Forex trading is extremely versatile due to a variety of reasons such as the use of different Forex systems, forex strategies, and trading styles. There are many kinds of traders in the Forex market each with their own unique way of working. Some may choose to trade manually while others may prefer automated trading. The main goal of forex expert advisors (robots) is to facilitate online trading in the Forex market without the traders’ intervention. The Forex robot basically initiates and liquidates transactions without any kind of manual intervention from the trader.
Manual trading is a method by which a trader will analyze the market through and instruments he chooses to trade through their own efforts /resources and then manually execute trades through their trading platform. Automated Trading is the implementation of any forex trading system which will automatically execute trades based on a set of algorithmic or logical rules it applies to the information it scans. Of course, there is room in between these two spectrums for hybrid models which facilitates various degrees or elements of each methodology.
Basically, an expert advisor for MetaTrader 4 works by coding predetermined strategies or rules for making trade decisions. The rules are programmed on an expert advisor (robot), which it uses to enter and exit trades fully automated. Robots are capable of making trade decisions in a way that humans can’t. Robots can effectively scan the markets looking for trade opportunities with high levels of accuracy. For example, if you have a successful trading strategy that relies on indicators, candlestick patterns, support, and resistance levels, you can code it in a robot and just sit back and allow the algorithm to do the work for you.
There can be many pros and cons of using Forex robots and one must be aware of all those before using them. Forex robots can work continuously based on the instructions provided to them. Hence when used it can work for 24 hours a day without requiring you to be present physically. Forex trading robots can monitor many currency pairs at the same time which can be a little difficult otherwise. Trading robots are designed to analyze huge data that can help to make a decision when trading in foreign currencies. Trading robots identify the opportunities in Forex trading much faster and react according to the instructions set by the investors.
Most EA’s are fully automated system programmed to run as a trading robot, often unmindful of major market events and announcements. They have technical programming built in to generate trades based on the data in the MT4 chart. Since they are robots, if you run the EA on the wrong time setting or the wrong currency pair, you could receive false trades or errors. Also, often EA’s that work for a few months could eventually become out of date if there is a lack of human intervention to keep the EA current with market conditions.
