The Expert Advisor - Forex Trading Software
The Expert Advisor is a sophisticated piece of trading software comprised of a specific set of rules that sits on your trading platform and executes your trades. Essentially, it is a robot.
Most forex traders fail because they succumb to the human emotions of greed and fear. Trading with an Expert Advisor removes these emotions from trading. They are logical.
Under the influence of greed or fear, traders will frequently either stay in a trade in order to grab extra profit when the trade should be closed, or exit a trade prematurely and lose out on profit. The beauty part of trading with an Expert Advisor is that it trades with a plan - not emotion - and does so 24 hours a day during market hours.
The Expert Advisor monitors the market for the trader and will enter and exit trades based upon its predetermined parameters. It is also capable, unlike a human, of monitoring support and resistance levels, indicators, and a host of other factors in multiple timeframes with lightning speed and making instantaneous decisions.
There are many Expert Advisors on the market today, and the prices run from OK to ouch. One must be sure to do some research and get answers to questions such as; are they timeframe or currency specific? Do they follow trends or attempt to predict them? How do they handle risk management? Do they recommend a 2-4% risk or something lower, such as 1-3%? Do they support stop losses? How do they handle take profit levels? Do they ride downturns and only exit trades once they’re in profit?
As you can see, there are many factors to be considered when purchasing an Expert Advisor. Some other things you’ll need to know are what trading platform(s) the EA will run on, whether or not you can run multiple EA’s on one account, and whether or not it can be used with a mini account.
Prior to installing an EA on your trading platform, there’s one more thing to think about. What happens if your computer dies, or the power in your area goes out? Remember that the EA handles your trade, and resides on your computer, but open trades are in the hands of your broker. In this case, you would have an unmanaged open trade.
If you are located in an area that is prone to power failures, you might want to consider opening a VPS (virtual private server) account and loading your trading software on it. That way, your platform will continue to run without you monitoring it, and it can be accessed from any location.
Expert Advisors are definitely helpful tools. Do your homework and conduct some in-depth research before making your purchase and your experience should be a good one.
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