Note:
We advise that you avoid Forex EAs that recommend working only with a specific broker, as this could lead you to lose your deposit. For trading with Forex EAs, we recommend choosing RoboForex as the company has great expertise in the area and offers the best combination of low commissions and advanced technical support.
Forex trading is a long and continuous journey. Forex traders need to learn a wide range of strategies and frameworks to generate a generous return on investment from the Forex trading. Working professionals always find it difficult to do Forex trading as they may not find sufficient time to learn trading strategies. The Forex market can be volatile because several macroeconomic factors influence the currency movements. Most working professionals may not handle the stress and anxiety caused by this volatility. Emotions also play a huge role in trading; most traders undergo emotions like fear and greed while executing their Forex trading orders.
This is where Forex Expert Advisors (EA) come in. A Forex Expert Advisor carries out the Forex trading on behalf of the trader. The expert advisor (EA) eliminates the emotional factor and makes the trading journey a probability game. EAs develop trading strategies by assessing the statistical advantages associated with each trade.
TradersUnion put together a guide that helps Forex traders understand the importance of expert advisors and the process of using them to generate steady income from Forex trading.
Do you want to try automated trading? Open an account on Roboforex!An expert advisor is a non-human. It is a specifically designed software application that assesses the trading conditions and executes trades on behalf of the trader. It helps traders understand the opportunities and risks involved in each trade and enable them to make an informed decision.
An expert advisor works on Metatrader platforms like MT4 and MT5. Programmed in Meta Quotes Language (MQL), these expert advisors use several mathematical models to determine the entry and exit points of a Forex trade. Traders can determine how they want to take help from an expert advisor. For example, a trader can set up an expert advisor only to send trading signals. Some traders use expert traders to automate the complete process of trading.
To use the Forex EA, a trader needs to download and install it on your device. Upon installing EA, the trader must set instructions and parameters on how it should help in executing the trading functions. The Forex EA works by these instructions and generates inputs on entry and exit points for a trade.
Traders can create customized technical indicators and incorporate them into Forex EAs. A Forex EA makes use of the existing indicators on the Metatrader terminals and the special technical indicators created by the trader to implement analytical functions and generate trading strategies.
Metatrader platforms like MT4 and MT5 have built-in Forex EAs. Traders can use these built-in EAs or build their own Forex EAs based on their requirements. It is always advised for beginning traders to use the demo version of EA before implementing them in the real-time trading environment.
A Forex trader must know the advantages and disadvantages of EAs before using them in the real-time trading environment.
👍 Pros
• A Forex EA detaches human emotions from trading
• A Forex EA offers real-time and actionable inputs for quick decision making
• A Forex EA does not undergo stress and anxiety; it can trade 24x7 on behalf of a trader
• A Forex EA enhances the accuracy of backtesting
• A trader does not need to worry about a lack of trading skillsets when an EA is in place.
👎 Cons
• Forex EAs work based on mathematical and statistical models. They don’t consider fundamentals and macroeconomic events that could influence the trading conditions
• Forex EAs are prone to technical problems. Technical problems like internet failure, hardware failure, or a power failure might impact the ability of EAs
Forex EAs are classified into several types which include scalper expert advisor, news expert advisor, hedge expert advisor, breakout expert advisor, and adaptive expert advisor.
This advisor aims to book small profits through a lot of small and short-term trades. The trading volume of a scalper is very high when compared to a regular trader. High-frequency trading helps brokers receive a huge commission. However, the trader should be careful while using scalper EA because most brokers restrict the trading account with suspicious high trading volumes.
This expert advisor closely monitors the macroeconomic events, political trends, and financial news that could impact trading conditions. With a news expert advisor in place, a trader can hedge the risk and benefit from fluctuations caused due to the news events.
Hedging is a risk management strategy that helps to offset the losses in investment by taking an opposite position in a related asset. Hedge EAs focus on maximizing profits from one position while minimizing losses from the opposite position. They often aim to take the advantage of pricing differences between two instruments, without getting impacted by broad market movements.
Breakout EA gathers information on the support and resistance levels in Forex trading. This EA is instructed to open a trading position as soon as a breakout happens at a pre-determined support or resistance level. It closes the trading position before the price breaks out from the support or resistance level.
