What can go wrong when software trades for you.
Automation removes hesitation, which is not the same as removing risk. You can lose all the money in your account, and you can lose it faster than you could by hand.
Ten ways an EA can lose more than you planned
R-01It trades without asking you
An EA opens and closes positions on your account by itself. A mistake in its settings, or in our code, is acted on immediately and repeatedly.
R-02Software has bugs
Ours included. The changelog lists the ones we have found. Some will only show up in conditions no test reproduced.
R-03The terminal must stay connected
If the terminal, the computer or the connection stops, the EA stops managing open trades. Stops already sent stay at the broker; trailing and timed exits do not happen.
R-04Your broker's execution differs from ours
Spreads, fills, stop levels, symbol names and swap rates vary between brokers and between account types at one broker.
R-05Gaps and fast markets
Over weekends and around releases, price can jump past a stop. The loss can be larger than RiskPerTrade suggests.
R-06Several EAs add up
Risk settings are per EA. Three EAs on one account, or one EA on correlated pairs, can lose together on the same day.
R-07Changing settings changes the system
Settings other than the defaults have no forward-test record. Raising risk or caps to make an EA trade more is the most common way users lose more than they expected.
R-08Two terminals, one account
A terminal on your computer and another on a VPS, both running the EA on one account, will both trade. Positions double without warning.
R-09Platform and broker changes
A terminal update, a new symbol specification or a server move can change how an EA behaves until a fix is released.
R-10Markets change
Each EA trades one idea. When markets stop behaving in the way that idea needs, the EA can lose for long periods. Its stand-down rules reduce that; they do not prevent it.
Hypothetical and past performance
Every result on this site is either hypothetical (a backtest) or past (a forward test on one account). Neither tells you what will happen on your account.
How the results were producedBacktest results are hypothetical. They come from running the EA on historical prices, with costs modelled rather than paid, and with the benefit of hindsight in how the rules were chosen. No backtest accounts for every effect of real trading, such as liquidity at the moment of an order or a broker's execution on a given day.
Forward-test results are past performance on one live account at one broker. Your results will differ with your broker, account type, terminal, settings and start date. Past performance is not a reliable indicator of future results.
All figures on this showcase are shown as x.
Hypothetical results have inherent limits. Unlike a live record, they do not represent actual trading, and they may under- or over-state the effect of factors such as lack of liquidity. They are designed with the benefit of hindsight. No representation is made that any account will or is likely to achieve results similar to those shown.
When to switch an EA off
Decide these before you start, and write them down. It is much harder to decide in the middle of a drawdown.
- The account is down more than the amount you decided you could lose.
- Drawdown is deeper than anything in the forward test.
- The journal shows errors or behaviour the docs do not describe.
- You have changed broker, account type or terminal and not yet tested on demo.
- A major event is coming and you would not want any open position through it.
- You no longer understand why it is doing what it does.
How we are paid
Quietbar Systems is an introducing broker for Ferncastle Markets (fictional broker) and receives a commission based on the volume traded on accounts opened through its links, including volume traded by our EAs. More trading costs you more and pays us more. Nothing on this site is investment advice, a recommendation to trade, or a promise of any result. Read the full conflict statement