An EA is a wondrous thing. It can do much that a manual trader can’t do. And not just enter trades. Here are a few examples:
1) An EA can track dozens of pairs at one time.
If you have a successful trading strategy (manual or otherwise), an EA can be placed on all the pairs available at your broker and notify you of pairs that meet your trading rules and conditions, at which time you can determine whether you want to place an order to take advantage of the specified trading conditions. The EA will only notify you if the conditions are ALL met, saving you time.
2) An EA can track complex trade setups
If your trade setup requires 15 different indicators to align for your trade to be valid, an EA can check those indicators in a snap. And, again, it will only notify you if all the indicators are in alignment. Or you can have it notify you if only some of them are in alignment or if some of them are ALMOST in alignment, allowing you to make a discretionary trade. And, as I mentioned above, it can check for all these indicators on dozens of pairs at the same time.
3) An EA can allow you to get other work done while waiting for trade setups to occur.
I know I’m easily distracted. I trained myself for many years to “multitask” (as we all know, it’s not real multitasking – it’s more like moving on quickly to the next task when the current task has a lull in it.) When day trading on shorter term charts, you may have to watch the charts diligently for your trade setups. My mind moves on to other things while I’m waiting. I will find myself checking emails and various websites and return to discover my trade setup has come and gone. I’ve missed many a profitable setup for that reason. So I would write an EA to watch the charts for me and scream at me when it sees my trade setup – in case I lose focus. Even if it’s a discretionary setup where I can’t trust the computer to actually execute the trade, it allows me to look at the setup and make my own determination.
4) An EA can display trade-related information on the chart.
Many of the EAs I use display trade related information on the chart that I would otherwise have to calculate manually. It can display some of the information graphically, numerically or in some other way that makes it quick and easy to identify. It can display information gleaned from many sources including indicators, other pairs and even display news updates and schedules, taking a lot of the guesswork out of your strategy.
And the fifth thing an EA can do:
5) An EA can execute trades without emotion.
As we all know emotion is the trader’s worst enemy. Fear and greed can keep you from executing a trade at the proper price or cause you to enter a trade “before it gets away”. The best way to keep that from happening is to allow the emotionless computer handle your trade entries.
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