Forex trading isn’t easy just like how it appears on commercials and advertisements. You can’t become a millionaire overnight or double your money in a short span of time. Because of these things, some Forex traders tend to become too greedy and fearful, which in turn affects their trading negatively. One way to eliminate the intrusion of emotions when trading, it is best to use Expert Advisor (EA) and you can find it on MetaTrader 5 (MT5) trading platform.
What is a Forex Expert Advisor?
Expert Advisor or simply EA is an automated system that monitors the movement of the market without human supervision. It is capable of providing signals that will identify trading opportunities for traders.
When you use EAs, you must also learn how to program it so it automatically generates trading signals based on the data that you have placed. When the data is triggered, you will be notified of the existing trading opportunity. There are a lot of trading platforms that utilize EAs and among them are MetaTrader 4 and MT5.
You have other options aside from EA. There is another very comprehensive automated trading. It is called the Forex robot. This program also works by identifying the market patterns and generating trading signals. The only difference between EAs and Forex robots is that Forex robots can automatically trade on behalf of the trader. However, an EA will only notify the trader if it is triggered and the trader will have to manually enter the trade.
As you already know, EAs will send you notifications whenever the preset rules are triggered. These preset rules are manually placed by the trader therefore, you still need to have good knowledge about the market and not merely rely on the capabilities of your software.
Automated Trading Reduces Emotional Decisions
Trading can be full of ups and downs. You cannot be too happy for winning a trade nor be too sad for losing a trade. These emotions can hinder or influence your trading decisions. But there’s still a chance to avoid this hindrance to a better trading opportunity – the use of EAs and Forex robots. Inexperienced traders will need such tools because automated trading software follows a strict set of rules and your trades are completely free from human emotions and interventions.
Understanding the Importance of Data
The results of backtesting may not always be that reliable. Seeing great backtesting results, you may start to think that it’s solid proof of a prosperous system. This might not always remain true because the results of your backtesting depend on the quality of data that you have applied when you back tested the system. In MetaTrader 5, the default data can go as high as 90%.
Testing the MetaTrader Connection
Before anything else, it is an important step to test your connection in MT5. Turn on your platform and it should connect directly into your broker for you to run the Expert Advisor. Nothing seems to be more disappointing than thinking that you have a working EA only to realize that it got disconnected and was not able to reconnect again.