Debunking The Top 6 Misconceptions About Trading Forex With Expert Advisors
There's no doubt that trading with an EA comes with a whole host of benefits, however on the flip side - it also comes with a myriad of common misconceptions.
In this blog post, we'll address and debunk the six most common myths surrounding the use of EAs in Forex trading.
1. EAs Guarantee Consistent Profits
One of the most common myths is that EAs assure steady and consistent profits. The truth is, while EAs such as our POW Banker EA can automate your trading and help you achieve big things - it does not guarantee profits.
Why?
Because even the best tool in the world can be useless in the wrong hands.
This is also one of the reasons why we decided to switch to an application process to join POW.
We only want people in our community who are willing to listen to our advice, put in the work and be growth minded.
Another important thing to remember is that the Forex market is inherently volatile and influenced by countless unpredictable factors.
An EA operates on historical data; it cannot predict future market movements with certainty.
2. EAs Eliminate Emotional Trading
Many traders turn to EAs with the belief that they completely eliminate emotional decision-making.
While it's true that EAs operate on logical algorithms and predefined rules - which do help remove much of the emotional aspect - the trader's emotions still play a role.
Largely dependent on an individual's personal circumstance, level of experience and of course - their risk management and appetite.
You also have to take into consideration that setting up the EA, backtesting its parameters and filtering results all take time and require patience (we have tools that help simplify this process).
Then lastly, there’s managing the psychological aspects of profit and loss which are all still in the trader's hands.
3. Set and Forget - Plug and Play.
A common misconception is that EAs can be set up and then left to run on autopilot indefinitely - set and forget so to speak.
However it’s important to remember that market conditions change and what worked once, might not work again in the future.
Which is why the Banker EA is so unique.
We don’t believe in a ‘one size fits all’ approach.
In fact, we encourage and show all our members exactly how to stay in line with current market conditions by using robust testing and walk forward analysis - this helps our members stay on top of the curve and be profitable all year round.
We also make regular updates which not only help improve the dynamics, but also the effectiveness of our Banker EA.
4. All EAs are Similar in Performance
Not all EAs are created equal.
The performance of an EA depends greatly on its programming, strategy, and how well it aligns with current market conditions.
Some EAs are designed for specific market environments, like trending or range-bound markets and their performance can vary significantly under different conditions.
Luckily the POW Banker EA covers pretty much all of them.
Whether you want to trade with the trend, in a ranging market or against the trend - we have a setting for each.
We then teach our members how to create a fully diversified portfolio by covering all of the above…
Yep, it’s a game changer.
5. EAs are a Quick Fix for Unprofitable Trading
Some traders turn to EAs hoping to quickly fix an unprofitable trading strategy or to make a quick buck.
They believe that trading with an EA is a quick fix to their problem as they are removing the human aspect of manual trading, however this is not the case.
While EAs can enhance trading efficiency and discipline, they are not a magical solution to underlying trading problems.
You can still take big losses and blow your account, especially if you lack a certain level of understanding and knowledge as to how the EA works.
Successful trading - automated or not - requires discipline, patience and of course sound risk management.
6. EAs Make Forex Trading Effortless
Lastly, there's a belief that trading with an EA is effortless.
While EAs can automate certain aspects of trading, you still need to consistently apply yourself, upgrade your knowledge and put in the work to be profitable.
Trading with an EA demands a significant amount of effort, dedication, and resilience to adapt to the ever-changing market.
At POW we provide you with the tools, knowledge and process to help you - but it’s YOU who must make it happen.
Conclusion:
Expert Advisors can be powerful tools for Forex trading, but it's essential to approach them with a realistic understanding of their capabilities and the level of commitment required to be successful.
Hopefully this blog has helped debunk some of the most common misconceptions we often see and helps you - as a trader - better prepare yourself for the challenges and opportunities that come with using an EA in the Forex market.
Remember, success in Forex trading, with or without an EA requires knowledge, discipline and a lot of patience.
If you think you have what it takes, feel free to get in touch and we can see if you’re a good fit for our ever growing community.
