EAs are known as forex expert Advisors. Some people often consider the trading bots as EAs. To be honest, the trading bots are more advanced than EAs and require less effort from the traders. You might be thinking that bots are the best to deal with the Forex market but in reality, it depends on your trading style.
EAs are specially designed tools that will do the analysis but the robots will do the analysis and do the trading. Some of the advanced traders don’t like the fact, the traders have executed atomically in the chart. They want to keep the final authority so that they can assess the state of the trend and sentiment of the market. The use of EAs becomes more beneficial when the world economy is facing great trouble and you need to consider the minor details including the sentiment of the market.
Those who are thinking that EAs are the best tools to trade the unstable market, are 100% correct. In this article, we are going to discuss some amazing methods by which you can use the EAs to find an unstable market. But things are not only limited to the identification of the market state, but it can also help you to find the perfect trade in the most complex situation. Let’s explore the details.
Price anomaly vs. EAs
The first thing which you need to do is analyze the importance of price anomaly. Usually, the professional traders use the manual method to find the historic price movement of the financial instrument. But this can be done using the EAs. Hundreds of EAs are there that can predict the price change and critical pattern to find the potential trading zone.
Some of the experienced traders often consider the unstable market as the best place to make a profit. So, how do they do so? They simply use the price anomaly and find the sweet trading spots.
Finding the sweet trading zone
When the market is exhibiting false movement, you have to be very careful. The pro traders offset the problem related to false spike by switching to a higher period. But if you use EAs that can smoothen the price change with a simple algorithm, you don’t have to use wide stop loss to protect the trades. In fact, the EAs will show the potential place where you should be placing the stops. Though it might sound a little bit confusing once you learn to use the EAs that have the ability to find the sweet trading zone by using the smooth algorithm, things will start to make sense.
Managing the running trades
You might have opened a trade in the most stable market condition. Due to the nature of the trading strategy, you have to wait for weeks before the trades get closed. During this time, chances are very high the market will become unstable and create massive headaches for the running trades.
To deal with such conditions, you can use the EAs that are capable of trailing the stops based on the market momentum. Usually, the EAs use the momentum index to trail the stops. It’s more like using the minor support and resistance level to ride the long term trend.
EAs to decode the news
Do you know what creates massive chaos in the market? In most cases, the news is the prime catalyst that alters the momentum and even results in a sudden trend change. If your EAs are designed to deal with the complicated price movement based on the news, you are going to have a great time at trading. Before the market begins to exhibit unstable traits, you will know why the particular asset is behaving in such an odd way. But using the EAs to decode the news requires manual labors.
The EAs will analyze the most critical news and create a short summary report that can affect the Forex majors or any specific asset. Based on the short summary, you have to evaluate your options to limit the risk at trading.
Using EAs like a pro trader
The pro traders never think the market is unstable. To them, an unstable market is more like a signal when they should be prepared for big movements. If you analyze the historic price data, it won’t take much time to realize why the pro traders consider the unstable market as a great trading opportunity. In technical terms, an unstable market refers to a choppy price movement with massive spikes.
To offset this problem, you can either choose a higher time frame or choose another stable market. Or else, you can take advantage of the modern EAs and turn the crisis into a great trading opportunity. And if you follow the tips mentioned in this article, it won’t take much time to master the art of trading in the unstable market.