So What Exactly is a Forex Robot or Expert Advisor?
A forex robot or expert advisor is simply an automated forex trading software designed to automatically place trades and/or to signal entry and exit points for you throughout the trading day in hopes of gaining pips and increasing your account. This little script is installed onto whatever trading platform you are using to trade in the forex market. Below you will find an image of the trading platform I use to trade in the Forex market. It’s called the Metatrader 4 and is probably the most popular trading platform made available to traders by a majority of Forex brokers.
A cut of the MT4 platform and the expert advisors circled to the left.
If you look to the left hand column, you will see under the “navigator” section a list of indicators, scripts, your account folder and the expert advisor section. It is here where you may find a number of robots or expert advisors to choose from.
Your Metatrader 4 trading software platform is usually downloaded from your broker’s site as soon as you sign up with either their demo or live forex trading account. Depending on your forex broker, many times the MT4 will already come loaded with a few metatrader expert advisors or EA’s. If you do buy some form of automatic forex trading software, it could be easily installed on your MT4. The robot vendor will provide installing instructions. They usually involve copying and pasting the forex currency trading software onto the “experts” sub folder of the MT4’s folder found inside “program Files”. Once installed, you simply drag and drop the chosen robot from the navigator to the designated trading chart of the currency pair the auto robot was designed to trade. eg. EUR/USD, GPB/USD, USD/JPY etc. The last steps would be to activate the robot itself and adjust trade settings such as the desired risk, minimum spread, and other trading parameters. You then let it do its thing.
Most expert advisors are designed to trade using one specific system, or even a combination of a few forex trading systems or strategies. Some of them were designed to make long term trades, while others use some form of a scalping strategy that capitalizes on well placed short term gains when a currency pair’s prices are ranging or staying within a zone.
Benefits of Automated Forex Robots
Once activated, the expert advisor acts as a sort of currency probe, gathering and analyzing price movement data all day and all night long if necessary. This makes it unnecessary for you to have to stare at your charts for hours on end until the right time to place a trade.
Also, the expert advisor is a machine. It has no emotions such as greed and fear. In this way, if the robot has a high percentage of successful trading, it’s perfect for a consistent trading of an account. Total objectivity and discipline are necessary for being successful in the forex market. The trick is to find an expert advisor that has a track record for having at least a 90% success rate. Finding the best forex expert advisors takes a lot of trial and error.
If you do decide to try a few expert advisors to enhance your trading or to simply do the trading for you, it is recommended that you test it in a demo account first for at least 6 months. You can find a number of these robots to choose from by doing a search on Google no problem. If you are not seeing at least a 90% success rate in trades after 2 months, just get your money back. And remember, a forex robot is simply a very powerful tool. The principles of disciplined consistency and impeccable money management still apply and should be adhered to.
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7 comments
Kevin Phoenix on June 26, 2009 at 7:57 am
Very good post, educational, entertaining and enlightening… you write with clarity and an obvious passion. It is an area that so many, would be blog authors over-look.
I found a particular resonance with your comment… “The principles of disciplined consistency and impeccable money management still apply and should be adhered to.”
Dianne Hansen on June 27, 2009 at 10:13 am
Yes, a robot is a powerful unbiased, cool-headed tool. I agree that it’s wise to run a 6 month trial period.
Debra on June 27, 2009 at 1:21 pm
I can’t believe you have to test for six months before you use the software. I guess you really have to be sure that it is working for you before you risk your money. Great sound advice as always.
admin on June 28, 2009 at 12:19 am
To get the real success percentage, I think it has to be tested over a long period of time, like 6 months to a year. Because I like what I have experienced so far in 3 months, I decided not to wait 3 more months and will be adding some more money this summer. On another note, by the way, your site is beautiful, and PR 3 also! Nice job and thanks for the comment!
Leo Saraceni on July 2, 2009 at 11:28 am
“If you do decide to try a few expert advisors to enhance your trading or to simply do the trading for you, it is recommended that you test it in a demo account first for at least 6 months.” That is solid advice. Most people see tools as powerful as this one and jump the gun thinking the robot will work miracles. Excellent tip!
Debra Berndt on July 4, 2009 at 12:28 pm
Very cool tool for trading. I like the screenshots. Leaving mine to the experts right now but I am sure others will find this insight very helpful. Interesting that you test it for 6 months, makes you think it takes time to learn and master the market.
Cala West on July 10, 2009 at 3:07 am
Thanks for this informative article. I must say that I have never been able to take the leap of faith and have a robot manage my money. But as you say it’s just a tool.