What do you think of Autochartist and how it identifies real time, profitable trading opportunities in the Forex and stock markets?
How dependable is it?
Without going into the accuracy of the software, this kind of tool is incredibly harmful for your trading. People will say “it’s just one more tool in the toolbox”, but that tool will give you the illusion of dependability without the reality.
For example, supposing you are very bullish on GBPUSD. You check autochartist, and it tells you that it is also bullish on GBPUSD. You take the trade. You check autochartist and it tells you it is bearish on GBPUSD, you will somehow magically fail to notice this. It’s called confirmation bias, and it happens to even the best traders.
Let’s say that you hypothetically went into drawdown, and decided you needed to “trade your way back to breakeven”, you start frantically searching autotrader for opportunities. Autotrader gives you 4 trades with a 65% probability of success. You take them all, failing to notice that any trade entered around the same time is inherently correlated. You think you have a 1.5% chance of losing all 4 trades, but it is really around 35%.
These sorts of “another tool in my toolbox” things provide endless rationalisation fodder for flawed thinking and flawed trading strategies. You have no way of knowing how accurate the data it is based on is. A far better strategy is to pick ONE setup or pattern and test yourself how often it works and how often it does not. Also, far more important than the entry pattern, is how you manage your trade. How soon do you go to breakeven? Where do you place a stop loss? Do you use targets or trail a stop? When and why would you tighten your stop in a winning trade. All these things have a greater influence on profitability than the original entry.
I know of no professionals who would entertain using rubbish like this 🙂