What is an Expert Advisor?
An Expert Advisor, also known as an EA, is an automated trading robot for MetaTrader. The computer does all of the buying and selling for you. Trading through MQL software solves one of the biggest problems that traders face – their emotions. All that an EA needs to function is a set of rules. Whenever the market matches the rules, it automatically places the trade. It never second guesses itself or decides to skip trades. Better yet, it never gets tired. EAs let you trade 24 hours a day.
Expert Advisors can do all sorts of things. Say, for example, that you want to open a new trade with a 50 pip stop loss. If that stop gets hit, you want to lose 1% of your account, which most forex traders call money management. You would have to do all of those calculations in your head, open the order box, type the correct lot size into the order box, then push send. Or, the EA could accomplish all of those steps in a fraction of a second.
Traders often use EAs as order management tools. They prefer to retain control of when to enter the market, but do not want sit in front of the screen for the next 4 hours waiting for an exit. EAs solve this problem. They actively listen and wait while you go about your full time job.
Most traders prefer to fully automate their strategies from start to finish. The set of rules that they develop answers three basic questions.
- How do you know when to enter the market?
- How do you know when to exit the market?
- How do you handle the money management?
Many EA developers add a few bells and whistles to their strategies. The most commonly requested add ons are:
- Trailing stops
- Trading hours (i.e., only trade between the Euro and US sessions)
- Stops and Take profits
- Money management
- No trading on Friday and/or Sunday
- The ability to close all open trades on Friday afternoon, which eliminates the risk of market gaps from holding trades over the weekend.
If you would like to create your own custom Expert Advisor, visit our MetaTrader Programming page.