Have you heard about Forex EA and robots and got curious about them? Many traders have been speaking out about how these tools helped them with their trading. They have claimed that using these made trading a lot easier and who doesn’t want that right? But is using EA and robots beneficial? Read on to find out about the best forex EA…
What Does EA Mean In Forex?
Using an EA has gotten a lot of interest from Forex traders, but what does it mean exactly? In Forex, EA stands for Expert Advisor. It is a pre-programmed software or robot that generates trading signals whenever an opportunity arises and can also automatically place trades for you. It can be used in many trading platforms and can do most of the work while the trader does other things. Since the Forex market is accessible 24/7, an EA lets a person trade anytime.
What are the advantages of using an EA? Here are some of the best reasons:
- It eliminates emotions from trading. One of the essential traits of the best traders is that they should be able to separate their emotions when trading. If a trader wants to become successful, sticking to the trading plan or strategy is the best way to go. However, some are consumed with greed or fear which affects their decisions and leads to negative results. An EA prevents that from happening and will only work according to what it is programmed to do.
- It detects trading opportunities faster. Being an automated system, it is understandably faster than a human, meaning it quickly identifies opportunities based on the signals the trader provides. The best forex EA systems can make decisions in a fraction of a second.
- It executes orders faster. Just as an EA can detect opportunities faster, it can also execute trades faster. Short-term Forex traders benefit more from using an EA since they need to make quick decisions especially those who trade in short timeframes. Since price changes quickly during those times, a trader must be quick on his feet in order to get profitable trades. With the help of an EA, this is not a problem.
- It makes backtesting easier. The best way to find out whether a trading strategy works well is to backtest. This can be a burden for manual traders but for those who use an EA, this is an easy task especially when done in the MT4 platform.
- It reduces stress. Trading can be very stressful for an average manual trader. However, with the help of an EA, it lessens the burden on the trader. While the EA does its work, the trader can relax, do other tasks, and just wait for any results. This also promotes a healthy work-life balance particularly for short-term traders who are normally glued to their screens.
How Does a Forex EA Work?
For a Forex EA to work, it needs to be programmed with a set of rules or parameters that will ultimately trigger trading decisions.
It utilizes technical indicators to find the best trading opportunities in the market. The EA scans the market and generates trading signals once it detects anything that fulfills the pre-programmed parameters. The trader may also put a code in the EA to automatically enter and exit a trade.
Risk management tools such as take-profit and stop-loss orders can also be coded into the EA to reduce losses. Since using an EA entails non-stop trading, safety precautions are needed to safeguard the trader’s capital. At any time, the trader can adjust the parameters anytime to suit their trading needs.
The best EA makes trading decisions based on the predetermined combination of indicators and strategies encoded into it and executes them instantly.
How Do I Start EA Trading?
There are two ways you can start Forex trading with an EA: by building your own or using an already available one.
Building your own EA requires some knowledge of programming. You can spend time and effort learning how to do it or you can just hire a professional to make one for you.
But if you do not have the time and money, there is also the option of using an Expert Advisor builder. Even without any programming knowledge, you can build your own EA using the builder tool and selecting different indicators and other trading parameters.
One of the easiest ways to start trading using an EA is to use a top pre-built one. You just need to download it and load it into the trading platform. But before you can do that, you need to make sure that the EA is compatible with your broker and their platform. Once you confirm that both are compatible, you may now install the EA into the trading platform. The next step is to backtest it to ensure that it works properly and if it sends accurate signals. You can do this in either a live or demo account.
You might have also seen many pre-built EAs and you might ask, “Can I use multiple EAs all at once?” The answer is yes. Using multiple EAs will generate more trading signals and present you with more opportunities to make a profit. However, too many EAs in your terminal will result in problems and errors so you only need to discern what EAs are the best for your trading plan.
Expert Advisor Platforms
Many brokers allow automated trading in their platform or via third-party software. These brokers are capitalizing on the rise in popularity of EAs that let traders analyze and work the market round the clock even without being in front of the screen. Each of these trading platforms offers different features depending on the trader’s needs. Some use algorithmic trading (EAs) for automatic trading while others use copy trading as their approach. Copy trading is just basically copying another trader’s style.
MetaTrader 4 is probably the most popular trading platform designed for trading and analyzing Forex and other financial markets. Many reputable brokers offer and trust this platform because it has a lot of features that other platforms might not have. Why should you use MetaTrader 4? Here are some reasons why:
- It is very user-friendly
- It offers more flexible and convenient trading
- It provides many analytical opportunities
- It is secure
- It is highly customizable
- It can be used with a mobile phone
- It has full and multi-lingual support
- It offers automated trading using Expert Advisors
What Is The Best Expert Advisor For Metatrader 4?
