How to make money in forex market using expert advisor
In this article, I want to share my point of view about how to make money in forex market. In order to make money in the most dynamic market - Forex Market - you have to pay attention to some very important questions. The points I will take a closer look are listed below:
- Is it possible to make profit using expert advisor?
- How to choose expert advisor?
- What strategy should I choose?
- How to choose forex broker?
- Advantages and disadvantages of using expert advisors
1) Is it possible to make profit using expert advisor?
Actually, this question is relative one, however, I will try to give you some tips which may help you to understand and increase your trading portfolio experience. Before to give you the tips I want to explain what is expert advisor. So, expert advisor(EA), also called forex robot, is software developed using mql4 or mql5 programming languages. The type of EAs can be fully automated or hybrid. Fully automated expert advisors work without any human interactions, however, hybrid systems may require you to manipulate some operations such as to open buy/sell trade or close it, therefore the robot will only open or close, this depends on the EA you use.
Let's get back to the main question. Making profit using expert advisor can be achieve for sure, this is my personal point of view. However, relying completely on forex robot is wrong. Because there is still no such expert advisor which will guarantee you 100% wins, therefore it is possible you to manipulate sometimes the trades if the market moves in one direction for very long time. So, before to start using any automated system, you have to accept the fact that there could have losses from time to time. It is not possible to predict the future, therefore you cannot guarantee to any robot to always win.
2) How to choose expert advisor?
In order to choose expert advisor, firstly you have to answer yourself do you want profit for short term or long term. After that you can go to choose correct one. After, you decide what term you want then you have to decide if you want to use fully automated or hybrid forex robot. I want to say here that even if you want to choose fully automated trading system, you may take some action in very bad market conditions.
Anyway. To choose successful EA you have to check the vendor if they are in the market for long time or newbie. Then, this is important, you have to ask the vendor proof of their robots REAL money performance. If they can provide you real money account performance attached in third part systems such as myfxbook or fxblue, this is a very big plus for this vendor. So, you can start analyzing this ea and put it in the list of your future robots.
When they provide you real money performance, it is time to check if the robot works with any broker and is compatible with any account types. Don't forget to check the robot if it supports 4 and 5 digits. Next step is to try to find out if the EA works good even if the spreads are a little high or if they have spread protection. As well, it is good to check slippage protection.
Another plus is if the owner of the EA provides money back guarantee, at least 30 days, but preferably 60 days. Then you can run it on DEMO and do backtest. Also, you can attach the robot in micro accounts with little amount of money where you can prove it to yourself that it will work even if the spreads are high. Such micro accounts may have drawbacks such as price quotes, slippage, spreads and etc..
It is good to think about currency pairs. If you prefer to trade on multiple currency pairs do not underestimate this and check the vendors EA for successful pairs. Don't think to optimize it by yourself. You may try but this may not get you good results. So, you are the person who will decide.
Last but not least, you may search for additional information in the Global Internet. It may help you learn more about the robot's trading style and success.
3) What strategy should I choose?
The most well-known strategies in the forex market are grid, trend following, scalper and martingale. I will give you short definition of the strategies and you may decide which one is better solution for you.
Grid system is EA which opens additional trades in given interval such as 20 or 30 pips(every developer may have different values) and the SL levels may be high values. Scalper system is EA which keeps the trades for short period of time and has SL levels which are small. The main idea is having small pips/profit in short period of time. Trend following system is one that looks for trending movement. And martingale is another EA which opens lots with higher amount after every loses. So, if your main trade is closed in loss with 0.1 lots then it will open second trade with 0.2 and this may go until you compensate or lose your account.
I like grid systems,even if they are dangerous. If you have high account balance and trade with low lots size this type of trading may help you earn money.
Choosing only forex robot will not finish your job. It is very important to choose broker which offers good trading conditions. Don't forget that this broker have to be reliable because they are capable of manipulating spreads and etc.. While choosing forex broker you have to pay attention if they offer tight spreads and instant execution. It is important to find out what slippage will have using their service. Before starting trading on any broker read carefully their specification because they may have commissions offered in different style. So, if the commissions are high then you may lose money even by opening and closing trades.
5) Advantages and disadvantages of using expert advisors
Advantages of expert advisors
- Some of the advantages of using fully automated expert advisor is that you will not need to stay in front of the PC 24 h per day because these system will open/close trades automatically. Having such system will release you to stay during the days in front of computer because it will work instead of you.
- Another plus using is that they are robots, so no feelings and tempting while opening and closing trades. Shortly, there is no emotions.
- This is not all, EAs are developed by developers who have been followed some patters and have tested them for long period of time(backtests). They try to get the most successful results based on backtests, this means with history data. All these backtests can be tuned and the expected can be determined.
- Opening of trade will be much precise if you rely on forex robot, for the simple matter that they have algorithms which fire at a pip that you may miss for some reason while
doing something else at home. As you think, human speed is much slower than robots.
- You can follow different strategies on multiple accounts. Computers are great tool for multitasking. They can execute trades in ms.
- Having discipline in human life is hard job, so people may lose consistency but the robot will not. They follow exact rules, but people may go beyond this rules, at the end we are human.
Disadvantages of expert advisors
- Disadvantages of these systems is that if your machine stop working, for example, if there is Internet connection. Such things may happen from time to time, so you have to think abuot it.
- Another disadvantage is that even if it works correctly you have to monitor it, you can't left it and come back after 1 week or 2. It is possible to have power outgage, compuer crashes and etc.. All this may have affect to your trades and closing or duplicating the trades or wrong orders.
If we want to use expert advisors we have to be careful while choosing one because having wrong strategy and EA may lead you to lose money. Before starting trading in forex market you have to organise, plan and analyze the market and available robots. Every trader may make money using EA, but you may have in mind that you may manipulate it in bad market conditions, so do not rely completely on forex robots. I personally can suggest you few EAs that you may check and they are WallStreet Forex Robot 2.0 Evolution, Forex Real Profit EA, Volatility Factor 2.0 Pro, Forex Earth Robot and Forex Robotron.
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