EAs are very popular among the novice traders. It is often known as “Expert Advisors” or robots that automate the trading system. Since the Forex market is open 24 hours a day, it becomes impossible for the human brain to constantly monitor the price movement of the financial instrument. As a result, we often miss the golden trade setups. But what if we say, you don’t have to miss the golden trade setup anymore? Some of you might say, the automated trading system doesn’t work since it fails to understand the sentiment of the market. This a very true statement but if you manage to incorporate the EAs with a manual trading strategy, you can greatly improve the profit factors.
Advantage of a manual trading strategy
When the traders analyze the raw price movement and execute the trade based on real-time market dynamics, they assess the fundamental factors of the market. By blending technical and fundamental data, they to assess the market sentiment.
To be precise, the manual trading strategy allows the retail traders to execute the orders based on three major forms of market analysis. Most importantly, you get the unique chance to scale the lot based on your confidence level for a certain trade setup.
Advantage of EAs
EAs are nothing but bunching programming written in MQL language. Based on the coding the EAs execute orders in the MT4 platform and makes the trading process automatic. But do you EAs can also be used as an analytical tool? You might think the expert advisors can analyze the basic functionalities like moving average crossover, testing critical levels, etc. Depending on your program, you can process big data and find a suitable trade setup without looking at your trading chart.
Why you should use EAs with manual strategy
Some of you might think EAs are the best solution to make a consistent profit. If this was so easy, no one would have learned different trading strategies. Though EAs can work without any emotional attachment it also fails to understand the major news. No matter how sophisticated the MQL programming is, the robot is not going to understand the sentiment of the market. So, why EAs are still popular?
The professional traders use the EAs as a signal generator. For instance, you might program an EA to send you an email notification when the 100 periods SMA cross the 200 period SMA in the 30 minute time frame. With this simple EA, you can automate a part of your trading strategy. You don’t have to manually look for the bearish or bullish crossover to execute the trade. Once you get the email notifications, analyze the price chart and execute the orders with managed risk.
Due to the recent advancement in technology, EAs has become more sophisticated and it can handle much more complex data. For instance, you can program the EAs to find the potential price action signals at the specific price levels. Being a price action trader, it will be a great help since the robot will focus on precise calculations.
Let’s say, you prefer to trade with a combination candlestick pattern. Being a human being, it’s very normal to make mistakes while dealing with the lower period. But if you develop the EAs for predicting the potential price action signals based on the opening and closing price of the candle, you don’t have any room to make a mistake. The EAs will do the basic analysis and you are the one who will verify the signals. If you feel satisfied with the market conditions and EAs signals, you can execute the trade and make a decent profit.
Limit the risk factors
You can stick to the manual trading strategy and use the EAs to limit the risk factors. But if you use a simple EAs program to limit the lot size based on equity, you can greatly reduce the risk. With some minor tweaks of the EAs, you can also set the maximum loss. Let’s say you have executed long orders with standard 0.1 lot in the AUDUSD pair. Sadly the market dropped more than 200 pips. So, you are most likely to lose $200. But if EAs are programmed to close a certain trade when the loss exceeds $50, you don’t have to lose more than that. Regardless of the market movement, the maximum amount of money that you can lose from a single trade would be $50.
You need to act smart to make consistent profit from this market. By blending EAs and manual trading strategy, you can easily become a professional trader. You don’t have to think about emotional attachment since you can code the EAs to take care of the emotional traders. For instance, you can also limit the maximum number of orders you can execute per hour or day. In a sense, EAs are blessings for the traders. But make sure you use it with the manual trading strategy. Once you learn its use properly, you can easily become a profitable trader.