What is an Expert Advisor?
An Expert Advisor or EA is a computer program used to monitor and trade the financial markets, including forex, using algorithms, run on MetaTrader 4 (MT4). From the parameters you’ve set, the EAs will find opportunities to notify the user or open a position automatically. Once your position is open, the EA can decide when to stop and include stop methods like trailing stops and limits to avoid substantial losses.
The EA will help to monitor multiple markets for you depending on what you choose and know when to alert and update you on an opportunity to make a return. You also have the option to give the EA control of the markets entirely, allowing it to open more than one position every day without your input.
Forex trading and more
EA trading is primarily for forex traders as it runs on the MT4 platform, which is predominantly for forex users. You do have the option to trade them on any market available, however. The MT4 platform does give its users other market choices like cryptocurrencies, commodities and indices if you want to.
The forex market is open worldwide 24/7 to accommodate different time zones. When using an automated EA, you have the option to carry out trades when you’re away to look for opportunities at hours that you might not be able to react if you’re asleep, working, or other things occupy your time. This is through the technology of a forex robot or a trading bot. Designed through an artificial intelligence (AI) platform, these bots essentially do a lot of the time-consuming work for you. An EA trading bot can compare a considerable amount of more variables than humans can at a fraction of the time.
EA trading – how does it work?
EA trading works by allowing the user to set parameters to find opportunities to open and close positions that result in profit. The EA uses a set of yes or no rules to activate the trading decisions. For example, if you’ve set a maximum and minimum price range to scan through, the EA will look for opportunities within that. The EAs are made by combining a lot of yes and no rules into a complex algorithmic model, allowing more sophisticated trading strategies and techniques to be executed almost instantly.
You can build EAs if you have solid mathematical knowledge and understand MQL4 (MetaQuotes Language 4), an integrated programme for developing automated trading strategies. Or, you can import it from somewhere else. They work well in the MT4 platform for beginner traders who need a helping hand and advanced traders who can make the most from the detailed parameters set to enhance the potential of generating returns in the market.
Using a reliable source
If you’re considering forex ea trading, it’s good to check out which online broker can support the trading style and demands you require. You may also find that many brokers and companies offer EAs at competitive rates, but this can seem too good to be true. It is essential to carry out your own research before importing an EA because you might not get what you’re promised.
Monitoring the markets
EAs are great for monitoring the markets, whether they are simple EAs or more advanced, depending on how you set them and your skill level. A simple EA could monitor one market for you, like the forex market, and notify you of any potential executions to be made when the parameter conditions have been met. For example, it could spot any mean reversions on GBP/USD when using the 20-day simple moving average indicator (SMA). You could set the EA to monitor the GBP/USD continuously for the 20-day SMA, or you could allow the EA access to open and closing positions when they predict the time is right.
Automated trading is one of the most valuable features on the MT4 platform. The platform allows users to develop and test EA trading and technical indicators into their daily trading activity. MT4 is available on many online brokers, including those that ensure the online security of funds and personal information like FXGrowth. Automated trading eliminates the obstacles of analytical and technical analysis for users and promotes a more efficient way to trade.
Advantages of using EA trading bot
Using an EA trading method has several advantages, so we included a few key ones below in this TradersBest.com review.
MetaTrader EA trading allows the user to scan through several markets at one time. It includes taking in ample amounts of information like the price movements for your chosen market, technical indicators, economic announcements and monitoring the number of funds you have available in your account. This information is taken in at a faster speed than if a human was to do it, so that gives you more freedom to focus on other aspects of trading. EAs can be highly sophisticated, depending on their algorithms, which makes them powerful and reliable trading tools.
As mentioned earlier in this review, automated EA trading does most of the work for you, ultimately saving you more time. A successfully programmed EA will monitor multiple markets simultaneously, meaning you don’t have to watch the price movements 24/7 to find opportunities. The EA follows the parameters set for you to decide how much or little time you want to spend dedicated to the market. It can also be set to do more advanced tasks like opening and closing positions for you or something more simple like just looking out for trading alerts and leaving you the decision on your next move.
Trading forex and other financial markets can cause you stress and ultimately affect your emotions. If you’re new to forex trading, these emotions can encourage you to hold onto a position for longer than you should or sell a position at the wrong time. Automated EA trading removes the emotions involved because the algorithm trading helps you decide based on what is in front of you, not what you feel like doing could be right.
Building an automated trading algorithm from start to finish can be complicated, so it’s great to have the option to import an EA from somewhere else, choose the program and tailor it to your trading needs. The accessibility is one of the main reasons why EA trading is so popular because you can use it through the MT4 mobile app on the go. This is great for many forex traders who like to trade away from their computers and allows more freedom into what trading hours work for you.
Disadvantages of using EA trading
In addition to advantages, we looked at the key disadvantages associated with automated EA trading.
