Forex trading is not always successful, and the results can sometimes be disappointing. Some Forex traders lose control of their emotions, and out of fear of missing out on profits, they tend to make decisions that can negatively affect their accounts. One way to avoid this problem is to use an Expert Advisor (EA). Expert Advisors for forex trading are gaining popularity in Pakistan.
What are EAs?
It is a trading system that automatically opens and closes trades based on pre-set rules.
We cannot recommend specific Expert Advisors because they are unpredictable but some professional traders find them useful.
Forex is a market that operates 24 hours a day, 5 days a week. It is impossible for people to be active round the clock. However, a machine can trade for several days without having to take a break. In addition, EAs can be used on different trading platforms.
Some of them allow traders to fully customize their trading systems and then use them in platforms such as MetaTrader 4 and MetaTrader 5.
An Expert Advisor is a fully automated trading system in which no trader’s participation is required. If you rent a virtual server and put a robot on it, then trading will be conducted round the clock.
Even the best Forex advisors lose their relevance over time. Profits begin to decline. Some robots completely drain the deposit. There are two ways out of the situation:
- Stop using advisors and switch to manual trading.
- Try to optimize a trading robot, which will make it profitable again. The point of the process is in the selection of a new set of settings that will make a profit.
For all robots that are in the “Expert Advisors” section:
- Testing is performed on different trading instruments and time intervals. In addition to the currency pairs recommended by the authors, the robot’s efficiency is checked on other instruments.
- Optimization is in progress (sometimes the result is unsatisfactory). Optimization problems may exist for those robots whose settings do not allow influencing the algorithm of its operation directly.
Before describing the functions of Forex advisors, we would like to tell you about four types of advisors that you may encounter:
- News Advisor – As the name suggests, the main purpose is to take advantage of various news events and large price movements that may occur due to any news.
- Breakout Expert Advisor is specially designed to open a trade when the price breaks out predefined support and resistance levels.
- Hedging advisor – Any advisor that plays two corresponding and opposite positions, reducing losses on one and simultaneously increasing profits on the other, falls into this category.
- Scalping Expert Advisor – This type of Expert Advisor aims to provide a small profit as soon as it becomes available. The EA will open and close an infinite number of trades with any profit, so your EA can trade several times a day depending on market conditions.
How to find EAs that work?
There are several sources. The complexity of this task depends on the needs of the trader.
Advisors can be downloaded for free from specialized forums. The advantage of this method is zero costs and a clear description of the principle of operation. But you have to work on optimization before finding any success.
Some brokers post collections of advisors in the public domain on their websites. We are talking about old algorithms. The efficiency of such advisors is questionable.
You can create your own robot by ordering a code from a programmer. Depending on the responsibility of the contractor, you can get both an ideal advisor, taking into account all the wishes of the customer, and a craft with the absence of half of the functions.
You can buy a trading robot directly from a seller. A built-in market is available directly in MetaTrader, through which not only Expert Advisors are sold but also indicators and auxiliary scripts.
Here you can choose the best trading robots, but the price range is very wide. There are also free offers in the market, but they are more suitable for getting acquainted with auto trading than for making real money.
In theory, you can share your trading idea on the profile forum. If it is deemed worthwhile, then traders familiar with programming can write an advisor for free. But before you write a trading robot with someone else’s hands and for free, you need to be prepared for the fact that it will become public domain, and there are no guarantees that all the author’s ideas will be implemented.
Programming trading robots is a separate topic; there are special programs and even constructors for this.
To write a bot on your own, you need at least a good knowledge of the MQL4 or MQL5 programming language and have programming skills. If you are unfamiliar with programming languages, you will need to either understand them well or outsource the development of trading robots.
A few precautions when buying a product
When buying an advisor, you need to follow the standard safety rules:
- It is advisable to buy a bot only through a platform that acts as an intermediary. This reduces the risk that the seller will not send the advisor to the buyer after receiving the money.
- Before buying an advisor, the statistics of its trade are studied. If the developer, under various pretexts, does not allow you to get acquainted with the advisor’s work results before buying, you should not buy a bot from him. Ideally, monitoring of a real account on myfxbook.com or another service should be connected.
- At least in general terms, the principle of trade should be described. The developer will not reveal all the strategy features, but the style and idea must be clear.
Feedback from other buyers is not reliable evidence of the bot’s effectiveness. It is easy to “wind up” the seller’s rating and evaluation of his products in any store. Therefore, you should always rely on your assessment and trading statistics on the real market in choosing a trading robot.
Criteria for selecting suitable trading advisors
Despite the differences between different types of trading algorithms, there are several general recommendations for selecting bots.
The work style is taken into account, which directly affects profitability, risk, and the allowable load on the deposit. If, for example, martingale, averaging, locking tactics are unacceptable for a trader, then the corresponding robots are excluded from the list.
Equity is aligned with the developer’s recommendations. It makes no sense to start working if the author of the advisor recommends trading with the minimum lot for every $ 1000 of the deposit. For trading, there is an opportunity to allocate only $ 200- $ 300. In this scenario, the risks will be 3-5 times overestimated, which will reduce the chances of the robot’s survival at a distance.
The number of setting items should not be overstated. If there are dozens of them, then the Expert Advisor is almost impossible to optimize.
It is undesirable to use robots built on neural networks or using artificial intelligence in trading. It sounds impressive, but the result is questionable in most cases.
Forex brokers to get started using EAs
Almost all the brokers allow using EAs for trading. There is no restriction imposed in applying EAs. However, the difference comes in trading efficacy because of several factors like spreads, trade execution latency, requotes, etc.
Brokers like Pepperstone and IC Markets are very popular in Europe for using Expert Advisors. Traders from Pakistan may also open accounts with both of these brokers to get started. They provide ECN accounts that are suitable for auto trading as there is no latency in execution, low spreads and no requotes occur.
Bottom line
Forex EAs help traders to fully automate the trading process. EAs can reduce the influence of fear and greed in your trading. However, you have to be very cautious while buying an EA or ordering the development of your own program. You may need plenty of testing to optimize your system. IC Markets and Pepperstone can be a good start for your auto trading in Pakistan.