If you have developed, acquired or purchased a trading system that works well for you, at one point you will come to an idea to automate it. Wait, but why should I do that, since I have the system that works well for me? Is the change worthwhile, will the automated system also be profitable? What are the benefits of system automation?
Well, the automation will help you solve some problems that you are facing while you are trading. Manual trading requires patience and a high level of concentration. Sometimes it can be mind-numbing to constantly look at the charts and wait for an entry signal. This boring process will certainly reduce your concentration level over a longer period.
Manual trading requires lots of discipline and consistent trading system following. Even if your system has the win rate around 80%, you may have 2 or 3 losing trades in a row. After that, it is normal that you lose a little bit of confidence and start to doubt your system and skip the next potentially winning entry signal.
Trading using expert advisors will save you the time, you will be able to monitor more trading instruments at the same time and you will have more time to do other things. Also, you will be able to trade more trading accounts at the same time. A computer always more quickly responds to the entry signals then human so the speed of the execution is always better if you trade automatically. When you trade on smaller time-frames better speed can significantly improve the results.
Converting a trading system to a strategy is not always possible. Well, you will have to see how strictly you are following your trading strategy while you are trading. If you are entering the trade on every signal that you receive and exit just when the exit rules are met your strategy can be automated. However, many traders filter out the entry signals just because they have not “right feeling” about the trade. OK, if it is based on an upcoming news release or on candle pattern formation that you do not like the system can still be automated but the automation will be more complicated because you will have to introduce additional rules. It may also happen that you did not take the entry because the trade direction does not match your fundamental analysis. Remember, an automated trading system will strictly follow all the rules. If this is not the case the automation is not possible.
Creating an expert advisor out of the trading system will make the testing process faster and more precise since you will be able to back-test using strategy tester. Even if you do not intend to use it for trading I strongly advise you to create the expert out of your trading system. It will allow you to test different trading instruments over a longer period and you will see how the use of different trade management approaches will affect your trading performance. Certainly, it will help you to familiarize yourself more with your system. Knowing the exact winning rate can boost your confidence and finding optimal trade management set up can improve your performance.
In case you are not able to automate your trading system completely, I highly recommend you to use some aspects of the automation ( or to trade semi-automatically) and to create utility tools that every manual trader should have. Alerter is an expert advisor or custom indicator that is generating alerts when your entry signal appears. In that manner, you will be able to monitor more instruments at the same time. You will not miss the signal due to a lack of concentration.
The trading platform can send alerts to your email or your mobile phone. For managing already open trades you should have your custom trail stop or scale-out EA. These utility robots will be a great help and will improve your trading.
So, converting a trading system into an expert advisor is not always possible. It depends on how strict you follow your rules. Trading with an expert advisor will minimize your emotions, maintain the same concentration level, keep consistency, allow you to the test system in a better way. It will also help you to trade multiple accounts and to monitor more trading instruments at the same time.
