Short verus Long Term Profit Expectations : Why Expert Advisors are So Deceitful

One of the most common critiques made towards me and my website by several people is that I often make evaluations of expert advisors that contradict what people experience during short term periods. Le me explain myself a little bit better, sometimes I say that an expert advisor is not likely to be profitable or is not worth buying and then I get some comments telling me “oh, I have made money with this ea, you are not right”. Well, to err is human, and I would be very happy if one of the expert advisors I have reviewed that I first said was not profitable turns out to be an incredibly profitable trading system but those are not the odds.

The objective of this post is to tell my readers and future visitors why I will most of the time receive these comments and why they do not contradict or invalidate my opinions about the different expert advisors. This situation arises mainly because most commercial expert advisor systems are designed to give short term satisfaction. That is, most of the people who buy commercial systems such as robominer, fabturbo, megadroid, etc, are looking to be rewarded almost as soon as they put their expert advisors to the test.

The consequence is that the ea market has adjusted to this demand and created a lot of expert advisors that trade very frequently and take profits very easily. That is, they are aimed at taking advantage of the market on low time frames to give the trader instant gratification. Since the probability of losing is small, most ea customers will start to trade the system and will feel very good about their new strategy to make money. This also has the advantage of creating a very high customer satisfaction on a very low time scale. Therefore, most of the people who buy the ea will make some money from it in the short run and will not ask for refunds since they are satisfied by their expert.

The problem comes when you look at the systems that are long term profitable and the ones that are not. Systems that tend to exploit short market movements with a low probability to lose tend to have very large risk to reward ratios and are, all the time (in my experience), unprofitabe in the long run. So yes, people buy the system, they get maybe 3, even 6 months of profitable results, then their accounts are wiped out by the ea starting to cash on it’s market exposure.

This is logical and sound, no succesful trader I know has ever done so with a strategy that has an unfavorable risk to reward ratio. All of the good traders I know that have been making money for a long time do so with long term strategies based on reliable market logic, not on short term movements with huge risk to reward ratios. The appearence of this unprofitable long term experts is mainly a consequence of the people who buy them, the market just offers what people want, and this is what people buy right now, unprofitable trading systems that offer short term rewards.

So it is your decision, I will not try to sell a long term profitable expert advisor, no one would buy it since no one wants to experience the reality of profitable trading which most of the time includes a low winning percentage, a very favorable risk to reward ratio, opening very few positions each week, or even each month. I interpret these facts as the way the market preserves the 90:10 rules in a system were people are using automated trading systems. Ninety percent of the people focus on the commercial, short term solutions while only ten percent focus on the long term trading strategies that offer realistic returns with adequate risks and the rule remains true, 90% of retail forex traders using automated trading systems lose their money.

If you would like to learn more about commercial and free expert advisors I have reviewed 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 the article !

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