Hello Andrey. Could you, please, tell as in details about your experiences on financial markets? Where did you start?
In 1992, I entered Faculty of Economics of Kazan State University. In1994, friends of my uncle founded an investment company, Center of Modern Financial Technologies. On the recommendation of my uncle, I was employed as a ‘hopeful newcomer’. The company provided brokerage services on the market of republican treasury bills (regional analog of state treasury bills). At the first stage, just a few people worked in the company, so I had to act as both trader (I visited the local currency exchange and executed our customers’ orders) and back office, and adviser. Gradually, due to directors’ wise decisions and employees’ enthusiasm and commitment, the company rose to the leadership in that segment of financial services. I became the head of a department with several persons subordinated to me. Along with my primary activities, I used my personal finances to acquire shares of the “Orgsintez” (Organic Synthesis) plant and other industrials of the Republic of Tatarstan. I then resold the industrials to Moscow investment companies. The time of easy cash passed gradually, and I realized that I would learn very much to become a real trader.

In such a way, in 1997, the first book on technical analysis appeared on my table-top – Technical Analysis on the Futures Markets by John J. Murphy. I tried the knowledge I had got on the Russian share markets and on Forex. The first year passed with varied success. However, my trading had started to bring stable profits by 1998, and I set up myself to think of founding my own company that would provide services of online trading in stock markets and on Forex.

On the 24th of December 1998, the new business was launched: Dealing Center of Alpari was ready to open an account for its first real customer. The first years after the Alpari had been founded I continued trading, but, unfortunately, the current administration of dozens of companies now included in Alpari Ltd. occupies all my time, so I had to stop trading some time ago. At present, I write articles on my blog (www.vedikhin.ru) at times. I prefer to discuss automated trading, namely Expert Advisors for MetaTrader 4, in my articles. My interest in writing Expert Advisors is quite obvious in my circumstances: If I manage to create an EA implying my trading tactics, I’ll be able to return to trading without prejudice to my basic activities.

15 years on markets… This is impressive, Andrey. When did you become interested in automated trading?
As luck would have it, I have been on a first-name basis with computers since I was 12. It was the time when my mother made her most profitable investment in her son – she bought a PC for me. I just played games the first year, but then I started to learn programming languages. The first programming language I learned was Delphi. As a result, now, 19 years later, I dare to say that I can professionally use C++ and Delphi. This experience makes learning MQL4 a trivial task.

The lack of time and a great wish to continue trading activities helped me to find a correct solution for this dilemma: I will write my EA implying my trading strategy and allow it to make all trading decisions. The advantages of automated trading are obvious: You spend your time only on creation and testing of your Expert Advisor, and then your automated trading system will trade for you 24/5 without your intervention. No signal will be omitted, no emotional decision will be made.

Traders have already known your first book, Forex from the First Person. How are things going with the second book? What is it on?
The second book will be completely devoted to automated trading. In it, I will tell my readers about how to program in MQL4, how to create custom EAs and indicators. The book must be helpful for both the new and experienced Expert Advisors’ writers. In my new book, I will discuss typical problems the Expert Advisors’ writers may face. I will also give some source codes that would help to solve these problems.

The second part of the book will be devoted to proper testing of EAs on historical data. The matter is that this stage of EA writing is very important and incorrect testing may whittle away all efforts and result in losses on a real account. The book will be based on materials collected on my blog. I hope to have published the book by the beginning of year 2008.

You know automated trading firsthand. Do you think it may fully replace manual trading in future?
My answer is – yes. Moreover, now practically all funds use automated trading systems. The “manual trading/automated trading” relationship changes drastically to the disfavor of the former one. My continuous communications with representatives of the world’s leading banks and ECN just confirm this statistics. More and more institutional clients give preference to automated trading. Since the release of online trading platform MetaTrader, automated trading became available in a simple and easy-to-learn form for retailers, too. There is a huge amount of various resources on MQL4 in internet. The features and functions of the language itself develop by leaps and bounds. One of my favorite websites on this topic is www.mql4.com.

