Ask any veteran trader and he or she will tell you that the best and quickest way to lose money trading Forex is to abandon your trading strategy and trade based on your emotions. The ability to remove human emotion from the Forex trading equation is really one of the biggest benefits of automated trading systems.

Many Forex trading novices believe they can overcome their emotions and trade manually only to find themselves losing money down the road. Automated trading systems allow traders the ability to let go and let the machine follow predetermined rules. This allows logic to rule and give traders the chance to test out their strategies without the intervention of human emotion. Forex trading using an automated system can be great for those who are: 1 still working out their place in the market, 2 who are looking to test a few strategies, and 3 those who often times find themselves overwhelmed with emotion during their trading ventures.

If you're looking to get your hands on your own customizable automated trading system, there are a few ways that you can go about doing so. If you have experience or background in computer programming, you can probably create one yourself using online tutorials available on YouTube or Vimeo. You can hire a professional programmer to create a system for you, or you can purchase a pre-made trading system. However, both of the latter options come along with their own set of challenges. How do you find a programmer who is reliable, or a trading system that can live up to the claims it makes?

They key is doing your research. Whether you borrow or create your own EA, it is imperative that you test it on plenty of historical and forward data. MT4 allows you to perform EA back-tests to see how they work in the past, and if the back-tests prove promising, one can test the EA in forward market conditions, preferably in non-expiring demo accounts until enough confidence and understanding of the EA is acquired to test it on real accounts.

Contrast this approach with borrowing or creating a manual system. The manual system would be very difficult to back-test properly other than the eyeball method that is itself besot with bias. Furthermore, the manual system would require the human trader to sit in front of the computer for countless hours looking for the trade setups and exit opportunities.

The EA, in contrast, frees up the trader to do other things. The trader does not need to be physically around, and so can be free to focus on his day job most day jobs are far more reliable methods of earning money than trading , hobbies and relationships. Also, that free time can be spent improving trading and coding skills. Trading with EAs is not in itself going to make you rich and more than you likely they will make you poor if you trade them in real accounts. That is an unfortunate fact.

An EA can reduce a large number of problems that beset human traders such as limitations of time and speed, greed, fear, ego, diligence, consistency to trading plan, etc. If the markets were not so terribly tough, we might all be able to find or develop a bunch of EAs to make us richer, but at the same time the trading world would be perhaps more dull, as there would be less challenge, less propensity to dream the impossible dream and fight the unbeatable foe.

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How to Trade Forex: Step-by-step Guide. How Technical Analysis Works. How Fundamental Analysis Works. How Support and Resistance Works. How Trend Analysis Works. How to Properly Manage Risk. How to Analyze Fundamentals. Best Time to Trade Forex. Why do Most Traders Lose Money in Forex. What are Forex Rebates. Introduction to Automated Trading. Forex Brokers. Top 5 FX Brokers With Customer's Reviews. Top US Regulated Forex Brokers. Financial and Forex Regulators.

Finding the Best Forex Broker: 7 Key Factors. Benefits of Micro and Nano Lot Brokers. Technical Indicators. Forex Basics. Training Videos. Some of them work with levels — above the line, below the line, take profit line. Once the levels are met, the program decides to sell, buy or cash in the profit.

This is the basic solution. Such scripts allow users to adjust their lots, to personalize the copy orders for selected symbols, to put in analysis from EA. They also send trading alerts. Therefore, you can adapt the coordinates as per your needs: trading time, levels, currencies, and let the platform work for you, without constant monitoring of the market.

Such programs, as explained, work better or worse depending on the algorithms included. Most of them are developed with the support of traders with more or less experience, hence the different results. Check EAs with 25 free EUR from Easy-Forex What to look for in an EA The EA performance relies, just like in manual trading, on speed and information. Simply put, they need to have fast connections to the markets, get the information quickly and act upon it.

The people behind the program are also key. They are responsible for updates and technological improvements. Use it rather as an assistant in your trading. Once you punch in your parameters, you actually design a trading strategy I need to buy at this level, sell at this one, execute that position at that point etc. With your strategy outlined, EA is able to follow it and help you stay on course, without emotions, without hunches.

You do need to monitor the markets and adjust your parameters. Forex is not a static market, with single pattern behavior. It is cyclical, so strategies need to adapt to new realities. So needs you EA. Just search for an EA creator that is compatible with MT brokers. Most of the programs feature the possibility to test your strategy.

Depending on results, you can then put several data: put a maximal quota that you can loose, manage the risk, put stops for selected criteria breakeven for instance , introduce combined factors.

