By
Tom Herod
Expert advisors are not magic money machines. They are just
software programs written to automate currency trading systems. Expert
advisors are commonly referred to as EA, robots or auto-traders and,
depending how you use them, can be a blessing or a curse.
In the currency exchange market, robots are most often written for the MetaTrader 4 (MT4) trading platform. In order to develop your own MT4 robot there are a couple of prerequisites of which you should be aware.
- First, you need a basic understanding of the MetaQuotes Language (MQL4), MT4's programming language for automating technical indicators and trading strategies.
- Second, you need a trading strategy you feel is successful. After all, if you don't have a trading strategy you don't have anything to automate.
After your robot is developed it may be linked to a currency chart where it can trade your account on autopilot, interacting with your broker's server.
Expert Advisor Advantages
- Consistent execution! Since an EA is an automated implementation of your trading strategy, it will execute that strategy in a consistently robotic fashion. It will execute your strategy - first time, every time - without deviation according to the trading rules you have defined.
- Dispassionate operation! An EA possesses no human emotion (the enemy of all traders). It has no fear or greed to make it quit profitable trades prematurely or losing trades too late. It will just trade how its programmed to trade.
- 24 hours a day! That's right, a robot operates twenty four hours a day, unchaining you from your trading station. Liberating you from keeping an eye on currency charts for entry and exit signals affords you more time to spend on developing your trading strategies, performing back tests and studying the market.
- Multi-tasking! Finally, an EA has the ability to monitor multiple currency charts concurrently, uncovering many more trading opportunities than you could discover and analyze on your own.
Expert Advisor Disadvantages
- It is impossible for a robot to possess human intuition or to recognize non-programmable issues. As a trader, you must always consider the big picture, being aware of market fundamentals and the myriad issues which might affect the ebb and flow of the market throughout the day. In other words, as a human being, you have the ability to understand when to turn the expert advisor on and when to turn it off - a robot doesn't.
- Many novice traders mistakenly believe that a robot will turn them into more successful traders. When, in fact, instead of turning them into consistent winners it may turn them into more consistent losers. Their only real gain will be in the freedom they get to hone their trading skills while the robot is trading their account.
Selecting An Auto-Trader
There are literally thousands of automated forex traders commercially available - some excellent - some not so good. If you're thinking about buying a robot then it's important to understand how it operates and whether or not it suits your trading style. Begin your due diligence by reading forex robot reviews and conducting comprehensive analyses to ensure that the EA you plan to purchase is going to help you meet your trading goals.
Expert advisors are not magic money machines. They are just
software programs written to automate currency trading systems. Expert
advisors are commonly referred to as EA, robots or auto-traders and,
depending how you use them, can be a blessing or a curse.In the currency exchange market, robots are most often written for the MetaTrader 4 (MT4) trading platform. In order to develop your own MT4 robot there are a couple of prerequisites of which you should be aware.
- First, you need a basic understanding of the MetaQuotes Language (MQL4), MT4's programming language for automating technical indicators and trading strategies.
- Second, you need a trading strategy you feel is successful. After all, if you don't have a trading strategy you don't have anything to automate.
After your robot is developed it may be linked to a currency chart where it can trade your account on autopilot, interacting with your broker's server.
Expert Advisor Advantages
- Consistent execution! Since an EA is an automated implementation of your trading strategy, it will execute that strategy in a consistently robotic fashion. It will execute your strategy - first time, every time - without deviation according to the trading rules you have defined.
- Dispassionate operation! An EA possesses no human emotion (the enemy of all traders). It has no fear or greed to make it quit profitable trades prematurely or losing trades too late. It will just trade how its programmed to trade.
- 24 hours a day! That's right, a robot operates twenty four hours a day, unchaining you from your trading station. Liberating you from keeping an eye on currency charts for entry and exit signals affords you more time to spend on developing your trading strategies, performing back tests and studying the market.
- Multi-tasking! Finally, an EA has the ability to monitor multiple currency charts concurrently, uncovering many more trading opportunities than you could discover and analyze on your own.
Expert Advisor Disadvantages
- It is impossible for a robot to possess human intuition or to recognize non-programmable issues. As a trader, you must always consider the big picture, being aware of market fundamentals and the myriad issues which might affect the ebb and flow of the market throughout the day. In other words, as a human being, you have the ability to understand when to turn the expert advisor on and when to turn it off - a robot doesn't.
- Many novice traders mistakenly believe that a robot will turn them into more successful traders. When, in fact, instead of turning them into consistent winners it may turn them into more consistent losers. Their only real gain will be in the freedom they get to hone their trading skills while the robot is trading their account.
Selecting An Auto-Trader
There are literally thousands of automated forex traders commercially available - some excellent - some not so good. If you're thinking about buying a robot then it's important to understand how it operates and whether or not it suits your trading style. Begin your due diligence by reading forex robot reviews and conducting comprehensive analyses to ensure that the EA you plan to purchase is going to help you meet your trading goals.
Tom Herod is a full-time currency trader and developer who writes
custom indicators and expert advisors for the MetaTrader platform. He
also blogs and writes reviews for commercially available MT4 Robots,
including the popular Forex MegaDroid, FAP Turbo, Wallstreet Forex Robot, and many more.
Article Source:
http://EzineArticles.com/?expert=Tom_Herod
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