Adaptive advisors closely monitor the market and act based on the market movements. While using the adaptive expert advisor, you just set the parameters and EA would make decisions on behalf of you.
A trader may need to follow several rules while using Forex EA. These rules help the trader to use EA effectively to increase the return on investment from Forex trading.
Backtesting helps to develop appropriate trading strategies for Forex trading. It is advised for traders not to deviate from these strategies while giving instructions to Forex EA in a real-time environment. Since these strategies were proven to deliver results in the past, they are likely to generate positive results in the future too.
As already mentioned, technical issues such as power failure, connection failure, or hardware failure can interrupt the services of Forex EA. So, the Forex trader should ensure that everything that could interrupt the Metatrader connection is working perfectly. Maintaining an uninterrupted power supply unit (UPS), reducing the number of windows opened on the MT4 workspace, and having a reliable internet connection would help.
Your Forex EA works based on the instructions you give. If your instructions and parameters aren’t good, your EA may not deliver favorable results. So, as a trader, you need to determine what exactly your EA should do. For instance, if you want your EA to open a position after a breakout and close it just before reaching the resistance level, you should instruct your EA to gather information on support and resistance levels.
There are several Forex EAs available in the market. However, most of them aren’t reliable and safe. As a trader, it is your responsibility to analyze various EAs and download a reliable one. Read through customer reviews and take opinions from experts before making the decision.
It is always advisable for traders to use the demo versions of Forex EAs. The demo version would help traders understand how EA takes your instructions, analyzes data, and executes the Forex trades. Committing the real money without testing would be risky.
Several Forex EAs are available to download for free. A few of them with the downloadable links are provided here:
Traders New uses Ichimoku indicator to execute the Forex trades accurately. It executes the order when the current price crosses the support level and closes if the price moves in the opposite direction.
Daydream can be the most suitable Forex EA USD/GBP currency pair.
You may love to use Calypso if you are trading on MT4. It is a multicurrency expert Forex EA. It enables you to execute trades with stop loss and without stop loss. Since this is a hedging expert EA, it eliminates the risk of your trading account going to zero.
DayProfit SE is an expert EA for trading in currencies such as GBP/USD, EUR/USD, USD/CHF, and EUR/GBP. This EA can generate a daily income of $50 with an initial deposit of $1000. We suggest beginning traders use the Cent Account by depositing 10 Euros to test this EA before committing a huge capital.
This Forex EA makes use of the envelopes indicator to build channels. Envelopes indicator is used to identify trading ranges and determine the trend. It also helps to identify the oversold and overbought periods.
Euro Fx2 works perfectly for currency pairs involving in GBP with a 73% success probability. It effectively uses Moving Averages Convergence Divergence (MACD)-histograms to identify the trading signals.
After downloading a Forex EA, you may need to install it on your device and activate it. The following steps help you to install and activate a Forex EA.
Step 1: You just need to go to the EA folder that you have downloaded and copy all the files in it.
Step 2: Go to your C: Drive and find the folder named, Metatrader4.
Step 3: Under the folder, Metatrader4, go to the subfolder with the name, experts, and paste in it the EA files that you have copied in step-1. Just click allow button if any pop-up windows appear asking for admin permissions.
Step 4: Start the MT4 trading platform.
Step 5: Go to the Expert Advisors section on the MT4 platform and click the ‘+’ sign, where you can find the available EAs.
Step 6: Select the desired EA and drag it to the charts on the screen.
Step 7: Make changes to the settings when the pop-up box appears and then press ‘OK.’
Step 8: Start the demo trading with the chosen EA before committing the real money.
Yes, you may want to use an EA for two reasons:
First, it helps in executing trades without your presence. The trader just needs to set parameters and instructions on EA and let it do the rest of the trading. If you don’t have time to participate in Forex trading, an expert advisor could be the best option.
If you are a beginner and don’t have relevant knowledge of Forex trading, you may take help from EA. A beginner can read through a few guides online and list out parameters that could generate positive results in Forex trading. Just set these parameters into the EA so that it would continue to do the trading on your behalf.
Forex traders, who have ample time and knowledge to carry out Forex trading, may not need to depend on Forex EAs. Experienced and full-time traders can use technical indicators to track the price movements and execute Forex trading orders manually.
