About paid EAs and signal services

December 31, 2009
By Bogdan Baltatu, MQLmagazine editor

[Versiunea romaneasca] [MQLmagazine.com in romana] [English edition]

Commercial experts

Many traders think about the issue in a fair way : “If these are so profitable why are still for sale?”

Before all we should say that not all experts that are for sale are profitable but surely there are a few that are profitable and deserve the cash. Saying all of these we still didn’t answer the question.

Let’s make a simple math calculus. I checked the Internet and I saw the experts sell at least $200. There are also at $1000 , others $200 a month, each seller makes his own price. The expert is a software and is sold as so. Because an expert needs permanent upgrading/adaptation to the market requirements say you ask a price of $250 and take also $200 “maintenance fee”.

In the first year you sell 1000 copies of the expert. That means $250 x 1000 = $250.000… a nice amount of cash. There is no point in me telling you how many will be actually content with it in order to pay the maintenance fee and how many will buy the system in the following years because I don’t know and I don’t want to suggest that good cash can be won by selling experts.

If the seller would have opened a $10.000 account and the expert had a yield of 7% monthly after a year would have had in his account about $32.500. If he would have kept it for himself would have been poorer by tens of thousands of dollars. So selling the expert doesn’t make but getting a lot of excess income over the gains that our programmer trader could have got from simply using the expert.

A buyer starting with a $10.000 account buying the expert will make enough cash to pay the costs (the expert plus eventually a VPS hosting service) and will be content.

Finding this reasoning pretty relevant you shouldn’t believe that everything flying is to be eaten. I personally don’t know any profitable expert, but I didn’t have too much interest in this because for me matters to know the system that’s “playing” with my money.

Signal services

These services consist in offering trade signals like “buy now EURUSD with Stop Loss @ x and Take Profit @ y”.

We are starting from the supposing that the provider is a quality one, so I’ll start to sketch some of the pros and cons of using a signal provider.

Pros

-It saves you from a lot of unslept nights and hours spent in the front of the computer.

-Generates profit with a minimum effort

-Minimizes the losses (especially useful if you’re a beginner)

Cons.

-If you don’t apply a rigurous Daca nu aplici un money management rigorous and correct you risk losing all the money in the account.

-If you’re not there at the moment of the signal and you open the trade later or you don’t open at all you lose from the profit , maybe even go into loss;

-If you’re not at the moment to close, when the provider tells “close now”, you risk having the profit smaller or to close in loss;

Conclusion

Personally I don’t recomend neither payed eas nor signal services , because I believe it’s better to lose and learn from your own mistakes instead of losing on other’s hand.