Tip:
Highlight text to annotate it
X
Hi this is Shaun Overton with OneStepRemoved.com in this video we are going to talk about
Expert Advisors and warning signs and things to watch out for the first is anything that makes a
performance guarantee is a gigantic red flag that you should avoid 100% of the time the reason
for that is nobody knows what the future is and nobody know how their strategy or expert advisors
is going to react to unknown future market behavior so even if somebody guaranties
something realistic like a percent or 2% a month or something outrages like thousands of
percents every year the point is that because you cannot know the future its unethical
and immoral to make any performance guaranties if you see that I suggest strongly that you should
not get involved the next item is it has to do with the way the EA behaves so if you are demo
trading or trading on a live account which I don’t recommend unless you have done a lot of
research if you are looking at how the EA trades and you see that legs in where it enters and
order and then the market moves against it and it enter another order that can be a legitimate
strategy but what I found is that most of the time it’s not the result of careful research it’s just
throwing mud at the wall and hoping that eventually everything works out if you see that these
new orders are getting of an increasing larger size that’s referred to as the Martingale strategy
and if you see that I strongly suggest that you not use that ever and I know that’s going
to be controversial with retail traders but fact of the matter is I have seen hundreds of EA’s
many of them that use Martingale strategies and every single one if you run it long enough it will fail
it will fall apart and it will lose the entire account balance that’s my experience and I am sticking to it
so if you see a Martingale strategies I suggest you go the other way the next thing is
if you are running the EA and you see that it hedges there is no mathematical reason why you
should hedge I don’t think hedging is a good idea any way but I will concede that it might have some
psychological merit for discretionary trader where they can put a win on the board and then the
next one will hopefully comeback and they can make some money on both sides but for an
automated strategy where there is no physiology involved there is no reason to hedge
let me give you an example if you have a by trade and the market moves all the way against you
then you decide it’s time to cut your losses by hedging as it’s the exact same thing as exiting
the market because the market comes further against you......you are losing the exact amount
that you are winning with the hedge the difference is that you only pay the spread once to open the buy trade
but with the hedge trade you pay it twice for the privilege of losing the same amount of money
so mathematically it makes no sense it just compounds the loss and if you see an EA
using a hedge I suggest that you don’t use it lastly is scalping the vast majority of traders that
are looking for free EA’s want to find something with a lot of bells and whistles that trades
in and out of the market constantly scalping can be profitable it can be wildly profitable
but I have seen and talked to thousands of trades and of those traders only a handful of are profitable
and of those only a tiny fraction scalp so you are talking about a tiny fraction of a tiny fraction
of people that make money with scalping the chances of you finding an Expert Advisor on the
internet for free or for a 150 bucks that does the same thing is minuscule to not going to happen
but if you do come up with your own strategy and you have some sort of logic behind it
that’s something I encourage you to purse but if you just see an Expert Advisor running
and it scalps and it makes a lot of money for couple of weeks but then blows up that’s not something
I would suggest running live money on and that’s the point that I am going to talk about next is
you definitely want to run an EA for more than a week or couple of weeks most of these Expert Advisors
if they are going to blow up they will do so within the first two months I suggest that
you either run it on a demo account or on a tiny live account with a few hundred bucks or may be
a thousand bucks and then if it blows up it happens but if it doesn’t this way you have done
your due diligence and your risk analysis to make sure that you feel somewhat confidence about the future performance
If you have any question or comments I expect them you find me at
www.OneStepRemoved.com
or you can Email info@onestepremoved.com
My name is Shaun Overton, Thank You for listening.