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If you want to improve your results and avoid to make emotional decisions, an algorithmic trading system can be a good solution.
Trading different financial instruments can save you from disaster. Even if one currency pair is going crazy, other currency pairs might save your account.
A forex earthquake happens maybe once or twice a year, but it is always unexpected and dangerous.
We need to decide what to trade and what not to trade. It is not hard to understand it and it is not hard to do it. Invest some time and find out how to get rid of the disadvantages of being a hope trader. I need to admit that I always thought that I trust my systems. But in a crisis situation, that fear still creeps in.
I have variable spreads on my real account and the strategy tester might have used fixed spreads. And there are costs that you might not even consider.
We don’t like insecurity and discomfort, so we do everything to end it, even if it is wrong to do this on top of other problems. Humans act differently when it comes to real money. That is why I consider computers to be the better traders.
Do you think a cent account is helpful to improve your results? Yes. That will make it easy to avoid manipulations, because now you are not a victim of your own fear.
Depending on the account settings, you could have better conditions and that would be good. But you also can have less good conditions. For example, a higher spread.
I always encourage my course members to start with a demo account and trade that for at least three months afterwards. The next best thing would be to use a so called cent account.
A lot of people can’t do proper trading and they all will be able to come up with a dozen excuses. A socalled tick is a price change and you need to decide what you want to do when the price changes and define what the automated system should do. If you increase your risk, maybe the drawdown will be doubled. But that doesn’t mean that you also can expect 200% profit.
Often the question is asked why algorithmic trading works better or worse. The main problem with it is that we humans are often used to making our decisions by using so called heuristics. The possible risk setting for a single year is sometimes high and it is possible to make a good profit. But when you try to use the same high risk setting to trade eight years in a row, you will have a very high probability for a total loss. Moods are human, but I think moods are a big problem when it comes to trading.
The only reason that I don’t manipulate my system is that I have trained how to not follow my basic instincts, because I have trained that on a consistent basis.
Most traders started with something that worked for some time and suddenly totally unexpected. Everything started to go wrong. Most of them lost their first account within the first six months.
Something that can’t be avoided is that you sometimes don’t make any profits, but losses for a period of time.
The desire for entertainment, immediate gratitude and rewards is always present.