Forex- 3 reasons why should not use expert advisors

forex – 3 reasons why should not use expert advisors

 As traders, we live in a world dominated by the automated trading. Some two decades ago, the robots were behind human beings when it was negotiated, but now the reality is that the trend has changed, with the robots head. However, I can talk about 3 reasons why should not use expert advisors when it comes to operate with your account- forex- 3 reasons why should not use expert advisors.

VPS costs

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An expert advisor is basically a robot learned to buy or sell when specific conditionsare met. Its programming is relatively easy and anyone with expertise in IT should be able to adapt to the MetaEditor or any tool of programming available for free- Forex.
Before developing an expert advisor, one needs a strategy that goes beyond the test of time. This can be done in two ways: or controlling in hindsight the strategy in the history to see what results offered in the last few years/months, or simply follow the strategy for some time to see if it works.
Assuming that both steps have been completed and the expert advisor is ready, must know how to apply it to a broker/chart it is not sufficient, since at the time that the Platform/team closes, the expert advisor simply will cease to operate. To overcome this, you need a VPS (Virtual Private Server or Virtual private server).
A VPS is a computer in a place separate that you guarantee that not is close the platform of trading during the week of negotiation. What’s more, actually assumes thatthe VPS does not close never unless some inevitable technical problem arises.
To gain access to a VPS, you must open an account at one of the VPS providers, paying a monthly subscription based on the needs of the server and follow the instructions on how to take full advantage of the VPS of your choice.
Using a VPS is a good way to overcome the problems associated with the trading platform, but there are monthly fees to consider that they should deducted from thegain that will produce the expert advisor, assuming that there are profits!

Execution and spreads

Operate with an expert advisor requires a broker and brokers differ much among themselves. The usual differences are offered spreads and speed of execution.
Spreads change in volatile markets or when there are key economic events such aswhen the NFP (nonfarm payrolls) report of United States. If your expert advisor is scheduled to open or close a transaction during the publication of the NFP data or immediately afterward, then the level of input or output will be different and the results will not match the test.
The implementation is also important. Let’s say that the robot has 10 pips stop lossfor a long position below the current market price and published an importantnews. Due to the ECN (Electronic Communication Network) used by brokers, it is virtually impossible for a broker to cover the order exactly at the desired level. Therefore, the current closing is farthest away. Thus, the test results do not match reality.

Lack of market conditions

Forex-3 reasons why should not use expert advisors

However, none of the above will be as problematic for the expert advisor as a lack of market. What does it mean?
He broker of Forex is forced to cover an order if there is a market, which means thatif you sells, should have a counterpart to buy, or if you buy someone should sell. That is a market.
What happens if there is no one to buy your sales order or to sell when you want to buy?

You could say that it is not possible in the Forex trading, but recent history tells us that things are not always as they are supposed to.
Last January, 2015, the National Bank of Switzerland (SNB) eliminated the bond of the EUR/CHF 1.20 creating a mess unprecedented in the Forex industry. Brokers werebankrupt, shops were arrested and the entire industry went into shock.


If it turns out that you had an expert advisor by buying the EUR/CHF before breaking the floor of 1.20 and had the stops slightly below 1.20, then any broker in the world would have helped him, since there was simply not a market after eliminating theminimum floor price.
In fact, for a few minutes (5-10 minutes) no one knew the real value in EUR/CHF pairsince there was not a market again. There were no buyers for sales orders to close long positions. So the consultant would be obliged to prolong the long until a market is formed.
The problem is that the market was formed around the level of 0,8700, which would have been the level where the consultant would have closed long positions. That would mean that the expert advisor would be giving all possible earnings earlier in theyear and not compensate the loss, showing why they operate online Forex risks when using expert advisors.

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