rtmark

Using Expert Advisors in Forex Trading

Alan Draper Lewis

Author: Alan Draper Lewis

Forex trading is a thrilling way to earn money, but it is not for the faint-hearted. The perpetual fluctuation of rates defines profit or loss for market participants. To make the right decisions, traders need a thorough analysis. Forex terminals provide the necessary data, but success comes with experience. These platforms are also equipped with automated tools that can do the calculations for you.

Expert Advisors are special pieces of software. Their purpose is to facilitate trading and manage positions for you. EAs are guided by preprogrammed instructions. In essence, they are your automated trading assistants. But does it mean you can delegate the job and watch profits soar?

Advantages of Expert Advisors

It is physically impossible to monitor the market 24/7. Automated systems can do this job for you. They will analyse trading signals and make decisions while you are away from your device. Popular EAs for a live trading account generate passive returns for their owner.

Secondly, technology does not have emotions. These are common causes of failed trades. People start opening positions when they really shouldn’t. Strong feelings make them chase losses, or take on too much risk.

Of course, it is not an excuse for ignorance. Technology is not infallible. Traders should be able to make their own decisions. Knowledge of FX Forex is indispensable, and genuine effort pays off.

For EA, the only thing that matters is their instructions. They cannot experience feelings, even when the market is in panic. For you, delegating the job reduces stress and possible mental exhaustion. This is particularly relevant for day traders, as they need to spend hours buying and selling daily.

Finally, a robotic assistant is capable of considering a wide range of variables at once. It can also analyse those variables for several instruments simultaneously. Its analytic capacities are superior to any trader’s brain.

Disadvantages of Expert Advisors

Despite their impressive functionality, EAs are not perfect. The biggest flaw is the absence of flexibility. They act according to preprogrammed instructions. Humans can think outside the box and find unorthodox solutions. An EA won’t do it. Sometimes, their rigid behaviour leads to trading mistakes and missed opportunities.

Besides, some robots fail to react to the news in time. This means they ignore fundamental reasons for lucrative trades. A human sitting at a laptop can take advantage of news updates immediately.

Where Can I Find EAs?

In Vietnam, Forex brokerage is provided by local and international companies. Global brands like Forextime offer state-of-the-art software like MetaTrader 4 and MetaTrader 5. Both systems work on desktop and mobile devices, and they are compatible with EAs. Their powerful web-based versions are used without installation.

It is also possible to create your own robotic assistant. All EAs for MetaTrader are built based on MQL, the system’s programming language.

Choosing the Best EA

Before trusting an EA with your funds, test the system extensively. For example, some systems may show different results with different currency pairs. It does not matter whether you buy an assistant or create your own. All trials must be done in the demo mode. If you don’t have a demo account yet, set it up — the process takes seconds.

If you want to use your own creation, be prepared to tinker with variables. The market is always in flux, and your EA will need to adapt. If you intend to buy an EA from a company or another trader, be very careful when choosing it. The currency exchange lacks regulation, which is why it is attractive for scammers.

Signs of EA Scams

Steer clear of EAs that are advertised as get-rich-quick schemes. All too often, sites selling robots pop up and disappear just as quickly. Promises of spectacular returns are a bad sign. This does not mean all scammers look the same. Experienced criminals know that overpromising can backfire. Research the company’s background before completing the purchase.

Realistic Expectations

Do not expect an EA to earn you a fortune. Reliable trading robots are not fiction, but they usually deliver modest results. Some traders achieve a double-digit annual return. For some, it never leaves the single-digit zone.

Pros & Cons of Technology

An automated trading assistant sounds like a dream. Modern EAs can be programmed based on certain parameters. They will stay the course when humans panic. However, this software has its own flaws, and these must be taken into consideration.

Don’t expect the robot to make you rich. Even the most elaborate EAs from reputable providers achieve fairly impressive results. Traders should use them as an aid, not as their sole method of money-making.

 

All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Alan Draper Lewis

Alan is a content writer and editor who has experience covering a wide range of topics, from finance to gambling.