What is Expert Advisor mt4?
Expert Advisors (EAs) are programs that run on the MetaTrader 4 (MT4) platform, used to monitor and trade financial markets using algorithms. They find opportunities according to the parameters you set, then either notify you or open a position automatically. … For most traders, EAs are primarily used for forex trading.
What is the Advantage of Expert Advisor for Autotrading?
Among the advantages of trading using a robot or EA are:
- Save time in trading. Especially if you use a VPS rental, so you only occasionally look at your trading platform.
- Free or more precisely reduce the psychological pressure of the trader. Robot does not hesitate in the execution of buy or sell. If humans tend to have doubts if market conditions are uncertain.
- Trading robots are equipped for money management, so we no longer need to count how many lots we want to open. Moreover, there are some who have a drawdown (loss in a row) low.
How do I choose a profitable EA?
Forex robots (EA) have become very popular ever since the MetaTrader 4 trading platform was released. The many commercial EA offers and frequent scams do not make it any easier to find a robot that genuinely works well.
To find an EA that fits your trading style and risk tolerance, you need to analyse various statistics such as maximium loss (drawdown), profit ratios and the risk-to-reward ratio.
Forex trading is very risky, you can lose all of your money even with a robot that displays good statistics. Before using an expert advisor with a real trading account, you need to know in advance the financial risk that you can afford to take. The most profitable robots are usually also the most risky ones. So you also should choose a robot based on your appetite for risk.
Before you invest your money, it is essential that you test the robot with a demo account and do backtests on historical market data. Choose an STP forex broker that allows you to trade micro lots in order to start real trading with minimum risk and also to see if the EA works well with that broker.
How to choose the best broker for EA?
After programming or choosing your EA strategy, you will need to make a decision which brokerage to trade with. Each FX Broker has different characteristics that can affect your EA either positively or negatively. Some of the features to look for when choosing the right Broker for your EA would be:
● Connectivity or Speed of Execution – how many milliseconds does the brokerage take to accept and confirm the trade. Also, will the brokerage provide you with a free VPS? This is important for your EA as the longer a trade takes to be confirmed, the more likely your EA could miss the price.
● Last Look or No Last Look – The term Last Look simply means that a brokerage has the opportunity to reject a trade within a given time interval. No Last Look simply means once an LP gives a price quote it must accept the trade on it. This is important to your EA as a No Last Look brokerage may reject your trade and a Last Look brokerage provides a fill with possible slippage, but you will enter in the trade.
●Depth of Market– shows how many buyers there are at a price level, and how many sellers there are at a price level. This feature may be important for your EA to determine if there is sufficient volume to execute your trades.
Scalping allowed – Some brokerages do not allow high frequency traders or short term fast execution. This is important to your EA, as the brokerage may not allow your EA to operate.
● Dealing Desk / STP – A Dealing Desk brokerage will execute and hold your trades at it’s own trading desk. The STP brokerage will pass the trade to a bank or larger liquidity provider. This is important to know who is taking the other side of your EA’s trade and are they trustworthy?
● Back Testing – is accomplished by reconstructing, with historical data on the brokerage’s DEMO , trades, how the EA would have performed in the past using rules defined by the EA strategy. A brokerage’s historical data is important to ensure how your EA will perform in the future with the same liquidity.
● Leverage – The brokerage will offer leverage on your deposit / equity. Leverage will vary with every brokerage. A good rule of thumb is any leverage under 200:1 maybe an STP brokerage and anything over 200:1 is a Dealing Desk. This is important to your EA to have enough leverage to run your program along knowing what type of brokerage you may be dealing with.
● Commission / Spreads- The commission is the cost the brokerage implements to each trade. The spread is the difference between the bid and the offer the brokerage streams to the trading account. The trading costs are important to your EA as they can turn your successful back testing into a losing EA if the spreads are too wide or the commissions too high.
You have now learned that creating your own strategy or purchasing an EA is just the first decision you have to make when assembling a successful strategy. Choosing a brokerage or liquidity provider that suits your personal EA strategy needs could be just as important. This list of brokerage features are just some of the important aspects a brokerage or liquidity provider will need to meet before opening an account for your EA.