Free Expert Advisors

Wouldn’t it be wonderful if all your forex trades were based on expert advice from someone who could analyze all the charts, trends, news and more and tell you what would be the most profitable action? And wouldn’t it be almost too good to be true if this advisor didn’t charge you a penny for all this? What if I say that you can have such an advisor in your corner, except that it would be a virtual one? Still interested? You should be.

The MetaTrader 4 (MT4) platform contains programs that allow for the automation of trading and analytic processes, called Expert Advisors (EA). An EA is essentially software that has specifically been written for MetaTrader to help traders make informed trading decisions, and can also be programmed to automatically execute trades on your live account. This flexible and dynamic software can be programmed to take any information of your choice into account, provided it is available on MT4, to help you make trading decisions.

While there is a plethora of paid EAs available online, you can also choose from a variety of free expert advisors. But, do they really work? To assess this, you should know that there are different types of EAs.

Types of Expert Advisors

There are basically four types of EAs that you are likely to come across:

1. Hedge EA: Any EA that works across two respective and opposing positions, raising the chances of profit on one position, while reducing the risk of losses on the other.
2. Breakout EA: This one is designed specifically for opening a trade when a price breaks through predetermined support and resistance levels.
3. News EA: As the name suggests, this one uses different news events to capitalize on the large price moves that usually occur following such big news events.
4. EA Scalper: This one is aimed at securing small profits whenever they are available. It will open and close trades when it determines the potential for any profit, which means that it could even trade up to 500 times a day, based on the market conditions.

So, Do Expert Advisors Help?

Free or paid, all expert advisors are programmed to either execute trades for the trader and manage various aspects of the trading operation or to simply notify the trader of trading opportunities. Whether the EA is efficient and effective depends to a large extent on the developer of the software, which is why it is useful to do some basic research and comparison before choosing which one to use.

• A good EA can help you because:
  It can trade 24/7. Forex is one market that is open 24 hours a day. The problem is that most of us humans do need our sleep. This is where the EA can help, tracking price actions, market movements and any other parameters you might have determined across the different time zones, so that your time is freed up. The program will track technical indicators and make trades on your behalf, based on pre-set rules, while you can get your beauty sleep, go out on a date or simply spend some quality times with those you love.
• It isn’t prone to human emotions or human errors. EAs are designed to consistently track indicators and trading opportunities and execute trades when the predetermined rules of trading are met. They aren’t swayed by fear, greed, thrill-seeking, or any other of those emotions that tend to cloud human judgement. Similarly, they are susceptible to the miscalculations that humans sometimes make, which can then affect trading decisions.
• It can react faster to market movements. Even if you stare unblinkingly at a chart, you might still miss out on an opportunity if you aren’t able to identify an opportunity quickly enough and then react in time to make the most profit. The problem is that we humans take time to process information and then to assess the best way to react to the opportunity. Fortunately, EAs can identify opportunities almost immediately and execute trades without trying to second guess themselves and worrying about which strategy to use. Similarly, when it comes to cutting losses and leaving a position early, the decision can be made quickly and without all the hand-wringing.

While there might be plenty of other benefits of using expert advisors, it is also important to remember that they aren’t without their limitations. For one, you need a good computer and uninterrupted internet connectivity for the EA to do its job efficiently. On the other hand, EAs can be a bit human at times, given that errors do occur. This is why it is important to choose wisely. Lastly, remember that this is software that works on quantifiable data and might not be able to analyze fundamental data, such as political or economic events that could impact price movements.

So, while EAs can make life a lot easier, they do not completely free you of having to do some of the work yourself too!

Disclaimer

If you liked this educational article please consult our Risk Disclosure Notice before starting to trade. Trading leveraged products involves a high level of risk. You may lose more than your invested capital.