This may answer why robots seem never to work for very long on a live trading account.
I was reading a thread yesterday for a simple break out strategy and I noticed a comment by SteveHopwood about testing robots and the apparent differences with demo results compared to live results:
http://www.forexfactory.com/showpost...&postcount=233
I’ve got a little bit of first hand knowledge about this, so I thought it may help to share.
Before I started trading myself, I had a very interesting job which has allowed me to meet and interact with all sorts of people from the top tiers of society around the world (multi-Millionaires, Billionaires, politicians and a few sovereign state Monarchs). So although I am not from that group myself, I was lucky enough to mix in those circles. By chance I got to know the owners of an online retail brokers based in Switzerland which some people on this forum may trade with.
During some conversations we got on to the topic of robot trading, and particularly MT4. At the time this particular broker was just starting the process of introducing MT4 to their platform. Some of you who have been around for a while will remember that not all brokers have always offered MT4, and some seemed particularly slow to offer it. I was just starting to take an interest in trading so I asked them why they didn’t currently offer MT4 as it appeared to be the preferred option that retail traders wanted, and why it was taking so long to set it up with their system. Their reply shocked me and is the reason why I personally have never and will never let a robot of any description trade for me.
They explained that some robots are extremely profitable, and the good ones would put them out of business. So before they could let any automated trading take place on their platforms, they had to program their own software to be able to compete and disrupt the robots their retail clients used. The reason it took brokers so long to integrate MT4 was because the broker’s tech boffins had to configure it and tamper with it to make sure that when it detects a robot trading, it can cut in and manipulate it to make sure it never makes money. They basically had to rig the platform against robots, and this takes time to do properly.
Such tampering and rigging does not need to happen with demo accounts, and this is why robots often appear to work fantastically in demo mode, and then crash spectacularly in live mode. Your MT4 broker is working behind the scenes to counter your robot and make sure your money gets deposited in to their accounts instead of letting you withdraw their money to yours. Some of the well known “miracle overnight riches” robots that are sold prolifically on the net for a mere $100 bucks, have been thoroughly decompiled by the brokers and have separate programs written and installed on the platform to make a joke of them, (no wonder everyone wants a refund!!!).
It was clear to me and to them that robots can and do work. I actually know a hedge fund manager in Geneva who uses “robots” on high frequency to conduct a huge percentage of their overall trading to make spectacular amounts of money (of course he is at genuine institutional level and doesn’t go near MT4 or retail brokers). But so long as you are using MT4, it is almost certain that the game is severely rigged against you and your robot will eventually drain your account.
This post is not my attempt to discredit robots or automated trading, but I thought it would be useful to some of you on this forum who are either heavily involved in the programming and use of EA’s, and those of you who are hoping that a robot in MT4 is going to be the answer to your prayers. My understanding from people right at the heart of the retail industry is that they will do everything they can to make sure your MT4 robot fails.
I was reading a thread yesterday for a simple break out strategy and I noticed a comment by SteveHopwood about testing robots and the apparent differences with demo results compared to live results:
http://www.forexfactory.com/showpost...&postcount=233
I’ve got a little bit of first hand knowledge about this, so I thought it may help to share.
Before I started trading myself, I had a very interesting job which has allowed me to meet and interact with all sorts of people from the top tiers of society around the world (multi-Millionaires, Billionaires, politicians and a few sovereign state Monarchs). So although I am not from that group myself, I was lucky enough to mix in those circles. By chance I got to know the owners of an online retail brokers based in Switzerland which some people on this forum may trade with.
During some conversations we got on to the topic of robot trading, and particularly MT4. At the time this particular broker was just starting the process of introducing MT4 to their platform. Some of you who have been around for a while will remember that not all brokers have always offered MT4, and some seemed particularly slow to offer it. I was just starting to take an interest in trading so I asked them why they didn’t currently offer MT4 as it appeared to be the preferred option that retail traders wanted, and why it was taking so long to set it up with their system. Their reply shocked me and is the reason why I personally have never and will never let a robot of any description trade for me.
They explained that some robots are extremely profitable, and the good ones would put them out of business. So before they could let any automated trading take place on their platforms, they had to program their own software to be able to compete and disrupt the robots their retail clients used. The reason it took brokers so long to integrate MT4 was because the broker’s tech boffins had to configure it and tamper with it to make sure that when it detects a robot trading, it can cut in and manipulate it to make sure it never makes money. They basically had to rig the platform against robots, and this takes time to do properly.
Such tampering and rigging does not need to happen with demo accounts, and this is why robots often appear to work fantastically in demo mode, and then crash spectacularly in live mode. Your MT4 broker is working behind the scenes to counter your robot and make sure your money gets deposited in to their accounts instead of letting you withdraw their money to yours. Some of the well known “miracle overnight riches” robots that are sold prolifically on the net for a mere $100 bucks, have been thoroughly decompiled by the brokers and have separate programs written and installed on the platform to make a joke of them, (no wonder everyone wants a refund!!!).
It was clear to me and to them that robots can and do work. I actually know a hedge fund manager in Geneva who uses “robots” on high frequency to conduct a huge percentage of their overall trading to make spectacular amounts of money (of course he is at genuine institutional level and doesn’t go near MT4 or retail brokers). But so long as you are using MT4, it is almost certain that the game is severely rigged against you and your robot will eventually drain your account.
This post is not my attempt to discredit robots or automated trading, but I thought it would be useful to some of you on this forum who are either heavily involved in the programming and use of EA’s, and those of you who are hoping that a robot in MT4 is going to be the answer to your prayers. My understanding from people right at the heart of the retail industry is that they will do everything they can to make sure your MT4 robot fails.