Trading Support

The EA may decide when to buy and when to sell for you, but you, the trader will ultimately decide on the most important aspects of trading the EA, just as you would with any discretionary trading system.

Eliminating emotions

One of the attractive features of an EA is that it allows you, the trader, to take a step back. Many traders believe that an EA will allow emotion-free trading. This is true only if you are able to allow the EA to trade without watching the trades unfold. Once you see the gains and losses that the EA makes, you are going to experience the same ups and downs, just as a discretionary trader would, only you may have a feeling of less control. The discretionary trader has the advantage of knowing where the decisions to buy and sell are coming from, but the EA trader must trust the EA's decision making.

Unfortunately, any trader who withstands a drawdown will experience negative emotions, just as you may experience a good deal of joy after a good run of profitable trades. The difference between the discretionary trader and the trader who uses an EA is that the discretionary trader acknowledges up front that trading decisions are emotionally charged, and there will be tough times and there will be happy times. Many traders who adoptee EAs fail to recognize that the very same emotions that correspond to ups and downs in the equity curve are going to be experienced by both EA traders and discretionary traders

One of the best ways to maximize the advantages of trading with an EA is to let the EA trade and to get out of the way. You may have to decide on some basic rules such as: Will you turn the EA off during important economic news announcements? Do you have a drawdown amount that will trigger a suspension of the EA? Will you increase the amount traded to maintain the same percentage risk as the EA increases the size of the account? Deciding on your rules at the outset, and sticking to these rules may be the best way to accentuate the advantages of EA trading.