Even if you are just starting out in the foreign exchange arena you almost certainly have heard of a forex ea. You may have heard it called a forex robot or expert advisor but they all do the same thing, automate our trading. Before we go any further you do need to understand that your dreams of this little robot mindlessly trading you into your own mansion is not accurate.
Take a veteran trader and a skilled software designer and we can get that manual trading method into an automatic forex ea. The software is then installed and loaded into your trading platform. Depending on who programmed it, expert advisors can do a ton of things. While particular ones may just throw you a notification, the more intricate ones can control all aspects of your trade.
What makes each of these forex robots unique is in the way they are automated to get in and exit the market. The great thing about a forex ea is that it takes the emotion out of trading. This is typically the downfall of a novice. The forex ea is coded to follow very strict trading guidelines and does not even understand how to trade beyond them. Now depending on your knowledge of the markets this can either be a good thing or a curse.
What unquestionably sets the robot apart from a human trader is its capability to compute and decide what to do in a millisecond based on multiple indicators. Human beings while amazing, are at this point unable to calculate and process that amount of information and respond instantly.
The expert advisor is coded to check for particular signals and changes in the market. When it reaches a predetermined point it will buy or sell and start or complete a trade. Some disadvantages with automated trading arise when the broker catches on and delays your trades or if the market changes renders your robot obsolete.
Now before you go and buy every forex ea out there, make sure you do some research. The internet is full of forex robots and several do live up to their claims, but be cautious as most fall flat. Always remember to try out your new robot on a demo account first before letting it trade with real money.
If you get good and discover your own profitable trading method and dabble in programming you can develop your own expert advisor. Again the benefit of this is taking out the human emotion factor that just cant hold out or jumps the gun. The software will trade based on its precise programming of market signs.
Automating your forex trades is tremendous and can help you but keep in mind no expert advisor will make you wealthy. Know that a robot can only trade based on the data it was programmed with and can quickly become obsolete if strategies adjust. With that said I still think every trader should have an expert advisor in their arsenal.
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