Turning your e-mini trading into a nifty money making machine through automation would seem to be every e-mini trader’s dream come true. We would all love to sit back and enjoy the computer making one successful trade after another and watching the money accumulate in our futures trading accounts. If you read some of the fantastic performance numbers that are being published by automated trading system providers, we should all stop trying to rock the market with our system of manually entering orders, setting stops, and worrying about things like support and resistance.
Trading robots are nothing new in the futures market. Well over 60% of the contracts traded in the ES contract are computer initiated. Clearly the big investment banks are sold on the idea of computer based trading, so why shouldn’t we as e-mini retail traders get in on the action?
It’s a pretty easy question to answer; investment banks employ their bots to engage in high frequency trading (HFT). If you can muster the massive amount of cash required to overwhelm the market for about 22 seconds, as is the case with HFT, you are almost guaranteed to win. HFT requires a lot of money to trade and unless you fall into that category you will have to turn to some of the commercially available trading bots to be successful, and that is a tall order with the selection of bots that are available to the retail trader. I’ve spent some time looking at some of the selections and can tell that the bots have a rather dubious record of achievement. In short, you’re unlikely to make a million dollars this year if you buy one of these clunky programs.
You can buy trading bots that range in prices from $249 all the way up to six figures. Obviously, I didn’t get to test the six figure machines, but I did get a chance to try some of the lower priced models and ran them on a demo account for a period of time and the results were less than spectacular. I really wasn’t expecting much and was not disappointed. Common sense alone should tell you that an item that costs $500-$1000 is unlikely to make millions. If they could automate e-mini trading they would certainly be worth quite a bit of money and a price tag of $500 just doesn’t make sense to even the most gullible trader.
Where does that leave you? In my opinion, bots are a waste of time and none of the models I tried came close to making a profit. Damn, I had such hopes that I would be able to sit on the beach while my e-mini trading robot racked up unprecedented amounts of cash.
