Expert advisors (usually called EAs) are software products that can help you automate many aspects of Forex trading. They can automatically analyze markets for you, look for the best opportunities, and even execute profitable trades on their own. Using EAs correctly can make you much more profitable and effective in the long run. However, you should clearly understand how they work and how to use them. In this article, we explain the basics of using EAs and talk about their main pros and cons.
How EAs work
Basically, there are many different programs that fall under the category of expert advisors. Probably the most well-known EAs are trading robots: such software can automatically analyze the market to find trading opportunities and execute trades. The most complex Forex robots allow you to automate all of your trading experience and reach extreme rates of profitability, but they are quite rare and also expensive. Some robots don’t analyze markets: instead, they watch news and use them to trade.
There is also a special kind of Forex robots specialized in scalping: they execute many small trades to capitalize on small market movements. Since robots can act very quickly, they are suitable for making hundreds of trades every day and can be very profitable if programmed the right way. However, it’s an important thing to know all the pros and cons of trading EAs before you start using them.
First of all, expert advisors can save you much time and effort by automating many aspects of trading for you. With them, you won’t have to monitor markets manually: instead, you’ll be able to move your focus to more important things like risk management or portfolio building. Second, complex EAs can execute trades for you, and they are completely rational: their decisions are not affected by emotions, and avoiding strong emotions seems to be one of the most important things in trading.
However, expert advisors are not perfect. Even when you’re buying a ready-made product, you need a lot of experience and skill to operate it properly, and such products can be very expensive. Making your own Forex robot requires even more skill: you need to learn how to code and master technical analysis. Moreover, no expert advisor is perfect, so losses are always possible no matter how modern and complex your algorithms are, so make sure to test them on a demo account first.