And you should keep in mind that, of course, you have the possibility to automatically start or stop the EA once some parameters of your choice are met. If you want to build your own trading robot, you first need to have a MT4 platform, that uses MQL4 MetaQuotes Language 4 for code creation.

MT4 is quite popular and, therefore, has access to lots of data. As we said, you need to think of a trading strategy and once that determined, design you EA.

Check EAs with 25 free EUR from Easy-Forex Wizard creation You need to go to the MetaQuotes Language Editor in your EA program to reach the Creation Wizard.

Here you can add your parameters: name, type, value. You should know that you can delete any of the parameters you create.

An Automated Trading System ATS , it is a software that can create orders for you and automatically submit them to the market based on your pre-defined set of rules and trading strategy. It may also be known as algorithmic trading.

Automated trading systems can help you execute repetitive orders with greater speed and magnitude than you could do on your own. Automated Trading System ATS is often referred as an Expert Advisor — EA. In this article, we will discuss the pros and cons of the Automated Trading System EA.

If you want to learn more about the Automated Trading System and coding in MQL4, read our dedicated section MQL4 Beginner's Tutorial Syntax, Variables, Comments, Functions. Human traders have severe restraints on their time — they have to eat and sleep and go to the restroom, not to mention other responsibilities such as work, family, and friends.

It is next to impossible for a human to trade the entire hour currency market. He is often forced to trade during certain times of his waking day, but in doing so he is missing out on both entry and exit opportunities offered by other time sessions.

The EA does not sleep and rest and can work the entire hour currency shift searching for trading opportunities. When the EA trades, you can go have fun, work on other things, spend time with friends and family.

You are no longer a prisoner to the computer screen and charts. If you want to be more involved, you can spend your time researching for and coding new and improved ideas for your EA, and then back-testing and optimizing these ideas. Fear and greed are the biggest obstacles to successful trading.

Fear becomes an irrational force when it prevents the trader from taking necessary trades or hesitating too long, particularly after having suffered a losing trade, or it prevents a trader from closing out a bad trade with a loss.

Humans are also plagued with ego and bias, seeing what they want to see from the chart and indicators, looking for confirmation for their hunches, and unable to see things critically and objectively.

So long as there is real money at stake it is very difficult for a human to overcome these negative emotions and biases. EAs help combat emotions by getting you in and out of the market based on historically tested strategies.

The ability to back-test on quantifiable data is an epistemological paradigm shift in favor of the EA. Prior to that human traders either did not back-test their trading ideas or they attempted to do so in a very awkward fashion. Due to the time-consuming nature of such an activity, they often backtested only on higher time frame charts and preferred not to go back too far in time. Each change in the rule or parameter of the indicator would force a repeat process, making it exceedingly difficult to optimize.

With the built-in backtesting and optimization engines, EAs conduct these necessary and formerly incredible tasks in minutes.

To assist with back-testing, MetaTrader servers store a huge quantity of downloadable AND free historical data, in intraday format from till present, and daily or greater from till present. You do not need to worry about missing a trading opportunity because you are not staring at the right chart closely enough, or wasting precious seconds entering an order manually while the market moves away from you. The EA uses the speed of the computer to monitor the markets, seek and identify trading opportunities based on coded rules, and execute based on these rules in fractions of seconds.

With EAs, you do not need to start out being an expert trader and programmer. There are plenty of free and commercial EAs that you can run on your own computers. You have to properly back-test each one to see it matches your performance and risk criteria, and you should forward test each one on virtual money prior to trading live. You can then use the free time you now have because the EA is trading for you to learn more about forex, trading and programming so that you can develop your own EAs.

EAs gives you the potential to trade with complex systems that can include multiple conditions for their entries and exits, profit targets, protective stops, trailing stops, and filters, and have them all automated simultaneously. The human brain is very powerful but it cannot consciously multitask dozens of simultaneous operations like a robot can. Plenty of wise traders council on the importance of having a trading plan and sticking to it with utmost discipline. Most human traders have no trading plan or fail to stick to them.

The EA is designed to stick to the plan without exceptions. You no longer have to be glued to the screen, trying to keep track of each of your favorite currencies. An EA gives you the power to monitor dozens of currencies at once and do it more efficiently and effortlessly than before. A manual trader really has to work at being a good trader, doing his homework on the markets every day, watching the markets for an opportunity, carefully entering into a trade and then spending a good deal of time babysitting that trade.

This arduous process is repeated for every trade, day after day. It is a lot of work and is very stressful. The EA takes over these tasks effortless and reliability, and you feel a great weight lifted off your shoulders in terms of work and stress. An EA needs to run on a decent computer at home with reliable internet, or on an affordable Virtual Private Server VPS , 24 hrs a day, in order for it to behave properly and take all the trades it was designed to take.

