Should You Automate Your E-Mini Trading With a Robot?

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Turning your e-mini trading into a slick 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 successful trade after trade and watch the money pile up in our futures trading accounts. If you read some of the fantastic return figures that are posted on purveyors of automated trading systems we should all stop trying to flail away at the market with our system of manually entering orders, setting stops, and worrying about things like support and resistance.

Trading robots are nothing new to the futures market. Well over 60% of the contracts traded on 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 retail e-mini traders, get in on the action?

It is a pretty easy question to answer; the Investment Banks employ their bots to engage in High Frequency Trading (HFT). If you can muster the tremendous amount of cash necessary to overwhelm the market for about 22 seconds, as is the case with HFT, you are just about guaranteed to win. HFT takes megabucks to operate and unless you fall into that category you will have to fall back on some of the commercially available trading robots to succeed, and that is a tall order with the selection of bots that are available to the retail trader. I have spent some time looking at some of the selections and can say that bots have a pretty dodgy record of achievement. In short, it is unlikely that you are going to make a million bucks this year if you purchase one of these clunky programs.

You can purchase commercial bots that range in prices from $249 to well into six figures. Obviously, I was not able to demo the six figure machines but I got a chance to try a few of the lesser 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 a whole lot and I wasn’t disappointed. Common sense alone should tell you that an item that costs $500-$1000 is unlikely to generate millions. If they could automate e-mini trading they would undoubtedly be worth quite a bit of money and a $500 price point just doesn’t make sense even to 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 anywhere close to making a profit. Darn it, I was so hoping that I could sit on the beach while my e-mini trading robot raked in unheard of amounts of cash.

David S. Adams