How to Find Good Forex Expert Advisors - Tips
With increasing popularity Forex Expert Advisors have become a must have for traders. There are two ways in which to trade the foreign exchange, the first is manually, but this has become an outdated and old school way with the creation of specialized robots and software like Forex Expert Advisors. Some Forex traders are diehard believers that the only right way to trade is to trade manually. Traders with this mindset believe that by trading manually that this is the only way to learn every aspect of the vast foreign currency indications, dealings, and decisions. Although there is a vast amount of traders who are employing the aid of Forex expert advisors which may lead to the most probable Forex scenarios, price trends and much more with the least possibility for error.
Forex Expert Advisors are trading software that provide the user with automatic facilitation of Forex trading by dealing with the most frequent tasks of backend data testing, Forex data trend analysis, and also the provisions of trading signals and indicators that would suggest to the investor to go forth or hold the selling or buying of the given currency pair that is being traded. One of the most effective trading strategies has been founded by the use of Forex Expert Advisors. The use and integration of these advisors has worked perfectly within the parameters of MetaTrader 4. For individuals who are unaware, MetaTrader is the most commonly used trading platform for foreign exchange internationally. Traders who have combined the use of MetaTrader platform and expert advisors have seen great success and accuracy from this combination.
Among the most risky ventures that an investor can become involved in is stocks and foreign exchange trading. This is known to be true because of the simple fact that one can either hit a jackpot or be bankrupt in no time. Some studies have shown that the failure of investors can be caused from a different number of factors. Although there are several factors that come into play with the failure of an investor, the leading factor is the natural human tendencies that lead to poor analysis and decision making.
There is a common trend amongst newbie investors that lead them to become overly excited in trading that they fail to make use or identify the best strategy, and the failure to take the historical data and trend analysis into account. The developers of Forex Expert Advisors took this advantage of this opportunity and have created systems that reduce such risks by eliminating as much human error from the equation as possible.
We have to ask ourselves, what does a good forex trading system look like? What are the key elements to a forex robot that can return consistent profitable results? A solid forex system will have a success rate of 60% or higher and the system will have the ability to adjust stop losses and targets accordingly to hit it's profit targets. A good forex system should be built around just a few currencies rather than trying to cater to all major currencies. The reason being, each currency tends to have it's own predictable ranges and movement. It's almost impossible for a forex system to be able to cater to each currency, therefore the ones that stick to just a few tend to be the most successful.
A good forex system uses proper money management and never over leverages itself. Though it's good to find systems with a 60% success rate or higher, ultimately proper money management will allow you to maintain consistent returns even if you lose the majority of your trades. How is this possible? Using a risk to reward ration of 3:1 or better. Meaning, if you win 3x the amount you lose, than you can be wrong 40% of the time and still come out a profitable trader in the end.
I would like to answer some common questions about Forex EA systems for those of you that are interested in learning more about this currency forex system trading software.
1) What is expert adviser software?
Most EA software systems are written in MQ4 language and are automated robotic scripts that integrate with the popular Metatrader 4 platform and makes trades for you based on a complex set of mathematical algorithms.
2) What tools do I need in order to start trading with EA software?
All that is needed to begin trading currencies is a computer with a reliable Internet connection or virtual private server for remote trading. Minimal Forex knowledge is required to get everything configured and start trading.
3) What if I have a 9-5 job? Will the software work when I am away from my computer?
Yes, the software will run on auto-pilot 24 hours a day. If you don't have a lot of free time, it's not a problem. It monitors market conditions, places orders and closes positions for you. All you need to do when you wake up in the morning is make sure the Metatrader platform is running...and check your account history for those profitable trades.
4) What if I don't have any Forex trading experience?
EA software is an excellent software tool for the new or inexperienced trader, due to the fact that all you really have to do is install the software and follow the included instructions to ensure it is configured properly. Typically, I can download and install the Metatrader and expert adviser software packages, open a demo account, make a few configuration changes and start trading in under half an hour.
5) Do I need a lot of money to start Forex trading?
One of the main reasons most people new to Forex trading will like this type of software is the low cost of entry. You can start trading with as little as $50 USD depending on your broker terms. I would recommend training for a few months on a demo account until you are comfortable with the performance of the software and then start live trading with at least $500 - $1,000 USD so you can trade with decent share size.
6) What if my computer loses power or reboots?
Loss of computer power or a reboot isn't a problem either. All you have to do is start the Metatrader software, enable the EA and it will resume making trades. If you have a consistently poor Internet connection at home, you can pay a small monthly fee and run the application on a dedicated virtual private server to ensure constant up-time.
7) How can I trust a piece of software to make accurate trades?
Expert adviser software is a robot that watches market conditions that are based on specific trading strategies designed to maximize winning trades and minimize losing trades. Because the robot is not affected by human emotions such as greed, fear or lack of confidence it is much more accurate and consistent than an average Forex trader...and better than even most professional traders.