Not online 24/7
For EA trading to work, you need to run your MT4 platform, which you must install. Unlike a web trader platform or broker, it means you can only access it from the device you have installed it on, a mobile device in most cases. Reliable platforms like FXGrowth have their downloadable app and work with MT4 on most devices. But, your EA can only run when the device is switched on and connected to the internet. You do have the option to run your EA trading around the clock, but you’ll need a VPS or (virtual private server) to do so.
EAs are designed to be trustworthy programs because they follow protocols and work with you to find as many profit opportunities as demanded. However, it’s crucial to use EAs from reliable sources. Otherwise, you could be paying for something that doesn’t work how it’s supposed to, which could result in mistakes and losses. If you’re familiar with algorithm trading and the software, then you have the advantage of potentially creating an EA for yourself. But like many of us, we would choose to import one into our MT4 platform, but we hope we get what we paid for.
Need for humans
As the financial world continues to develop more digitally, there is still a need for the human brain. It is essential always to keep track of how well your EA trading system is performing and assess whether or not it’s following the parameters you’ve set out. We recognised in this review that automated trading and trading bots are emotionless. However, taking out all of your emotions for forex trading could do more bad than good. It’s essential to balance emotions and make sure the EA performance is what you expect, if not better.
Risks of EA trading
If you’re a forex trading beginner, you may be thinking the pros outweigh the cons and EA trading is for you, and that’s great. But it’s also vital to consider what risks could occur if you decide to try automated EA trading.
As a beginner of EA trading, you may want to make the most out of the automated system. This comes with the risk of overstepping your boundaries and setting parameters too advanced to keep up with, resulting in losses rather than returns. We want you to have an in-depth understanding of automated trading and EAs before you start to move on to more significant investments. It may look appealing, the idea of an EA trading robot helping you make decisions, but if something drastic changes in the market, things could take a turn very quickly.
When watching the financial markets, it’s always a good idea to look at the economic calendar to see if interest rates have increased, price announcements or company products are being released. EAs don’t react to updates like these, so you will keep trading until you either change the parameters or stop the process and risk losses if the market reacts to major rate changes. Platforms like FXGrowth offer real-time news updates and signal updates directly to the user to help them with their trading decisions so that you can control your trades when interest rates and prices change.
Trading hit or misses
An EA will only follow the parameters you have set. So, if there is something you notice outside of these rules, you will have to act on this. Market trends are incredibly volatile, so it’s essential to act on what changes are happening to get the most out of your EA. You may just want to monitor the market, but if you see an opportunity to execute a trade outside of the parameters, it’s your decision whether or not to make a move. There may also be times where you have to take control to avoid a massive trading error or risk significant financial losses.
Conclusion – give EA trading a go
Overall, we at TradersBest.com think EA trading is an efficient way to make the most out of your forex journey session as a beginner or an experienced trader. We recommend you give forex EA trading a try because you can start with simple parameters like watching the markets and allow yourself to decide what to do next. Then once you become more familiar with the process, you can develop the parameters and get the EA to do more for you, resulting in successful executions and generating higher returns in the long run.
There are risks of losses and missing out on critical moments because the EA only reacts to what you’ve told it, not outside influences, but you can rectify this by keeping an eye out for any news updates too.
EA trading FAQ
❔What is EA trading?
EA trading is popular among many forex traders who want to make the most out of their trading sessions. EA trading runs on the MetaTrader 4 platform, which allows users to scan through multiple financial markets at a time. It is great for beginners who want to develop their trading skills at online brokerages more efficiently as they have simple and more complex automated services available. Our TradersBest.com review looked at the benefits of automated trading, including removing the emotion that we sometimes have that affects how well our trades perform.
💸Is EA trading free?
EA trading is an automated system that you can find on the MT4 platform. You have to download the MT4 app and log in to an account through a reliable online broker like FXGrowth to access it. EA trading systems are catered to several different skill levels meaning if you’re new to forex trading, you can use a simpler system. Whereas if you’re a more advanced trader, you can add more features to the EA to suit your needs.
🔒Is EA forex trading safe?
Using a reliable broker to source your EA trading system is an excellent idea because you can then trial whether or not the EA has been created correctly. Most platforms should be equipped with a backtesting feature to ensure the security and performance of the algorithm. Brokers like FXGrowth focus on prioritising and developing the ways their customer’s trade.
💲How do I make money using an Expert Advisor?
In our TradersBest.com review, you can find out about how EAs are automated systems that make the trading decisions for you. They follow a list of parameters you have set beforehand. It’s important to stay up to date on financial news and economic trends that may occur to keep your EA ready for new opportunities to look out for. EA trading uses algorithms that can scan multiple markets at once, giving the user more time to focus on other things related to trading.