Many commercial EAs are designed to work best on brokers with a tight spreads, particularly so if it is a scalping EA. If it is a scalping EA, you will have to investigate the spreads of your broker to see if they are low enough for the pairs your EA trades, in addition to asking your broker if it allows scalping. Most EAs are coded for one pair only, although some work on multi-pairs.

Most EAs are mathematically and technically based, and work best on trending markets, so they are vulnerable when the markets become sideways. When the markets enter into low pip range, sideways activity, EAs tends to get chopped up.

Manual intervention of the EA is not advisable: usually, the creator of the EA has a better understanding of its inner workings and has hopefully done all the appropriate back-testing and optimizations.

It is very difficult to get an EA to read and decipher fundamental data, such as economic and political events. Hopefully, the result of the event is impeded in the price action, and then the EA can read it. It is difficult for any EA strategy developer to plan and design a robust EA as there are few very good examples or design methodologies of such. Most do not have a proper method and criteria, and there are numerous coding and optimization pitfalls, such as over-optimization and curve-fitting.

The EA has a number of potential edge factors over a manual trader, without all the emotional and physical limitations of a human, and yet in the end, the markets are so exceedingly difficult most EAs cannot win against it.

It helps if the EA developer is both an excellent coder and an experienced trader with the humility to feel one knows hardly anything at all about both. This is a hard juggle. Too often one finds excellent coders who have little experience in trading, or experienced traders who cannot code.

Even when finds a combination of both, the experienced trader who can code well, there is still the ego factor to deal with. Pride and ego, while good motivators for craftsmanship, are dead-end allies to learning and growth. Metatrader 4 MT4 is such a popular platform that you spend a lifetime investigating and researching sharing and purchasing thousands of EAs in numerous online forums.

And there is an endless supply of education out there to code your own EA. Whether you borrow or create your own EA, it is imperative that you test it on plenty of historical and forward data.

MT4 allows you to perform EA back-tests to see how they work in the past, and if the back-tests prove promising, one can test the EA in forward market conditions, preferably in non-expiring demo accounts until enough confidence and understanding of the EA is acquired to test it on real accounts. Contrast this approach with borrowing or creating a manual system. The manual system would be very difficult to back-test properly other than the eyeball method that is itself besot with bias.

Furthermore, the manual system would require the human trader to sit in front of the computer for countless hours looking for the trade setups and exit opportunities.

The EA, in contrast, frees up the trader to do other things. The trader does not need to be physically around, and so can be free to focus on his day job most day jobs are far more reliable methods of earning money than trading , hobbies and relationships.

Also, that free time can be spent improving trading and coding skills. Trading with EAs is not in itself going to make you rich and more than you likely they will make you poor if you trade them in real accounts.

That is an unfortunate fact. An EA can reduce a large number of problems that beset human traders such as limitations of time and speed, greed, fear, ego, diligence, consistency to trading plan, etc. If the markets were not so terribly tough, we might all be able to find or develop a bunch of EAs to make us richer, but at the same time the trading world would be perhaps more dull, as there would be less challenge, less propensity to dream the impossible dream and fight the unbeatable foe.

Share the following link to refer others to this page using our affiliate referral program. CONTINUE TO SITE. Share this page! Academy Home. Learn Forex. What is Forex and How to Trade it - Best Beginner's Guide.

How to Trade Forex: Step-by-step Guide. How Technical Analysis Works. How Fundamental Analysis Works. How Support and Resistance Works. How Trend Analysis Works. How to Properly Manage Risk. How to Analyze Fundamentals. Best Time to Trade Forex. Why do Most Traders Lose Money in Forex. What are Forex Rebates.

Introduction to Automated Trading. Forex Brokers. Top 5 FX Brokers With Customer's Reviews. Top US Regulated Forex Brokers. Financial and Forex Regulators. Finding the Best Forex Broker: 7 Key Factors.

Benefits of Micro and Nano Lot Brokers. Technical Indicators. Forex Basics. Training Videos. What is Automated Forex Trading.

If a forex robot seller offers a day guarantee policy, it shows that they are confident enough to sell you a product that will actually perform as they say. The most unique feature of this forex robot is the built-in money management tool which automatically calculates the risk per trade on your behalf. Forex programs and scripts Now, as explained, many brokers offer the Forex automated system MT4, some better than others. Pride and ego, while good motivators for craftsmanship, are dead-end allies to learning and growth. Partner Links. The so-called glitches of the system are not uncommon. In fast-moving markets, this instantaneous order entry can mean the difference between a small loss and a catastrophic loss in the event the trade moves against the trader.

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