In the fast-paced world of trading, where success depends on quick decisions and accurate forecasts, a Expert Advisor can become your secret weapon. But how do you know whether you should buy a trading advisor right away or rent it for a short period of time?
In this blog we will look at the pros and cons of renting a trading advisor for a short period of time and perhaps this will help you make an informed decision.
Tip – if your lease is expiring and the EA has open positions, it is better to extend the lease in advance. Transactions that have a minus indicator in one month may eventually close with a profit in the next month or later.
Pros of short term rentals:
- Сost savings: Renting an EA often requires a smaller financial investment than buying one on a permanent basis. This can be especially useful for beginning traders or those who want to try out a new EA without spending a lot of money.
- Test opportunity: Short-term leasing allows traders to test the Expert Advisor in real market conditions before deciding to buy it.
- Updates and Support: Many EA developers provide updates and support for leased versions only. This means that you will receive the latest updates and technical support on an ongoing basis without having to buy the EA.
- Comparability: Renting several advisors for a short period of time allows you to compare their performance and choose the best one for your needs.
- Earning Opportunity: Renting an EA for a short period of time may cost much less than the EA can earn during that rental period and thus the difference between rent and profit stays with you.
Let’s take the Workhorse mt5 Expert Advisor as an example. Workhorse mt5
As you can see the tests over the last couple of months show a pretty good result. GBPUSD
Of course, it would be great to always get such results. However, we should not forget that there are negative periods in trading. Naturally, a good Expert Advisor differs in that its positive periods over a longer period of time outweigh the negative ones.
Workhorse mt5 advisor test from the beginning of 2024 GBPUSD
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Here’s the EA Workhorse mt5 itself in the marketplace Workhorse mt5
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Tip – keep in mind that at the end of the test, the strategy tester forcibly closes all trades opened by the Expert Advisor in the state in which they will be at the end of the tester (with profit or loss). That is, the trades that the Expert Advisor could close in the next period with a certain result are closed by the tester forcibly. Take this into account to analyse and evaluate all the tests correctly.
Minuses of short term rentals:
- High rental costs: Renting a trading advisor can be expensive. And in the long run, buying an EA can be more profitable than renting one.
- Wrong conclusions: If you rent a trading robot for a short period of time, such as a month or two, it may be incorrect to draw conclusions about its trading based on that period.
Here are a few reasons why:
- Insufficient time period: One to two months may not be a long enough period to evaluate the true performance of a trading robot. Market conditions and situation may change and the robot may behave differently in different market conditions. Therefore, such a short period may not give a complete picture of its performance in the long term.
- Insufficient data: One month of trading may not provide enough data for statistically significant conclusions. For example, if a robot has made only a few trades in a month, it is difficult to judge its performance based on such limited data. More data is needed to determine whether the EA’s performance is consistent or simply the result of chance.
- Unable to evaluate a strategy: One month may not be enough time to evaluate a trading robot’s strategy. The trading robot may be using a complex strategy that requires a longer period of time to evaluate.
- Market volatility: Markets can be very volatile. Trading results can vary greatly depending on market conditions, and a trading robot can be more or less effective depending on these conditions. For example, if the market has been very volatile for a month, a trading robot may perform well, but it may just be a lucky coincidence.
- Unpredictable events: Markets can be subject to unpredictable events such as economic news or geopolitical events. As well as events that occur every few years. These events can significantly affect trading results and distort the evaluation of the EA’s performance during their occurrence.
Conclusion:
Although renting a trading robot for a short period of time can give you some insight into its performance, it may not be correct to draw definitive conclusions.
To draw valid conclusions about a trading advisor, it is recommended that you rent it for a longer period of time, such as a quarter or a year. This will allow you to evaluate its results over a longer period of time and gain a better understanding of its performance and the risks associated with its use.
An example of one of the Workhorse mt5 Expert Advisor tests from 2021 – 2024 GBPUSD
You have the opportunity to access a powerful tool. Workhorse mt5 Expert Advisor.
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Here’s the EA Workhorse mt5 itself in the marketplace Workhorse mt5
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