Not all brokers are good for working with Forex EAs. We at, Traders Union, attempted to shortlist the top 3 Forex Brokers for expert advisor’s trading. The three best Forex brokers are RoboForex, Admiral Markets, FxPro.
| Broker | Trading Platforms | EURUSD typical spread | Execution Speed | Account types | |
|---|---|---|---|---|---|
MT4, MT5, and cTrader |
1.3 Pips |
Fast |
Prime account, ECN account, RTrader account, Pro-cent account, and Pro-Standard account. |
||
MT4 and MT5 |
0.8 Pips |
Fast |
Trade.MT5, Invest.MT5, and Zero.MT5 |
||
MT4, MT5, and cTrader |
0.7 Pips |
Fast |
MT4 Account, MT5 Account, cTrader Account, VIP Account, and Edge Account |
RoboForex was founded in 2009. It is regulated by Cyprus Securities and Exchange Commission (CySEC). With a customer base of over 0.8 million, RoboForex facilitates trading in stocks, Forex, ETFs, commodities, and metals.
RoboForex offers a cent account that helps inexperienced Forex traders convert the dollars into cents while testing various trading strategies with EAs. The Cent Account limits the losses if the trading instructions given to the EA don’t work in favor of the trader. The Cent Account is always better than the demo account as it involves trading with a real, but negligible amount of money. With a minimum deposit of $10, an inexperienced Forex trader can test various EA trading strategies.
The high leverage offered by RoboForex works well for experienced traders who use EAs with proven Forex trading strategies. Since EAs execute the strategies impeccably without emotions, experienced traders with high trading volumes can unleash the potential of leveraged trading.
Admiral Markets is regulated by CySEC, AISC, and FCA. The major benefit with Admiral Markets for inexperienced Forex traders planning to test EAs is the lowest minimum deposit. Yes, Admiral accepts deposits as low as $1 or equivalent in other currencies. It means an inexperienced trader can test an EA in a real-time trading environment with just $5 to $10.
The accuracy of EAs would increase if they have access to a broad range of technical indicators. EAs make use of these technical indicators to generate trading signals. Since Admiral has over 50 technical indicators, it would enhance the ability of EAs to generate accurate trading signals. If you don’t have your own customized trading indications, you may let the EA use Admiral Market’s indicators to implement analytic functions and generate trading signals.
FxPro is regulated by CySEC, Bahamas SCB, FCA (UK), and South African FSCA. It offers a demo account that helps inexperienced traders test the trading conditions. The benefit of FxPro is that it allows traders to test the EA with the demo account. It means that an inexperienced trader can test as many trading strategies as possible with EA without committing real money.
Backtesting is one of the important steps in developing and testing trading. With a Forex broker like FxPro, you can backtest your EA for various trading strategies. All you need to do is to choose MT4 on the FxPro trading platform, go to the ‘View’ column, select ‘Strategy Tester’ from the drop-down list, and set the parameters for backtesting.
On a whole, EAs are beneficial for both inexperienced and experienced Forex traders. EAs can gather technical information and analyze it to generate trading signals. EAs can automatically open and close trades based on the instructions given by the trader. People, who don’t have time for full-time Forex trading, may use EAs to execute trading strategies in their absence. Expert advisors are classified into scalper expert advisor, news expert advisor, hedge expert advisor, breakout expert advisor, and adaptive expert advisor. The Forex brokers like RoboForex, Admiral Markets, and FxPro work perfectly with EAs. All these three brokers facilitate trading on MT4 and MT5 trading terminals and offer competitive EUR/USD spreads.
EAs are software applications that execute trades based on the set parameters and instructions. They execute orders when trading conditions meet a specific instruction. So, EAs are highly accurate in executing orders.
Yes, both expert advisor and robot advisor are the same. The names are used interchangeably. Both are non-humans and work based on predefined rules.
You can use the copy trading strategy that enables mirroring the trading strategies of professional traders. Traders also use services like Percentage Allocation Management Module (PAMM) and Lot Allocation Management Module (LAMM) to automate trading.
Yes, you can use RoboForex as it offers an MT4 trading terminal that facilitates trading with EAs. We suggest you use the Cent Account offered by RoboForex to test various strategies with EA before putting in real money.
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Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
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