What is a MetaTrader Expert Advisor and how does it work?August 10, 2020 2022-12-26 14:11
What is a MetaTrader Expert Advisor and how does it work?
MetaTrader Expert Advisors are algorithms that can identify trading opportunities, enter orders and manage trades. They allow traders to leave the trading to the platform while they focus on more important tasks. In this post you will learn more about EAs and how to create your own MetaTrader 4 EA.
How to use an Expert Advisor in MT4?
Expert Advisors, or EAs, allow you to partially or fully automate the trading process. They consist of algorithms that can monitor numerous indicators and inputs and make complex calculations to generate trading signals. Trading signals based on the algorithm can be used to generate alerts, or to generate orders. Positions and risk can also be managed by the EA using the full range of order types.
You can download free expert advisors, buy them, or create your own EA. Free EAs are unlikely to offer much of an edge, while those you can buy are a hit and miss affair. The only way to make sure an EA does exactly what you want to it to is to create your own, based on your own rules.
If you want to know how to make an expert advisor for MT4 there are several approaches you can use. If you know how to program with MQL you can build your own expert advisor. You can also use EA builders to create EAs without any programming skills. Finally, you can use a service that provides expert advisor programming for MetaTrader.
EAs are very easy to install and run on MetaTrader 4 and 5. You simply paste the EA into the Experts folder in the MetaTrader folder on your hard drive. Then, you go to the Expert Advisors section under the Navigator on MetaTrader. Click on the ‘plus’ sign and your EA should be listed there. Click on your EA and drag it onto a chart. Finally, a popup box will appear for you to adjust the EA’s settings.
To learn how to trade with an expert advisor, it is advisable to initially paper trade the signals produced by an MT4 expert advisor to ensure it is working correctly. When you are happy that the EA is working correctly you can start entering trades manually. In the case of an automated MetaTrader 4 expert advisor, you can use a demo account with live market data to make sure the EA is working correctly.
Advantages of an EA
There are several significant advantages to trading with a forex Expert Advisor.
Automated trading system can trade around the clock on multiple markets at the same time. Whenever a market is open, your EA can trade it, and there is no limit to the number of systems, currency pairs and time frames you can trade simultaneously. You can also trade other asset classes like cryptocurrencies, stocks and commodities.
An automated forex trading system or Expert Advisor can generate signals in fractions of a second. They can do this faster than any human, and without any chance of human error. EAs do not get tired, lose concentration or make mistakes, no matter how long they trade for.
EAs also remove the negative effects of emotion on trading decisions. It is well known that the weakest point in a trading process is often the person doing the trading, and automated systems can be used to eliminate this problem.
Finally, EAs mean you do not have to spend all your time watching the market.
How to create an Expert Advisor for MT4?
If you do not have fairly extensive programming skills, there are two ways to obtain your own custom EA. You can use an EA builder, or you can make use of an MQL programming service.
EA builders act as an easy to use interface that writes the MQL code for you. This is fine for a very basic EA, but these applications do have their limitations. An EA builder will not be able to automate complex strategies or create unique solutions. Often creativity is required to create a winning EA, and this may be a problem with an EA builder.
Nordman Algorithms specializes in MQL programming of EAs and custom indicators. Our team has vast experience working with MetaTrader and developing automated trading systems. We can turn your idea into a reliable EA that leverages the full power and functionality of MetaTrader.
Our experienced team will make sure there are no logic flaws in the system. The architecture can also be designed to accommodate additional features later. Our team will help you set up your EA to do what it is supposed to and provide ongoing support. We will also make sure bugs are removed if they ever arise.
Types and kinds of EAs
EAs can be designed to exploit any type of trading strategy:
- Trend Following EAs that follow trends while avoiding flat periods can be easily coded by EA developers
- Price Action EAs are based entirely on price action and price patterns. These can be used on any time frame
- News Trading EAs are developed in MQL to profit from price movements around news releases
- Multi-currency EAs incorporate data from more than one currency pair to identify the most profitable opportunities
- Hedging EAs simultaneously open more than one position to profit from the relative changes in the prices of different currency pairs or other trading instruments
- Scalping EAs trade frequently to take advantage of short-term price extremes. These types of EAs are sometimes restricted by brokers
- Arbitrage EAs exploit price differences between liquidity providers, or prices on different exchanges
- Grid EAs build and unwind positions at predefined levels. Price levels are based on recent volatility and trading ranges. Some grid EAs incorporate hedging to remove market risk
- Breakout EAs enter positions when major support or resistance levels are breached
- Zone recovery EAs are used to reduce or limit losses when the market moves against a trade. Positions are opened in the opposite direction to offset losses with the aim of closing all trades without a loss
- Engulfing candle EAs are identify candles with a wider range than preceding candles. Trades are then triggered when the high or low of the candle is broken
- Support and Resistance EAs identify support and resistance levels on which to base trades. Usually trades will be opened at edge of the range and closed at the other
- Neural network EAs use machine learning to find patterns in the price behavior of currency pairs and other assets. These are often patterns that are difficult to identify without advanced algorithms and computing power
- Level trading EAs use levels based on models like market profile or pivot points to define entry and exit points
- Gap EAs identify price gaps that occur from one trading session tothe next. Gap EAs can be based on continuation or reversal patterns
If you want to automate your forex trading strategy, feel free to contact us. All you need is an idea and we can give you a time estimate and quote to turn it into a MT4 / MT5 Expert Advisor or MT4 / MT5 Custom Indicator!