Andrey Moraru, in his recent interview, said that traders submit risky Expert Advisors for the Championship in the hope of luck. He thinks such Expert Advisors would be a suicide in real trading. Do you agree with him?
In trading, you cannot be successful if you don’t diversify your risks. I know many institutional clients that open several accounts with us and use different trading strategies on different accounts. They trade aggressively and with high risk factor on specific accounts, but they perform some more stable and conservative trading on other accounts. As a result, the total effect on all accounts is much better than it could be if they used only one trading strategy.

Market is very changeable: Sometimes one tactic gives better results, sometimes another one. This is why I have to disagree with Andrey Moraru and still note that the use of risky Experts is not a suicide if you don’t use only this kind of EAs. One should utilize very different trading strategies simultaneously: from conservative to the most risky ones. Diversification of trading tactics allows us to decrease risks considerably and to provide a more stable income independent on the current market state.

Ahmed Soliman, a Participant of the Automated Trading Championship 2006, considers technical analysis to be too complicated for automation. He decided to use an Expert Advisor based on news. Do you think this Expert Advisor to be profitable?
I’m afraid I will take a jaundiced view to this matter. In spite of the fact that I’m a Candidate of Sciences in Macroeconomics, I never use fundamental analysis in my trading. Due to this, I was and will always be a vocal advocate of technical analysis to be used in trading strategies. Going back to your question: Unfortunately, it is difficult for me to judge about the profitability of Ahmed Soliman’s Expert Advisor without seeing its source code. However, time will put everything into perspective. Anyway, I’d like to wish Ahmed to be successful and win.

What is your opinion about scalpers, Andrey? Do they have any chances to win in the Championship and to benefit in real trading?
Answering this question mainly depends on what the market is at the specific moment. Scalping won’t be effective on a trend market, whereas, if the market trades in a range, such Expert Advisors might try to go for the prize.

Generally speaking, Andrey, how long can an Expert Advisor work without human intervention?
I think we can distinguish several states of the market (flat, trend, etc.). If you write a specific EA for each market state and launch these different Expert Advisors on several accounts, it will be possible not to intervene into trading for a rather long time. The most common error of traders is that they try to write a universal Expert Advisor, which would remain profitable regardless of the current market state. This is why such traders have to re-write their EAs every several months. In my opinion, the simplest and most effective solution would be to diversify trading tactics. I mean you should create several Expert Advisors for all of life’s emergencies and launch them simultaneously on several accounts. As a result, some accounts will be profitable at certain moments whereas others will be less profitable, even losing. However, there are grounds for hope that the total results will be good and stable.

Resuming all above, Andrey, could you describe a perfect Expert Advisor. How do you see it?
When creating a trading tactic (this means when creating an EA), the most important thing is for trader to understand the market philosophy. I will give you an example from my trading past. This example may become useful in creation a trend Expert Advisor.

Well... In the earliest days of my trading life, I decided to analyze the market. Technical indicators on weekly, daily, 4-hour, and 1-hour charts for Japanese Yen showed clear signals to sell. Such an “exoteric” situation cannot even be described in books, so I decided to perform my first trade on the real account and… A loss! I despaired of technical analysis immediately. Any wish to trade on Forex disappeared. It was replaced by fear. Fortunately, my wish to think did not disappear, so I came rather quickly to a conclusion that it had been a mistake to put the book on technical analysis into a distant drawer. The events were developing absolutely logically. Weekly and daily charts spoke for a global downtrend, whereas 4-hour and 1-hour charts did for that the trend was going on and even seemed to have already reached its bottom. An ideal moment to sell would be a situation when large timeframes were signaling about a global bearish trend, whereas the 4-hour chart would point at bullish trend and the 1-hour chart would have already shown some signals of the uptrend turn (for example, bull divergence).

Thus, don’t be hasty in disappointing in automated trading and blame for your unlucky trades the authors given recommendations on analyzing methods. Try to feel and understand the analyzing philosophy first. This will help you to find the cause of your errors in trading and avoid them in future, when you will write a really good Expert Advisor.

Thank you, Andrey, for sharing your ideas with us.