Why your losing so much money… Characteristics of most people who buy an EA

During the past few days I have tried to put all my thoughts about EA customers together so that I can get a clear view of their profile. It is very important to know what people usually think when they buy an expert advisor because this shines light into the reason why EA sellers use the tactics they do and it also helps me device counter tactics to at least save some people from the claws of the many unethical EA sellers out there.

So why do so many people lose their money out there on systems that don’t work ? What are the general characteristics of the people out there looking to buy an automated trading system ? Well, I have found out through a lot of asking and interacting with lots of traders that this is generally what describes people looking for an automated trading system :

  • Lack of Trading Experience : Usually traders who are out there looking for an automated system lack substantial trading experience. Most of them have not been trading forex for more than one or two years and most of them have never had a profitable year of manual trading. However, the majority have actually never traded for more than 3 months and even some have just heard about the forex market, days if not hours before going through the EA websites.
  • Lack of Understanding : This is perhaps the most important. People looking to buy an EA generally lack the understanding of what can and cannot be done. What can be profitable and what cannot, what makes a system long term profitable and what makes it fail bluntly. People, simply put, do not understand what they are doing. Well, picture yourself buying a train. You have a general idea of what you may want (faster, lighter, etc) but you would have no idea of how this is achieved or how you may verify what people tell you is true.
  • Bad economic situation : This is probably the worse one since it makes people the most vulnerable. People who are out there to buy experts are feeling quiet desperate about their financial situation or are about to feel that way. I found out that a majority of people looking for experts has been laid off, has gone out of business or are in some type of dire financial situation. This takes me to the next point.
  • They want to believe : Since people are in bad economic situations and are also ignorant about what they are doing, this makes them extremely prone to believe whatever people tell them. If it is not true, they don’t have the knowledge to know so and if it is… Well… Sadly when people tell the truth, there will be someone out there telling more attractive lies. So if people find an EA that makes X a year (for real) and then they see an EA that says can make 1000 times X and they are told through some almost fictional evidence that it is true, then they will believe the later and lose all their money.
  • They want results in the short term : Well, of course, if you are in a bad economic situation and you are told you can make a lot of money, then you want to make that money fast. People who look for experts generally want very short term results. And they get them ! Most commercial experts out there are made to produce short term profits, then wipe accounts in the long run. Of course, if people are ignorant, they don’t know that profitable trading is a long term thing.
  • They want a forex ATM : People usually want to profit the forex market in a regular fashion, with no draw downs and then go every month and take out money from the bank. Like if forex was an ATM, people want to just take money out of it every month. However, the financial markets do not work like a 9 to 5 job and they will not pay you money every month. Profitable trading systems like the turtle system and the god’s gift ATR can have several months of draw down. People are not able to deal with this, because they believe it can be avoided.
As you can see, this characteristics are very hard to get rid off and they do make almost all the people who go out there in search for an EA lose the little money they have left and fall into even deeper financial stress. I have even heard cases of people who took lones and were even in a deeper mess after dealing with automated trading system. If you would like to know how you too can become profitable using stable, long term free trading systems with realistic profit and draw down targets please consider buying my ebook on automated trading or subscribing to my weekly newsletter to receive updates and check the live and demo accounts I am running with several expert advisors. I hope you enjoyed this article !
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One Response to “Why your losing so much money… Characteristics of most people who buy an EA”

  1. Maxim says:

    Additional reason

    First of all, thanks a lot for your blog!

    Additional reason of going to the automatic trading is just lack of time to do manual trading. I can't look into the screen even once in 4or 8 hours…

    Maxim

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