Trading Forex using Expert Advisors (Foreign Exchange Auto-Trade)

 

Automated Forex trading means trading currency pairs using a combination of computer hardware and software. This software is called an Expert Advisor or else Forex Robot. An Expert Advisor is a tiny piece of code that plugs into a trading platform in order to deliver non-stop and non-human controlled Forex trading. Most Forex Robots are developed for the MetaTrader4 platform but there are also many robots available for other platforms such as MetaTrader5, JForex, TradeStation, NinjaTrader, etc. Forex auto-trade originates back in 1999 when online retail trading was born.

“Automated trading is a sophisticated branch of systematic trading and that means all automated trading systems are systematic. Automated Forex trading is also called algorithmic trading, robotic or black-box trading”

 

How an Expert Advisor Actually Works

Most Expert Advisors are running as Forex scalpers. Scalping means opening tens of trade positions each day lasting a few minutes and targeting returns of 5-10 pips. These Forex Robots incorporate a trading strategy designed to trigger and execute orders under certain conditions. These conditions are based on technical analysis tools and that means the existence of 2-4 indicators operating as filters to the Forex Price Action. Once the readings of these indicators meet certain criteria then a trade is executed. Additional filters can contain variables such as spread control, focus on a certain session, or news avoidance.

Usually most of the Expert Advisors available trade the most liquid currency pairs and especially EURUSD, GBPUSD, and USDJPY.

Adapting on Personal Profiles

• Users almost always can interfere and alter some of the variables of the implemented trading strategy by tweaking manually the technical parameters of the program.
• Forex Expert Advisors at ForexRobots.net

 

 

Forex Auto-Trade Advantages

Here are the main advantages of Forex Auto-Trade:

(1) An Expert-Advisor works non-stop, 24/5

(2) An Expert Advisor can execute tens of trades per day without feeling fatigued

(3) Forex Robots do not face human weaknesses such as fear or psychological swings

(4) Forex Robots can execute trades in tiny segments of a second which is very useful for a scalping-machine

(5) Forex Robots can monitor tens of different currencies simultaneously and chose their trades upon a wide range of different choices

(6) Different filters can be applied including instant spread or slippage control

(7) The use of automated software provides traders with the chance to manage multiple trading accounts simultaneously

 

Forex Auto-Trade Disadvantages

Here are the main disadvantages of Forex Auto-Trade:

(1) Forex Robots can not distinguish the effect of important news in the currency market

(2) Forex Robots require the use of a VPS Hosting, and that means $40-60 cost per month (some Forex brokers offer free VPS)

(3) Forex EAs is an unregulated market which contains tens or even hundreds of Forex scams

» Free Forex VPS Hosting and ECN Brokers

 

Tips when Trading Forex using an Expert Advisor

The are hundreds of Forex Robots available today some of these tools have really performed well during the past decade (for example FAP turbo during 2008-2010), others not. Here are some important tips:

(i) Do not believe in someone who promises extreme returns without any risk. Give extra weight to the historical performance by focusing on actual profits in pips and not on just the winning ratio (%)

(ii) Choose Expert Advisors which are programmed by professional traders who use them in their own trading accounts

(iii) Demand a high level of technical and service customer support

(iv) Test any Expert Advisor on a demo account before you use it on your real account in order to test the performance and optimize the parameters

(v) Do not trade manually on an account that an automated machine is running already. If you execute trades manually you can confuse the risk management of the Forex robot and the outcome will be a disaster.

(vi) Make sure your Forex Broker allows automated trading and scalping so you will not face any issues

(vii) Be sure about the quality of your internet connection or use a VPS hosting (even better)

(viii) Combine any automated software with the use of a Forex Trading Rebate Plan. Forex rebate plans work perfectly with automated strategies which execute many trades on a daily basis

(ix) Avoid using Expert Advisors that implement martingale strategies (i.e. doubling the bet after every loss) and offer a low Reward/Risk ratio

(x) Select your Forex broker very carefully, you need an ECN/STP Forex broker, offering tight spreads, fast order execution, and no re-quotes

• Find popular Forex Rebate Plans at Forex-Rebates.com

Beware of Forex Robot Scams

Scams may be always avoided by conducting the due diligence method on any Forex firm. The US NFA and CFTC sites may be used for that purpose.

► National Futures Association (NFA) has a database of registered member firms

 

Minimum Configuration for Retail Traders

If you have decided to create a fully-automated trading system, these are the minimum requirements:

1. An account with an ECN Forex broker offering tight spreads, fast execution, and tight slippage
2. This account must be dedicated to automating trading (no other strategies should be applied in the same account)
3. A Windows/macOS/Linux computer with minimum an i5 processor, 200GB HD, 8GB System Ram
4. A very fast and reliable internet connection
5. Alternatively, you can use a Forex VPS hosting service
6. An Expert Advisor (commercial or custom-made) that is compatible with the trading platform you are using
7. A backtesting tool to calculate the historical performance of your EA (usually this tool is built in your automated trading platform)
8. A Demo Account to test your EA before moving into a Real Account

 

Compare Automates Forex Trading Systems (Forex EAs)

Here are some of the most popular Expert Advisors for automated Forex trading.

EXPERT ADVISOR	TRADING	DEVELOPER	FEATURES	COST AND LINKS
■ EA BUILDER DESIGN YOUR CUSTOM EAs	■ PLATFORMS: MetaTrader4 MetaTrader5 TradeStation ■ MULTI-STRATEGY CREATOR ■ SHORT-TERM TO LONG-TERM HORIZON	-Team of Programmers and Traders	Create your own Expert Advisor Free for creating indicators Timeframe: Any chart □ Full Money Management □ Hundreds of Options and Tools □ No Programming Skills Required □ Develop EAs for trading Forex, Equities, Commodities, and ETFs	■ 97 USD (one-time) ■ Free for creating Indicators » EA Builder Web Page » Review the EA Builder
■ WALLSTREET FOREX ROBOT	■ PLATFORMS: MetaTrader4 MetaTrader5 ■ FOREX SCALPER ■ 4/5 DIGIT TRADING	-Developed by a team of programmers and traders	Specialized in Trading: EURUSD, GBPUSD, USDCAD, USDJPY, USDCHF, AUDUSD, NZDUSD Timeframe: M15 Chart □ Strong Money Protection Mechanism □ License for Unlimited Demos and  3 Real Accounts	■ 299 USD ■ Free the Omega Indicator » Wall-Street Forex Page » Review the Robot
■ FOREX DIAMOND	■ PLATFORMS: MetaTrader4 ■ FOREX SCALPER ■ 4/5 DIGIT TRADING	-Developed by a team of programmers	Specialized in Trading: GBPUSD, EURUSD, USDCHF, USDJPY Timeframe: M15 Chart □ Tight Spread and Slippage Protection □ License for Unlimited Demos and  1 Real Account	■ 279 USD ■ Free Updates » Forex Diamond Web-Page » Review the Robot

 

■ Trading Forex using Expert Advisors (Foreign Exchange Auto-Trade)

Forex-Rebates.com