Recently I’ve been writing about how manual traders can use expert advisors as tools. Since most people believe expert advisors are only used to automate trading and replace the trader, I think some traders are missing a great opportunity to use expert advisors as trading tools to make their trading easier, more accurate, less stressful and potentially more profitable.
If you missed the other posts in the series, you can see them here:
- 5 Ways Manual Traders Can Use An Expert Advisor
- Using Expert Advisors For Trading Strategy Creation And Optimization
Using a Custom Indicator or Expert Advisor Before Placing a Manual Trade
If you are a manual trader there are 4 areas using an expert advisor can be used to improve your trading. Let’s take a look at each one.
Identify Trade Setups: A lot of traders use trading systems where a number of indicators must be in agreement to trigger a trade entry. If you have all the indicators on your charts, this can make for a very cluttered trading environment. To clean the charts up, you can create an indicator to alert you when all the trading requirements are met.
For example, instead of having all the indicators on the chart, you can have an arrow indicate when all the trading conditions are met. This can help you identify only the trade opportunities when ALL conditions are favorable for taking a trade. This avoids forcing trades or misreading the indicators because you want to get into the market.
Send Email Alerts: Instead of sitting in front of the charts all the time looking for trade setups, you could have an indicator programmed to send an email alert when the trade setup appears. Manually trading can be very time consuming and exhausting. Email alerts can help greatly by allowing you to step away from the computer screen without missing good trading opportunities.
I’ve personally done this a lot and even bought a Blackberry phone so I would be notified immediately when the email is delivered. I set up a Gmail account that I only use for alerts. The Blackberry is programmed for notifications when an email arrives.
Calculate Lot Size: When a trade opportunity presents itself, you want to get into the market as soon as possible. This is especially important if you are trading from the lower time frames or using a scalping strategy. A few pips difference between when you identify the trade and when you enter the trade could make a lot of difference.
Instead of spending important time figuring out the proper lot size to use, you could have an EA build that figures out the lot size to use for you. If you are using a lot size formula which requires calculating lots based on percentage of account balance and stop loss value, this can be time consuming and best done automatically to avoid mistakes and delays in entering the trade.
Calculating Risk To Reward: I personally only want to take the best trade setups that have a good risk to reward ratio. I’d rather miss a trade by being selective than put my money at risk unnecessarily. EAs and scripts that can calculate the risk to reward ratio on the trade I’m about to take?
These are just some of the ideas of how to use an expert advisor as a manual trader before the trade is placed. You might be able to think of some others. Now let’s take a look at the benefits of using an expert advisor to help you make the best trading decisions.
Benefits Of Using An Expert Advisor Before The Trade
Reduce Time In Front Of Charts: Let’s face it… trading can be time consuming. If you are waiting for the right trading conditions, you could be staring at your charts for a long time. Some days, the trading conditions might never trigger a trade. Using an expert advisor to alert you to trade opportunities allows you to step away from the charts.
Not staring at your charts for long periods of time is important for another reason. The longer you look at your charts, the more likely you are to start seeing trading opportunities. The temptation to get into the market is so great you might start seeing trade setups that are not according to plan. Using an expert advisor to identify and alert you to only the best trade setups ensures you are only taking the best trades.
Sticking To Your Trading Rules: Using an EA can help you identify only the trade setups that meet the rules of your trading system. But they can also help you be more accurate in your trading. For example, you can limit your trading to only the trades with a good risk to reward ratio. Plus you can make your trading more accurate by automating your lot size calculation and avoiding costly mistakes or entering high risk trades on a whim.
Some manual traders do not like expert advisors because they want to make the trading decisions themselves. That is great. But you can use expert advisors to help you make those trading decisions before the trade is placed. I hope this has sparked some ideas you might apply to your manual trading.
On Friday I want to go over how you can use expert advisors when you are placing the trade. Do you have any ideas you’d like to share? Let me know in the comments section below.