The Faculty of Flat Break that teaches the FLAT BREAK Trading System has become widely popular among users of the MASTERFOREX resource. It is no huge secret that both I and people that have studied the system use automated trading. Let's look into ways in which automated trading differs from manual trading, as well as major advantages and disadvantages of expert-backed trading.
What is the difference between manual and expert-based trading? Firstly, the expert has no fear of losses. Most importantly, it has no desire to close a profitable trade too early. All traders are aware of the saying 'Cut your losses and let your profits run'. Beginner traders act just the other way around: they easily keep a huge drawdown but close the trade as soon as profits start to appear, as shown in the figure below
or this way
For example, the trader finds a good entry, but his nerves fail, and he exits straight away to look at the chart at the end of the day and think: 'Why am I so stupid? I could have taken a few times more...' The expert, on the contrary, will trade by the rules of the trading system and will meet MM rules. It will not exit a trade too early or late. These are main pros of robo-trading which have unquestionable advantages over manual trading.
But I don't believe there is an expert labeled 'Holy Grail'. There is none. No program can work profitably forever. There are no such programs. So, let's not idealize the expert because some might think that it only takes to install the expert to solve all your problems.
Brief history. My focus was drawn to auto-trading in 2006. The World Championship was held in 2007. It involved over 600 software developers from all over the world. My expert came 6th. Of course, it isn't the first prize nor even second. Still, getting into Top Ten of the world's best developers isn't that easy.
The expert automatically traded for almost 3 months and took 90 days to increase the account from $10,000 to $35,000. The expert's MM limits were very high, and last days' entries were made with 15 lots. The expert was trading on the verge. In real trading a normal trader would not use a lot like that on such an account. The terms of the competition left me no other way out: either you use high-risk MM or say 'goodbye' to first prizes.
Of course, a system can operate in a fully automated way, but only for some time. Then market conditions change and the expert will start losing. For the expert to continue making money, you got to redevelop it, i.e. release new versions, introduce optimizations which will take changing market conditions into account. This is why you should understand the mechanics of testing and be good at optimizing.
This is how I came to the conclusion that it is semi-robots that yield staggering results as they are controlled by the trader and can be stopped in time to be optimized for new conditions and restarted later.
I started developing semi-automated systems which are easily optimizable and simply need the trader to correctly indicate the trend himself. The expert takes care of the rest.
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These screenshots show trading with a semi-automated expert designed for the FLAT BREAK system.
The expert has quite a few parameters, unusually many. However, this allows the system to be flexibly adjusted because the market is not a simple substance and cannot be described with 3-5 parameters. Most importantly, you don't have to look for the signal as the expert will do it. If there is a signal, the expert will make the entry. If there's none, it won't.
Therefore, trading becomes more convenient and comfortable. I won't follow the price in front of the monitor - I simply adjust the program for certain entry conditions. I don't have to see when the trade goes into the positive territory to move my stop to breakeven - the program will do it itself. In addition, the program will not exceed lots, not violate MM rules. The system will surely put the stop-loss as required by rules. As a result, with my expert I don't have to sit in front of the monitor and can easily deal with other business. Of course, in this way, the expert is better than a trader in that the human being is exposed to emotion, fear, error. The expert has none of these problems.
What are the advantages of semi-automatic trading? Following 5-6 currency pairs is quite problematic for a trader and easy for an expert as speed and RAM of modern computers are enough for that. The expert won't miss a trade if the necessary signal emerges on one of the pairs while the human would have to follow it on all traded pairs (especially if there are ten of them or more).
I have worked with semi-robots for a few years and spotted all advantages of automated trading long ago. I have seen disadvantages as well. For example, I experienced this with www.nwbroker.ru. I ran my expert on a relatively small amount of $500, set MM as very aggressive and the expert made 30% on my capital virtually on 5 trades overnight. Next day I was blocked out on the pretext that I made mistakes when opening the account and filling in my details. Of course, this was a lie, the account was opened adequately and correctly. What I was unblocked after a few letters and calls, I found out that NWBROKER turned off robo-trading for me. I got a cynical response to my question that the Broking Services Agreement has no single clause on robo-trading and they are NOT obliged to support automated trading.
What can I say now? Don't open accounts with such dealing centers as www.nwbroker.ru
This is how one of my experts performs
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I tried to show advantages and disadvantages as well as define SEMI-AUTOMATED systems, but it's up to you whether you use experts or not in your trading.
You can come to the Faculty and talk to me. If you are interested in having your own semi-automated system developed, you can order it.
This is where you can study as the Faculty has a few Departments that teach to work both with and without experts.
Yuriy Zaytsev, Dean of the Faculty of Flat Break; Automation; Auto-Trading