Technical analysis is a skill that every trader should learn and master. Most traders rely on this to find the most profitable trades in the market. It is also the foundation of their strategy since it gives a clearer path towards their trading goal. However, mastering technical analysis can take a long time as it comprises a lot of aspects and some traders just cannot invest so much of their time.
Fortunately, with automated trading in MetaTrader 4, traders can begin to trade even without having advanced knowledge of technical analysis. Of course, knowing a little technical analysis pays off, but with the help of EAs, trading becomes much easier.
MetaTrader 4 has its own programming language called MetaQuotes Language 4 (MQL4) found inside the platform. It contains basic technical indicators, Expert Advisors, and scripts. MetaTrader 4’s EA can be programmed to alert the trader for any opportunities or to instantly execute an action depending on the set parameters. All EAs in the platform have the same goal of automating trading for every trader. There are different types of EAs in MT4 and they are used depending on a trader’s strategy:
- News EAs. This EA type is developed to make profit based on news releases and any price changes around them.
- Trend Following EAs. This is developed to follow trend movements and changes.
- Breakout EAs. This is designed to enter a trade once the price breaks major support and resistance levels.
- Support and Resistance EAs. This EA is programmed to identify key support and resistance levels.
- Scalping EAs. This EA is sometimes not allowed by brokers. It is used to take advantage of short-term price changes.
- Multi-currency EAs. This EA uses multiple currency pair data to find the most profitable opportunities.
- Hedge EAs. This EA opens more than one opposing position, reducing loss in one position while making profit from the other.
- Price Action EAs. This EA is programmed to trade in any time frame and depends on price movements.
Under these EA types, you can find many free and paid EAs which can help in your trading strategy and find profitable trades. However, not all of them give accurate results so you need to backtest them to find out. Multiple EAs can also be used at the same time, but not every one of them will work together. The good news is that you can backtest with your EAs to see whether or not they will give profitable results or not. If it is not profitable, you can just edit until you find what EAs work for your trading strategy.
IG is another comprehensive Forex broker with full access to over 80 currency pairs. Many traders enjoy using IG for a variety of reasons such as:
- Easy to use and beginner-friendly
- Can be accessed through mobile or desktop
- Has lower margin rates
- Provides skills training and financial advisory
- Has a wide range of technical indicators and tools
Its trading platform is browser-based and does not require downloading any software. There are four trading platform options and one of them is MT4 which is the most suitable for beginner traders.
Does IG Allow EA?
Yes, IG allows EAs to run on MT4. Traders with an IG account can already use automated trading and enjoy fast executions without third-party bridges. Trading using MT4 also gives you access to over 50 currency pairs at lower costs unlike trading with other brokers. You can also customize indicators and add-ons on MT4 which would work well with expert advisors.
If you are not yet confident in trading using EAs, you may want to try trading using an IG MT4 demo account first. You can run and test different EAs and also other add-ons that are also available in their live platform.
Do Forex Robots Really Work?
Forex robots work but not all of them. They are not perfect tools that will give results every time. Although they are programmed to operate faster than any human, there are some things that forex robots cannot just do. Yes, they can somehow predict what will happen based on past market behavior but they cannot fully predict everything. A lot of things can happen in between trades and no robot can replace a human’s observation skills.
This does not mean that you should not use Forex robots. It still depends on your preference and if you do, you have to be careful in discerning what robots are effective. There are many Forex robots available that promise great profits when they actually do not. Always read reviews to avoid getting scammed.
Are Forex Robots Profitable?
Forex robots can be profitable but do not expect to get high profits from using them. If that was the case, everyone would already be using Forex robots to trade and getting rich. However, we do not see that happening. Successful trading still entails concentration and knowledge from the trader. Although you could use a Forex robot to complement your trading as some robots can still help analyze the market while you make the final trading decision. Short-term traders would get more benefit from using robots as they need to think and act fast because of the shorter time frames.
How Much Does A Forex Robot Cost?
There are free Forex robots and there are paid robots that range from $100 to $1000. Some even go as high as $10,000. If you are a beginner trader, you might want to stick with the free robots first and test them on a demo account. At least if they turn up fake, you have not lost anything. The problem lies with priced Forex robots as it can be hard to determine whether they are legitimate or not.