Expert Advisors (EAs) are mechanical trading systems that are specifically designed to enable trades to be executed automatically on the MetaTrader 4 and MetaTrader 5 platforms. EAs can be programmed to alert you of a potential trading opportunity and execute trades automatically on your behalf, including automatically adjusting take profit levels, trailing stops and stop loss orders.
Each Expert Advisor is unique in that it follows different rules to enter and exit the market. One of the primary advantages of an EA is that it never trades on emotion, which is one of the easiest ways to damage your forex trading account during live currency trading. Forex Expert Advisors consistently follow a trading system within pre-programmed parameters. This is one of the many factors that make these programs so appealing to investors.
There are several different types of MT4 and MT5 Expert Advisors. Some are specifically designed to stay active on a 24-hour basis while others are designed to only trade news events. The goal of EAs is to automate trading operations and generate a profit at the same time.
Expert Advisors use technical indicators in order to evaluate current market conditions and place trades. For an EA to work effectively it must be attached to an individual chart on the MT4 or MT5 trading platform. EAs can analyze countless price influencing factors simultaneously in order to make a trading decision. This coupled with a complete lack of emotion ultimately leads to a highly successful trading combination.
How do Expert Advisors Work?
The Expert Advisor program works by calculating the various indicators that it was designed to use. When the market conditions meet the precise criteria as outlined in the EA’s source code, the EA takes action. Numerous conditions can be assigned to an EA for entering and exiting the market. Further still, conditions can be assigned to manage trades for multiple take profit levels and trailing stops.
How to Use Expert Advisors
To use an Expert Advisor you will need to install it on the MetaTrader 4 or MetaTrader 5 platforms, which is a fairly simple procedure. If your EA comes with any instructions read them thoroughly before proceeding.
To install an EA on MT4 or MT5 you will need to follow these steps:
- Put the EA in a place where the platform will be able to use it. In most installations of MetaTrader the location is C:\Program Files\MetaTrader4-5\experts. The actual EA is a file that ends with .EX4.
- When the EA is in the correct location on your PC you will need to restart the MT4/MT5 platform.
- The EA will appear on the navigation menu on the left once MT4/MT5 starts up again.
Once you have installed the EA you will need to attach it to the appropriate chart on MT4 or MT5.
What Types of Expert Advisors are Available?
There are many different types of Expert Advisors available. Some of the more common types of EAs are outlined below:
- Breakout Expert Advisor: A breakout EA opens a trade once the price breaks through predetermined resistance and support levels.
- News Expert Advisor: News EAs take advantage of news, events, announcements and large price shifts that often occur when financial news is released.
- Hedge Expert Advisor: An EA that trades two opposing and separate positions, and minimizes losses on one position while it facilitates maximum returns on the good trade.
- Scalper Expert Advisor: A scalper EA aims to secure small profits once they become available.
Can More than One Expert Advisor Run on the Same Client Terminal?
You can run more than one Expert Advisor on the same MT4/MT5 client terminal, provided the EAs are compatible with one another on the same terminal. However, there are some platform limitations. Only one EA can communicate with the trading server at a given time. If you have multiple EAs actively running on one client terminal and more than one EA tries to communicate with the trading server you will receive the message “Trade context busy” in the logs.