Let’s Begin with the Definition
Expert Advisor is an automated system that can analyze the market, find specific trading setups, and act accordingly. EAs can open and close trading positions themselves, relying on programmed settings.
Today, there are dozens of pretty successful Advisors on the market, both paid and free. Most of them are designed specifically for MetaTrader 4 and MetaTrader 5. You can use programs that are already built into the platform, purchase an Expert Advisor that suits your trading strategy, or even create your own program that meets your requirements.
Why Do You Need Expert Advisors?
Most traders use EAs to save time. You should agree that it’s very convenient when the program finds suitable market situations and opens and closes trades on its own. You don’t have to monitor the market and wait for the right moment yourself.
There is another group of traders, though. These people are looking for easy and quick profits and hope that the program will do all the work for them. To their great regret, the Advisors don’t bring much profit on their own. And in addition to a good Advisor, a trader needs a trading plan, strategy and risk management system to get consistent profit.
Benefits of Trading Advisors
Let's take a look at the main advantages of trading robots:
- Trading around the clock - the program never gets tired and monitors the market 24/5.
- Simultaneous work with several currency pairs and several charts.
- Instant reaction to a trading setup, usually too fast for humans to do.
- Trading without negative emotions involved.
- They work both on a demo and on a live account.
- Easy to use.
Of course, Advisors can increase your overall profit. Especially trading robots are suitable for people whose main source of income is not Forex. Such traders usually have little chance of monitoring the market constantly. In this situation, good Advisors are very useful.
Disadvantages of Advisors
Now let's talk about the risks involved:
- The risk of losses during a major news release.
- Low level of profit compared to proper trading by an ordinary trader.
- Advisors’ inability to respond to obviously profitable trading setups, if they are not programmed to do so.
- Connection issues.
- Chance of scamming - it is important to choose a Trading Advisor wisely.
Remember that the Trading Advisor is just a robot. It acts according to its program and is not able to assess the situation on the market in the way that a person can.
In addition, any Advisor should always be monitored. Due to the lack of a proper reaction to the news release or high volatility in the market, a trading robot can cause more losses than profits. Check the program from time to time and personally evaluate the charts. By working together with your Advisor, you are more likely to get consistent profit.
How to Choose a Trading Advisor?
Before choosing a program, decide on a strategy and a trading plan. This way you will know what kind of trading setup your Expert Advisor should look for. What to do next?
- Search the Internet for a program that suits your trading plan. Carefully study the conditions for opening and closing trades (ins and outs).
- Carefully read the reviews about this Advisor. Read reviews not only on the developer's site but also on third-party sites. Make sure the reviews are real.
- Check if the selected program has detailed instructions for installation and further use.
- Install the Expert Advisor correctly and test it on a demo account first.
- Constantly check how the program works, especially during news releases.
Conclusion
It’s impossible to say for sure if you need a Trading Advisor or not. However, with the correct use of the program, you can save a bunch of time and combine Forex with other activities.
My advice is - give it a try. Choose a Trading Advisor that will fit perfectly into your trading plan and see if your profits increase. Keeping a trading journal will help you to compare your overall performance with the robot and without it. Good luck in trading.