This is mainly because they don’t have good tested trading strategy. On the other hand having a strategy, means that you have clear rules about every market forex expert advisor with money management. And when the rules are clear this trading system can be automated. There are many advantages for the automated systems like – 24 hours trading, reaction speed,monitoring huge numbers of financial instruments in different timeframes, the ability to backtest the system and many others.
Automating a trading system is difficult because it requires program skills which most of the traders don’t have. With this Expert Advisor builder such skills are no longer needed. In our big experience creating automated trading systems, we have found that usually simple things work. With every rule you add , you optimize your results in the past, but this will give you worst results in the future. So our advice is – keep things simple.
Now lets create simple trading system for example. This basically means this if the pre previous value of RSI is less than 30 and previous bar is closed with value for RSI over 30 , we have our open long condition. We skip Close buy and Close Sell and go directly to Settings tab. We want advanced MM so we check that option. Now we go to the last tab and press the Generate button. Now all we need is to copy the code and paste it in the MQL Editor, compile it and start using it.
All of the EAs that we program generally use one of three types of money management. I don’t really like that term, though. I believe that position sizing formula is generally more accurate. Lose a certain percentage of the account balance whenever the stop loss is hit. It’s far and away the most common method found in commercial EAs.
If you’ve watched any of the videos on this site or spoken with me, you know that I generally have a low opinion of most commercial EAs. Just because everyone does it does not mean that it’s a good idea! Whenever a customer order mentions the idea of using a Risk input to control the lot size for their money management, it typically means to use a selected percentage of the available margin. 2 lots, which is 2 mini lots.
The advantage to this method is that the lot size remains consistent barring a dramatic change in available margin. I don’t actually see that as an advantage, but many traders like seeing the same lot size on most trades. If you like to trade on high leverage and trade many different instruments, you can easily get yourself into a margin call. If your strategy calls for placing a stop based on price action, the amount lost will vary depending on where the stop is placed.
My favorite forex money management method is to select my lot size based on the equity loss if my stop is hit. The lot size decreases whenever the stop loss distance increases, and vice versa. The varying lot size drives most traders crazy. I believe such rationale ignores the logic of trading.