9 rules for success in working with "dangerous" advisors
Hello. Recently, there has been a noticeable renaissance of forex advisers on the martingale ("monkeys"), netters, averagers and other robots, which I personally would call dangerous. What is so dangerous about them? And is it possible to consistently make money on Forex with the help of such experts? Read on and I will reveal to you 9 top secrets work with monkeys and other similar advisers.
To begin with, what is the danger of martingale, grids of orders and other sojourners? All such robots are based on the idea that the price in most cases returns to certain average values. And, based on this idea, in the strategy of such advisers they add the opening of additional orders when a certain level of open loss is reached, the lot is increased when losing, the construction of pyramids from orders, etc. But the market does not always return to its previous prices, and trading with "casino" strategies can easily lose all or most of the deposit overnight.
But a big risk means a big profitability: monkeys, as a rule, earn many times more than other advisers. It’s like with MMM - until the pyramid bursts, it brings good profit. Nevertheless, it is possible and even quite stable to make money on dangerous advisers if you follow certain rules, which we will discuss below.
1. Trade only on cent accounts
The main mistake made by inexperienced traders is the use of a micro or classic account. Martingales, outingers, etc. you need to put only on a cent account, because in 99% of cases they require rather large amounts in the “account balance” column: many orders are opened, plus additional ones with an increased lot (depending on the particular robot).
For example, the same Forex Hacked for normal money management requires at least $ 10,000 if you want to trade it on a micro-account in Alpari. On centovik, when working with this adviser, you can do just a hundred dollars.
For more information on cent accounts, see Micro and Cent accounts
2. Use the maximum available leverage
Some fool blurted out somewhere that the higher the leverage, the greater the risk. And since then, some traders believe that with a minimum leverage they take less risk in the market. Complete nonsense. The risk depends on the size of the position and stop loss. To understand the principle of leverage, I advise you to read the article The whole truth about leverage.
So here. When trading monkeys, nets and other things, we need a big shoulder like air, the best option is 1: 500. What for? A large number of orders in the red, albeit not fixed, can lead to a margin call and a subsequent stop-out (for what it is, see the aforementioned article about leverage). Naturally, we are interested in delaying this moment as far as possible, giving orders a chance to go into profit, therefore without a big leverage we risk losing the pyramid of orders and, in addition, most of the depot.
3. Follow advisor recommendations
In most cases, complete with dubious advisers there are recommendations on the minimum deposit, lots, pairs, etc. But the bulk of them do not care: they stupidly leaf through the text to the "Download" button and close the page.
Do not be idiots !!! Recommendations are given as people already have experience with a particular bot, they have developed strategies for success, figured out which pairs are worth trading, which are not. Why do you need to repeat the mistakes of others?
If it is written that the adviser needs at least $ 300, then it makes no sense to hang him on a depot of $ 10. This happens all the time: either people are too lazy to read, or they consider themselves the most intelligent, it is not clear ... I repeat: don't be stupid, follow the recommendations.
4. Be sure to check everything in the strategy tester
Someone else's experience is certainly good, but you yourself also need to check everything and apply it to your specific case. Namely: before hanging the EA for real money, be sure to test it in the MT4 strategy tester. And set exactly the size of the deposit with which you are going to trade, and those settings with which you will work on a real account. You need to know what drawdown awaits you, whether the size of your depot is enough (maybe it should be increased), etc.
As a reference, you can watch the video How to test the EA
5. Constantly withdraw profit
No matter what super results you get in the tester, whatever “ingenious” settings you choose, sooner or later a dangerous adviser lose all or most of the money in the account. Believe me, this is bound to happen. Maybe tomorrow, maybe in a year. But it will happen. You don’t need to be afraid or hope that the drain will happen not now but “someday” - you need to take this factor into account and take into account that the “collapse of MMM” can happen any day.
Therefore, set for yourself some routine: once a month or once a week, and constantly withdraw what you have earned. Ideally, your goal is to withdraw the initial deposit and continue the game “casino money”.
6. Learn Advisor
Do not rush to put the robot for real money, forex will not run away from you. Be sure to study the expert with whom you are going to trade: how he opens up positions, how long he holds them, what are his weaknesses, what are his strengths. A simple run in the strategy tester is not enough: put the bot on a demo account and watch it for a month or two. This will help later save you a lot of money when trading on a real account.
7. Trade on Swap-Free Accounts
If, while studying the adviser (see point 6), you notice that it often holds positions for several days or even months (there are such bots), then you should choose a Swap-Free account. This will help to avoid additional loss in the form of swaps (commission for transferring a position to the next trading day).
8. Use VPS Server
Imagine that the adviser opened the pyramid of orders, and at that time all of the house suddenly lost electricity for a couple of hours, or your provider decided to carry out unscheduled repairs and turned off the Internet. Force Majeure? He is. Due to such an unfortunate accident, you can not only lose profit, but also lose your deposit, because without the Internet and / or electricity, the adviser simply will not close orders.
You can avoid such unpleasant situations using the VPS server for trading advisors.
9. Trade accounts with a floating spread
The smaller the spread, the better. Agree, if the order pyramid does not close just because the spread did not have 1 point to take profit, and then it goes into minus, it will be very, very disappointing. It is better to pay an additional commission for opening an order, but trade with lower spreads.
Of course, working with each specific adviser has its own nuances, but following the above rules will help you get a stable (as much as possible) profit by trading “dangerous” advisors and make them safer.