Let’s start with the obvious question: What the flip is a Forex Expert Advisor? Well, maybe you’ve heard them called Forex robots. They are automated trading programs. The term Forex Expert Advisor is usually connected with a specific Forex trading platform known as Metatrader and it’s current version is 4, hence the abbreviation MT4. Perhaps you’ve seen my prior Trader’s Tech articles on MT4 starting here. MT4 is arguably the most popular Forex trading platform anywhere.
So, if you want to use automation in your MT4 trading – and automation can be as complex as trade entry/management/exit or something as simple as just finding trade setups for you to execute and manage – you will need an Expert Advisor to do it.
What are the 4 ways a Forex expert advisor can make you a millionaire?
1) Monitor the Overall Market
Expert Advisors (EAs for short) will protect your trading account. Your trading account is your primary asset as a trader. Lose your trading account and you lose your ability to trade. EAs can monitor your account and react to market conditions that could be adverse to your account and either close or hedge your position or at the very least, notify you that your account is in danger. You should always use hard stop losses in your trading, but a hard stop loss can’t notify you if things are happening across all markets, allowing you to react before your hard stop losses are hit.
2) Easily Calculate Trade Risk
EAs will help calculate your potential risk in a trade. As I mentioned, your trading account is your primary asset and your first job as a trader is to protect your asset. The first question you should ask before putting on a new position is how much can I potentially lose if this position goes the wrong way. An expert advisor can perform all the calculations for you to determine the proper trade size to limit your risk on a trade.
3) Follow Rules Without Emotion
A great trader knows his trading rules are his next most important asset. Trading is based upon statistical analysis and the statistics only work if the rules are strictly followed, without emotion. Experts help you adhere to your trading rules and take emotions out of the equation. Computers (as we all well know) are emotionless beasts. They don’t care if you’re freaking out about a bad position or if you’re wanting to jump into any number of bad trades just because you’re elated from a string of good trades. They will stick to the rules to which they were programmed. They will only enter a trade when ALL the parameters are met and will never trade too little or too much.
4) Trade While You’re Sleeping
And lastly, how often do you look back at the charts in the morning and see one (or more) trade opportunities that passed you by while you were sleeping. Expert Advisors pick up trade opportunities that happen when you are away from your computer and living your life. EAs are on the job 24 hours a day, 5 1/2 days a week (roughly the time the Forex market is open) allowing you to actually have a life and not be tied to your computer whenever the market is open and still not miss any opportunities to take a position according to your rules. You’ll never make your goal of a million dollars (or Euros or Pounds or whatever) if you miss trade opportunities.
And those are the 4 ways a Forex expert advisor can make you a millionaire. Great trading and be careful out there!
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