Automation of various processes in trading has already proved its effectiveness. Therefore, investors' interest in trading programs is growing every day. And Expert Advisors are one of the most popular types of such software.
Why do you need Expert Advisors for Forex?
The Expert Advisor is a program that provides automatic management of individual trading processes. That is, while you are resting, the robot interacts with the currency market instead of you. It can independently enter into transactions or give signals to open/close a position.
Using Expert Advisors allows you to automate almost any strategy. Such programs are often created using the MQL language. It is quite easy to learn, so many traders create Expert Advisors on their own.
If you want, you can buy ready-made trading robots or order a program for yourself. An Expert Advisor, created on the basis of a well-designed trading algorithm, can take over most of your work.
What operations can an Expert Advisor perform?
A program operates according to the commands laid down in it and the prescribed conditions. All expert Advisors can be divided into two main categories – for analytics and for trading.
Market analysis programs
Such programs can perform the following tasks:
- drawing custom and built-in indicators on charts;
- recording the necessary information about the market in special files;
- search for entry points based on the received data;
- sending signals for opening and closing trades.
Expert Advisors of this type do not trade independently – they give you (or collect) useful information so that you can make your own decision based on it. They can also be used to control indicators – the available funds in the account, the size of the spread, the distance to the placed orders, and so on.
Trading Expert Advisors
Expert Advisors in this category are able to:
- open and close positions according to a given algorithm (signals from several indicators, etc.);
- place pending orders;
- hold a position;
- open and close the trades in parts.
That is, the program can perform all your actions. But it is important to understand that by trading automatically, it can bring not only profit, but also losses.
Trading advisors can be divided into 5 main types according to their key function:
- Trending ones. The algorithm of these robots is configured to trade with to the trend. Positions are opened for a longterm, with a large price movement range.
- Multi-currency Expert Advisors. Robots that can simultaneously work with a large number of currency pairs.
- Scalpers and pipsers. They are used for intraday trading and can simultaneously open and close many trades. Such robots are indispensable if you are trading using a scalping strategy.
- Combined Expert Advisors. The algorithm of these advisors has several functions. For example, it can conduct multi-currency trading and work with the trend.
- Pyramid advisors. They increase the lot after closing a position that did not bring a profit. Thus, they give you a "second chance", but at the same time they increase the risks.
Trading programs can work around the clock, which increases the probability of making a profit.
In the screenshot below, you can see the statistics of the Expert Advisor, which, with an initial deposit of $12,495, gained net profit of $3,866 in 44 days, that is, 31.1%.
Advantages of Expert Advisors for Forex
According to current statistics, more than 80% of transactions in the foreign exchange market are made by trading robots. Such mass use of them is explained by clear advantages:
- Trading without emotions. If the trader can give in to the desire to win back or the fear of losing money, the Expert Advisor will act strictly according to the algorithm laid down. This reduces the risk of deviation from the trading plan.
- The speed of execution of trades. When scalping or in the case of sudden market changes, the player does not always have time to react in time. Expert Advisors process new data much faster. Therefore, they can open and close a large number of positions without deviating from the rules of the strategy. And the programs are able to work 24/7 with this level of efficiency.
- Risk diversification. It can be difficult for a trader to work on multiple trading accounts with a large number of currency pairs. But the advisors can take on this task. And the more instruments are traded correctly, the less the risk of being left without profit.
- Fast and accurate calculations. As part of one or more strategies, the trader needs to analyze the information and make calculations: the best place to enter the market, the appropriate lot size, stop, take profit, the period of holding the position, etc. The Expert Advisors perfectly cope with all the calculations in the shortest possible time.
In this way, the robots neutralize your weaknesses, significantly increasing the efficiency of trading. But it is true only if they are properly configured.
Is it possible to earn consistently with the help of Expert Advisors
It is quite possible to get a profit on a regular basis using the programs. But you must understand that the advisors do not have the same flexibility as the human consciousness. The market changes periodically. These changes must be noticed and reflected in the trading strategy. Only this approach will allow you to make a profit over time.
No matter how smart the Expert Advisor is, it will not edit its code. Therefore, when the behavior of the asset changes and reduces the effectiveness of the current algorithm, the program will have to be reconfigured. If you do not perform such edits, the robot will continue to trade on the strategy that has lost its relevance. As a result, the number of trades closed in plus will significantly decrease. Sometimes the changes in the features of the movement of the instrument are so strong that it becomes necessary to create a new Expert Advisor from scratch.
That is, you can earn money with the help of robots, but you need to constantly monitor the market in order to make changes to the trading algorithm in time.
How to test Expert Advisors
There is always a risk of buying a robot with an error in the code. The principles of the strategy may also be incorrectly formulated. In the end, you will simply drain your deposit. Therefore, it is important to carefully check the Expert Advisor before giving it access to a real deposit.
A demo account is well suited for testing the robot. And it is advisable to continue testing for 3-4 weeks. At the same time, it is important to test its operation in different market situations – sideways movement with minor fluctuations, uptrend and downtrend. During the test, the Expert Advisor should open and close positions only under the conditions that are laid down in its algorithm. And do it right, without issues.
Not every broker provides full-fledged automated trading and testing capabilities. To do this, you can choose one of the following options:
Another way to check the effectiveness of the Expert Advisor is to use an archive of quotes.To do this, you will need to open a strategy tester on a demo account with an Expert Advisor installed.This function allows you to compare the effectiveness of the trading robot on the downloaded historical data for the selected currency pairs.
You can download quotes for testing on the Alpari and Ducascopy websites. You should not take data from MetaQuotes, because they have a low level of quality.
If it is not possible to check the robot before buying, then you need to pay attention to the statement of the real account. It allows you to see the results of the trading robot operations. The name of the trader, the name of the broker and the account number must be indicated there. Sometimes sellers show the results of demo trading – this is not the best option.
You can supplement the robot's check by studying the history of trades. The MYFXBOOK trading account monitoring service allows you to get reliable data on the effectiveness of the Expert Advisor. It provides real-time monitoring of the robot's actions.
You should always check the Expert Advisors, because there are many bad offers on the market. Buying a trading robot and losing money in the end is a common experience. And if you can not fully test the Expert Advisor, it is better not to buy it.
In the screenshot above, you can see the data on the unprofitable Expert Advisor. The total amount of losses for six months was $ 1,421.28 with a starting deposit of $10,000.
A trading robot is a tool that may be initially poorly configured. But if you spend time searching and carefully check the selected offers, you can find a good advisor. However, even it needs to be constantly reconfigured to meet changing market processes.
If you are interested in Expert Advisors for Forex trading, we can invite you to visit our store, where high-quality programs are presented. They all contain detailed descriptions, instructions, and statistics. If you want, you can test them on a demo account.
How to ensure the stable 24/7 operation of the Expert Advisor
Without using special services, you will have to leave your computer running so that the Expert Advisor continues to work around the clock, which is not very convenient. The best choice in this situation is a VPS server. This is a virtual environment that completely copies the PC operating system. You can install a terminal and any trading programs in it. When your PC shuts down, the VPS server continues to run. And all the programs running on it, too.
Such servers can be rented – there are many offers on the market with different options and prices. It is better to choose those options that are geographically closer to the broker's servers – this will reduce the time required for data transfer. You also need to pay attention to the rating and reviews. VPS can and should also be tested before launching trading with large volumes.
You can read more information about VPS servers in our article.