Forex Trading Software – The Expert Advisor
Expert Advisors are quite sophisticated software tools used in forex trading. The advisor is designed around a specific set of algorithms, and excutes trades from your trading platform.
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.
Many times, in an effort to grab that last pip of profit, a trader will hold on to a trade even when logic dictates an exit. On the other hand, a trade is often exited prematurely due to fear, and profits are left on the table. The Expert Advisor trades with a plan, regardless of outside influences, and does this 24 hours a day when the market is open.
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?
There are alot of questions to be answered prior to purchasing your Expert Advisor. You need to be sure that it will run on your trading platform, and that you can run multiple EA’s on one account. If you have a mini account, be sure that your EA of choice isn’t only for regular accounts.
One more thing you should consider before installing an EA on your trading platform. Remember that when using an EA, it controls your trades. If you have a power failure and your computer shuts down, you have an unmonitored open trade. Once a trade is placed, it’s in the hands of your broker; the trading signals from your EA are on your computer.
In areas prone to power failures, it might be wise to consider opening a VPS (virtual private server) account and running your trading platform from there. This way, you wouldn’t have to worry about crashing computers or power outages because your trading platform wouldn’t be running from your computer. There is also an added benefit in that it would be accessible from any internet-connected computer.
More traders are trading with Expert Advisors today than ever before. They can be a very useful tool. If you do your homework and get all your questions answered, you should be well on your way to a profitable trading experience.
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