› Trading online: Robot versus Human.

Trading online: Robot versus Human.

1.05.2019, 16:31

Many traders consider using trading robots sooner or later. How appropriate is this solution? Is manual trading really inferior to robots? Is it true that trading advisors can get more profit? This article is aimed to find answers to these questions.

What is more profitable?

Expert Advisors or manual trading is definitely hard to say. The only thing we have is quite a few examples of forex contests in which trading robots take precedence over manual trading. At the same time, manual trading is a classic type of trading and is very popular, despite various factors.

With the release of news about the crash of an aeroplane, stuffed with electronics using the latest technology and killing a dozen or even hundreds of people, the notorious concept pops up - the human factor. In this case, the designers try to predict, foresee and reduce the risk of the occurrence of such an event due to the maximum automation of processes in the event of all possible situations.

Trading has the same approach. What is considered a mistake: the loss or diversion from the rules of your trading system? Obviously - the second, since on the one hand getting a loss when trading is quite a natural phenomenon, but on the other hand, getting a loss, knowingly departing from its trading rules, is a miscalculation. Each trader, trading "hands", performs operations under the influence of their psychological characteristics. At some moments, emotional stress leads to errors.

Reasons for traders’ mistakes.

The list of reasons which lead to such mistakes is traditional:

External factors. For example, the onset of an unplanned event of a fundamental nature: a statement by the head of the Central Bank, the publication of revised statistical reports, etc.;
Automation and disadvantages of information support. For example, a person cannot keep thinking of complex algorithms consisting of a large number of elements every second;
Psychology of trading. Errors caused by the psychological state and individual properties of a person. There are a lot of examples: emotional tension, excessive impressionability, impulsive behavior, reduced attention.

In addition, when making decisions in the conditions of time shortage in unusual situations in the market, the reasons for the occurrence of errors may be a lack of information.

Or maybe some kinds of traders: intuits, techies and fundamentalists are still less susceptible to all sorts of factors? The data are shown in a Table 1 below.

Trading online: Robot versus Human.


Autopilot trading. Pros and cons of using automated advisors.

The advantages of using trading robots are obvious by the first factor - time. We put an adviser and 24 hours we have "untied" hands. The robot takes over the entire intellectual part. A man, alas, cannot trade around the clock. A trader can at this time be engaged in testing other trading systems, filling up his arsenal with new advisors. In any case, this time can be devoted to his beloved.

Accuracy. A trader makes a lot of mistakes: from simple ones - we look at the chart of one currency pair, and we open deals according to another, before opening a deal with the volume that was not intended during money management.

Speed. A trading robot can track several financial instruments at once, and moreover, open trades in a fraction of a second upon the occurrence of an event specified in the code.

Story. To test on the historical data of the adviser is a very convenient and demonstrative property of its trading. Manually make it harder. First, over time, longer, secondly, when testing by hand, we will see what we want, and thirdly, the statistics collected by the strategy tester are much more revealing than handwritten.

Trading online: Robot versus Human.


Emotionality. Much has been written and said about the emotions of a trader. Books by Lars Tweed or Thomas Oberlehner talk about it in all its glory. Methods of psychological attitude are also quite a lot. In the robot, emotions are disabled.

Flexibility. Advisor loses in unusual, sometimes extreme situations because of acts according to its prescribed algorithm. The person acts on the case. The outcome of such actions is difficult to assess. But, during the release of essential news, the same Non-Farm Payrolls or currency interventions, the trader tries to keep on this movement, contrary to its rules.

To date, there are practically no problems with writing an advisor. There is a mass of literature, webinars and articles on the network programming, where all steps are stated. In the end, according to a given algorithm, an adviser can always be ordered from programmers who are professionally involved in this.

Advisors expand the concept of working in the market. Their advantages over manual trading benefit in many ways. It is necessary to be entirely trusted to any robots with the most beautiful description and treat them as tools or automation methods, and not as a typewriter of money that will solve your financial problems. It remains an unsolved task - to follow the robot, and this is the task of a living person. All success in the trade!


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