The Truth About Trading Forex with an EA

Far too many Forex traders approach the Forex market with the idea that Forex trading is about making money quickly. Forex is not a get rich quick solution. It is vital that you understand this concept well otherwise do yourself a favor and don't trade Forex at all. You must understand that you can accumulate a great deal of wealth by trading Forex but it will NOT happen overnight.

Use a logical and analytical approach in selecting your EA for Forex trading. The key feature I look for is consistency.

Closely examining accurate back test results is one method to use in evaluating the consistency of an EA. The first thing to look for in the back test results is the percent accuracy of the test itself. Look for a minimum of 90 percent accuracy. Next, look at the number of wins and the average amount won. Look next at the number of losing trades and the average loss.

When comparing back test results between EA's be sure you are comparing apples to apples. Compare lot sizes traded, percent accuracy and the results themselves. It would be nice if you could find an EA that never lost a trade. While I agree that such a 'holy grail' scenario is seductively attractive it simply is not realistic and you should beware of anyone promising such results.

Forex trading is all about numbers. The numbers that matter most in selecting your EA are the number of winning trades times the average win versus the number of losing trades times the average loss. This ratio will help you gauge the consistency of your EA. Trust me, if your average win were to equal your average loss then you can do extremely well in Forex if you win just 60% of your trades! Let's talk about two key money management dynamics that can make you or break you in Forex. The first is the concept of consistency. Being able to deal with changing market conditions is a far more important trait for
an EA than some pie in the sky promise of winning every trade. Winning consistently - even if they are relatively small wins - is the real key to selecting an EA.

Small consecutive wins add up to a big bank account. Forex trading is never about making a huge amount of money in a short time. It takes time for a Forex trading account to grow. Let me repeat, if you are after big wins in a short period of time then stick with gambling in the casinos and leave the Forex market alone. The Forex trader's biggest enemy is greed. Don't try to go over the top. Trade a good system. Place small trades and be patient. If you have selected your EA well then it will pay off. I promise.

To your success,