One of the most impressive additions to a trader’s arsenal that MetaTrader 5 offers a GT247.com client, is the Expert Advisor functionality.
Algorithmic trading (automated trading, black-box trading or simply algo-trading) is the process of following a defined set of instructions (an algorithm) to place a trade in order to generate profits at a speed and frequency that is considered impossible for a human trader. In MetaTrader 5 this function is performed by Expert Advisors.
An Expert Advisor (EA) is a set/s of rules that are based on timing, price, quantity or any mathematical model. These could include, but is not limited to, indicators, price action and momentum. The different combinations are unlimited.
An Expert Advisor (EA) analyses price charts and trades automatically following underlying rule sets. Simple, isn’t it?
Our team, Piru and Odwa hosted a FREE webinar on Expert Advisors, If you had missed this session, you can now view it here:
Don’t miss a trade
Due to the fact that the EA places the trades and orders on behalf of a trader, one does not have to sit and stare at charts or price updates the whole day. If the defined event happens the trade is executed or the order is placed automatically.
Take the emotion out of it
With the EA following predetermined rules, that are defined by the trader upfront, human emotions are taken out of the equation, enabling traders to let their winners run and cut their losses more quickly.
See what would have happened in the past
Probably the most exciting feature, is the Strategy Tester. This feature allows a trader to see what would have happened in the past, with a specific set of rules applied to a specific instrument. Traders are able to optimise the rules and inputs to give the EA the best chance of making money in the future.
Plan your trade and trade your plan
Maintaining discipline is vital to being a successful trader. EA’s make this so much easier but still gives you the control.
Consistency is the only way to make consistent profits
If you were to ask a group of profitable traders what is their secret to success, chances are that you’ll hear the words “consistency” and “discipline” more than once. Unfortunately, achieving consistency and remaining disciplined is easier said than done. Working with EA’s, consistency and discipline is taken care of, following your rules to the “T” every time.
Faster is always better
Speed of execution is very important in trading, especially if you are trading more frequently. EA’s execute trades quicker than any human.
More instruments at once
Not only can you now let a “robot” watch an instrument for entry and exit levels, EA’s enable you to monitor multiple instruments at the same time.
Due to the fact that the EA runs on your desktop application, there is a risk that your EA will stop working should you experience loss of connectivity (due to internet problems, power outages, etc.). However, Virtual Hosting will alleviate this issue (https://www.mql5.com/en/vps)
Give up control
Since trades are automated, if the program runs in a way that you don't want it to, there is no way to reverse what has been done. Programs need to be tested thoroughly in order to avoid mistakes that might be made.
Keep one eye on it
Even though it all sounds magical, you can’t just set up your EA and forget about it. It is imperative that you keep your finger on the pulse. Markets aren’t perfect and neither are EA’s.
Historical results optimized
Don’t take historical “back-tested” results as the alpha and omega. These can be optimised and skewed to look better than they really are. Take the time to run your EA on a Demo account first and see how it really performs before loading it on your Real/Live account.
Expert Advisors range in price from $0 (Free) to $7500+ (the most expensive I’ve seen). Unfortunately, like most things in life, you get what you pay for, so don’t expect to find the “best” EA in the world under the Free section. That said, it does not mean that you won’t find successful EA’s at no cost. They are there, you just have to find them.
You can either buy an EA outright upfront or take the option to rent it for a set period of time. So, if you would prefer to find the right EA by trying various options first, you should find this option rather useful.
Another great feature that MT5 offers traders is to download a free Demo version of the EA. This allows you to see how the EA has performed historically – but be advised that some have limitations on the demo and that historical returns (especially optimised ones) do not reflect/guarantee future returns.
To find out more, check out: HOW TO TEST A TRADING ROBOT BEFORE BUYING
Downloading, Buying and Adding Expert Advisor to an instrument
This video by GT247 application support member Haana Lupiya details the process of adding an EA to an instrument.
If you can’t find what you are looking for, why not create your own. You don’t have to be a programming genius to create your own MT5 Expert Advisor. Thanks to the introduction of the MQL5 wizard, traders with little or no programming knowledge can create EA’s from scratch.
To find out more, please check out: CREATE YOUR OWN EXPERT ADVISOR IN MQL5 WIZARD