My experiences with Automated Trading Systems

The power of being able to have your computer make money for you 24/7 without human intervention is like the holy grail of the trading world, computers never get tired nor do they miss any opportunity in the markets. Indeed the past few years have seen huge increases in the amount of 'quants' or 'trading robots' used by big institutional players. Likewise smaller traders are becoming more interested by software such as MetaTrader which permit auto-execution of trading strategies.

My experience
I have used the MetaTrader Forex platform for many years now, and even coded my own automated systems. From the testing of hundreds, probably thousands of Expert Advisors (EA's) I have done very few survive the long term. This is because often they are 'curve-fitted' to suit current market conditions, eg: they may work well in a trending market but if it starts to move to a sideways movement will rapidly encounter losses. Anoher trend recently has been scalping EA's in the Asian market (quiter and less volatile period) which trade quickly for a few pips, however often the risk to reward ratio of these EA's is terrible, eg: they may risk 100 pips to make only 5 to 10 pips, over the long term it is very unlikely such a system will survive.

Conclusion
Please think twice before spending money on automated systems, especially metatrader EA's. There are some good ones out there but 95% just won't stand up over the long term. The real challenge is for the EA or robot to be able to adapt to the current market conditions. I am coding some systems which aim to go some way to doing this and hope to post some results on here soon.
The larger instiutions often use quant methods such as very small price indescripencies that would be very difficult to take advantage of as a smaller retail trader.