manager of say a factory. Your workers are employed to work on stuff to produce an end product. If a worker fu(ks you and your production, what is going to happen? Of course you will get pissed off and send the worker home to bed. If your workers does a job that it is suppose to do, then you are happy. You can sit in your nice office and fu(k around with whatever you want to fu(k around with.

A factory managers also control the bottom line. Everyday he/she would view his report. Makes changes to his production line to optimize and recruit new employers as one slowly expand their production line.

And…. on top of that, as a factory manager they have to have a policy or certain rules which the factory floor have to follow in order to the the best optimum output… no?

That particular policy and rules my friend in forex trading… is what I believe is call ‘the principles which I need to have to trade the market successfully’.

But I guess this needs to be rewritten, if I am not trading the market directly and I am using a robot to trade for me, then it should ‘the principles and rules which i need to put in place to ensure my Forex EA trade the market successfully and profitably’.

So while forex automatic trading does not really need to have a lot of whole bunch of psychological obstacle to overcome, one still need to overcome the problem one faces with managing a whole bunch of EA to help you trade the market.

(to be continued)

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