Expert Advisor (EA)

Algorithmic Trading

Create trading robots with the help of Strategy Builder in R StocksTrader platform absolutely for free! Read more...

Some traders dream of finding a perfect robot that will do all the hard work for them. Of course, not all of these dreams come true, but it's quite possible to automate your trading to a certain extent. EA trading will help you with this.

What is algorithmic trading?

Trading on financial platforms is not always manual. Experienced traders often use algorithms created using code and special software. These mechanisms help to open and close trades according to previously established rules, for example, according to the points of price movement in the underlying market.

Why use algorithmic trading?

When the basic parameters are met, the program can execute a sell or buy order on behalf of the trader, eliminating the need to monitor the market to implement his strategy. Thus, a trader can engage in long-term investing, open and track positions even when there is no time. So trading becomes less stressful and more comfortable - unlike a trader, the program can operate 24/7.

Expert Advisor (EA)

What is an EA?

An Expert Advisor is a special program that works following the trader’s instructions in the trading terminal without their involvement. Since all tasks are performed in the terminal automatically, the program is called a Mechanical Trading System (MTS) or an Expert Advisor.

How does an Expert Advisor work and how useful is it?

The working scheme is very simple: the trader adds an EA to a trading terminal connected to a broker's server and sets up the EA. Then the Advisor starts trading automatically by the strategy preset by the trader.

Expert Advisors make traders more psychologically comfortable when trading on financial markets. They don’t have to make decisions every minute and do not need to do in-depth technical and fundamental analysis: all necessary calculations are already included in the program.

Where to use an EA?

With the development of EAs, algo stock and forex trading gained popularity among users. Algorithmic trading of bitcoins on crypto exchanges also became quite popular.

Anyway, an EA can be efficient and useful in several aspects of trading at once. First, it helps to test any trading idea quickly. Testing them manually will take much more time to get an objective result, and iterating over the robot parameters allows you to save test reports and see what this or that particular algorithmic trading strategy is capable of. This approach will be relevant for scalping when large volumes of transactions must take place on a small timeframe. An EA will also insure the trader from massive financial losses.

How to create an Expert Advisor?

Expert Advisors for MetaTrader 4, the most popular platform, are written in MQL4, a programming language that was developed specifically for working with automated systems. Programmers, who are familiar with this language, will surely have no problems with creating a Forex advisor, while ordinary users may have to spend some effort.

RoboMarkets offers an excellent solution for such cases - a free trading robots constructor that requires no programming skills to work with. Everything is so simple, clear, and convenient that a trading robot can be created by anyone. The Constructor is available in R StocksTrader, a multi-asset algo trading platform with advanced tools for technical analysis and more than 11,700 trading instruments.

How to test Expert Advisors?

Before using an EA in real market conditions, traders have an opportunity to backtest it in the terminal. Such testing may be very useful for traders because it helps to see whether the Advisor they have created works efficiently, shoot possible errors, and estimate approximate profits and losses. Usually, there is a special window in the terminal for this purpose, where users can also optimize input parameters of Advisors and thus increase their performance.

Parting Words For Beginners

In the beginning, traders, who have brief experience with algo trading platforms, may find operations involving trading robots rather difficult, but after several months of automated forex trading they will be able to create their own EAs. If you hesitate about trusting your own money to a computer program, you can configure an Advisor to alert you with sound, thus making your work significantly easier and reducing the time required for performing graphic analysis, expecting signals, and opening and closing positions.

The choice of Advisor on the Internet is pretty wide, but only few of them can really generate profit. If a trader uses all trading robots downloaded from the Internet simultaneously, they may easily lose their money. This is the reason why traders should be very careful when creating trading robots. Also, they shouldn’t forget the results of algo trading achieved with an Advisor on a particular forex currency pair may be completely different from those when trading the other pair. That’s why experienced traders prefer to use their trading robots for those instruments that they tested them on.