Actually, it is not so hard to find the right answers to all the questions. But it depends on you and your will to put in the time, money and effort it takes to become a successful trader.

Was the last improvement you made really an improvement, or does it just look better? How do you know?

At some point in time things don’t go very well and that is when you probably start to lose sleep.

Did you notice that common sense does not help in trading? Things that should work simply don’t work.

There is a kind of thinking that is very human and it is called Heuristics. Heuristics are an abbreviation in thinking to save brain calories.

One thing to consider is the spread. It can be very expensive, especially for exotic currency pairs. And last but not least, you need to choose those currency pairs where you can expect good results.

With automated trading, it is possible to do thousands of automated trades on a single rainy Sunday afternoon. Some of my systems run with more than 20 currency pairs at the same time. Today, my computer does everything for me and I rarely look at charts anymore. That is why I think it is the better trader. There are some things that go wrong on a consistent basis.

For example, my network provider will cut the DSL connection once a day.

You need to sleep, you need to work, and you want to spend some time with family and friends. An algorithmic trading system is able to follow your rules and trade day and night without ever getting tired or bored. The account size often is too big for rookie traders. They trade for excitement and entertainment, and that might work for some time. It is no problem to watch a drawdown in a back test, but you see that the equity line is sometimes far away from the balance line and that is when it starts to hurt.

A chess computer for $10 is easily able to beat an average chess player because the computer can determine all possible combinations for the next moves in a fraction of a second and calculate a probability.

Mistakes are unavoidable. From time to time something goes wrong! As a consequence of unpleasant feelings, most people close their trading systems at exactly the worst possible time. As you are not going to sit in front of your screen to trade an automated system, it is necessary to make rules for all the system parts. Backtesting is a way to trade the past to learn for the future.

We have historical data for years and years in the past and you can set up an automated trading system to trade with that data.

With an algorithmic trading system, trading works differently. There are no optical signals that need to be processed, but concrete numbers.

There are situations where everybody is trying to find out what to do next. Is it better to get out and close all positions?

I don’t know about any entry signal that would never produce false signals.