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You'll often hear it said that profitable Forex expert advisors cannot possibly exist, because if they did then the big banks and hedge funds would just sack their trading teams and replace them with Forex EAs. This is a blatant lie that is told by people who don't have the slightest understanding of how fund trading works. Profitable Forex expert advisors do exist, and there are very good reasons why banks and funds don't use them to trade. By the end of this article, you'll know why you have the opportunity with Forex EAs that the banks don't want.
The Myth That Profitable Forex Expert Advisors Don't Exist
Believe me, if the banks and hedge funds could replace their traders with software, they would in a heartbeat. The problem is, even the best Forex EAs cannot match the returns that professional Forex fund traders make. You might be thinking: "Hang on a minute, the banks and funds only make a 10-20% return per annum, while profitable Forex Expert Advisors can bring in 100% and upwards returns in a year." Yes, but the key difference is that banks and funds have hundreds of millions of dollars to trade, while typically an individual Forex trader would have a few thousand dollars.
So what difference does it make? While the Forex markets may have the highest trading liquidity in the world, meaning that the market can absorb a few hundred contracts without a price shift, there's still a limit to how many trades you can put on at any given time. That means that as an individual Forex trader, we can buy or sell a few contracts with no problems, but when the banks want to move thousands and even tens of thousands of contracts, then it takes a lot of skill and maneuvering on their part to get that done without getting a very bad price.
Conclusion
That's why they don't use Forex Expert Advisors, because there's no way that they can get in and out of the trades like an individual Forex trader with small capital can. Once you hit a million dollars in trading capital, you'll experience the same issue with Forex EAs, but until then, there's a very real edge that you have over the banks. So forget about learning how to trade Forex from scratch on your own, because with a profitable Forex Expert Advisor, you have the potential to outperform the banks without doing any of the hard work on your own.
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