Wouldn’t it be wonderful if all your forex trades were based on expert advice from someone who could analyze all the charts, trends, news and more and tell you what would be the most profitable action? And wouldn’t it be almost too good to be true if this advisor didn’t charge you a penny for all this? What if I say that you can have such an advisor in your corner, except that it would be a virtual one? Still interested? You should be.
The MetaTrader 4 (MT4) platform contains programs that allow for the automation of trading and analytic processes, called Expert Advisors (EA). An EA is essentially software that has specifically been written for MetaTrader to help traders make informed trading decisions, and can also be programmed to automatically execute trades on your live account. This flexible and dynamic software can be programmed to take any information of your choice into account, provided it is available on MT4, to help you make trading decisions.
While there is a plethora of paid EAs available online, you can also choose from a variety of free expert advisors. But, do they really work? To assess this, you should know that there are different types of EAs.
There are basically four types of EAs that you are likely to come across:
Free or paid, all expert advisors are programmed to either execute trades for the trader and manage various aspects of the trading operation or to simply notify the trader of trading opportunities. Whether the EA is efficient and effective depends to a large extent on the developer of the software, which is why it is useful to do some basic research and comparison before choosing which one to use.
While there might be plenty of other benefits of using expert advisors, it is also important to remember that they aren’t without their limitations. For one, you need a good computer and uninterrupted internet connectivity for the EA to do its job efficiently. On the other hand, EAs can be a bit human at times, given that errors do occur. This is why it is important to choose wisely. Lastly, remember that this is software that works on quantifiable data and might not be able to analyze fundamental data, such as political or economic events that could impact price movements.
So, while EAs can make life a lot easier, they do not completely free you of having to do some of the work yourself too!
If you liked this educational article please consult our Risk Disclosure Notice before starting to trade. Trading leveraged products involves a high level of risk. You may lose more than your invested capital.