Trusted Forex EA - What is it, How Does It Work And How To Use It?

The search for trusted Forex EA’s is a particularly hot topic on search engines, forums and websites. Recent advances in technology and programming have made the concept of automated trading (i.e. trading without human intervention) a reality. Unfortunately, like in every aspect of life, scammers dominate this niche trying to sell their wares through false advertising and misleading statements. To make life easy for everyone I will confirm and I swear under oath

“There is no Forex EA out there that will never lose a trade. Trust me, there never will be”

I am not trying to make you reject Forex EA’s for good but it is simply a warning sign that you should obey should you happen to find yourself on a sales page that claims “100% No Loss Forex Robot” or something along those lines, Leave It.

The fact of the matter is, that there ARE trusted Forex EA’s out there and are a very powerful ally that can do virtually all the work for you. The trick is to find the best Forex EA through diligent research and social proof. The ultimate measure of the best Forex EA’s are its ability to make you money on a consistent basis and not just a flash in the pan. A coalescent of these driving forces prompted me to write this Hub, which aims to answer questions that you may have such as

A coalescent of these driving forces prompted me to write this Hub, which aims to answer questions that you may have such as

What is a Forex EA?

How does a Forex EA work?

How to use a Forex EA?

A Forex EA also known in the industry as a Forex Robot, Forex Expert Advisor, MT-4 EA or even as an Automated Forex Trading Software is a piece of software that can essentially automate trading on the Forex Market with or without human intervention. That’s right, you can essentially sit back and let it do all the work for you.

This piece of software is written in a programming language called MQL-4 and works by plugging into your favourite Meta Trader 4 platform (This is the brokerage platform that you will use to trade online in the Foreign Exchange Market). Different Forex EA’s are programmed differently and have their own specialities and optimal conditions such as FAP Turbo which specialises in the EUR/GBP market and when the software code is plugged into your MT-4 platform, it enables it to investigate the market for you 24 hours a day, 5 days a week for the most lucrative opportunities as they present themselves. This is absolutely crucial because the Forex Market runs round the clock and you stand to miss many lucrative opportunities unless you are glued to your computer screens.

The two main reasons for the downfall of novice traders on the foreign exchange market are the lack of discipline and emotional trading decisions. Purchasing the best Forex EA to fully manage all aspects of a trade including entry, exits and even automatically adjusting trailing stops and stop losses can eliminate these two pitfalls. The beauty of the best Forex EA’s is that its strong attention to the details and superior discipline enable it to investigate multitudes of parameters and news events more than the human brain can even process. Now does that sound like a sound investment or what?

Unfortunately, all Forex EA’s are not made equal and you will find that some work better than others, which is why the ultimate test for the best Forex EA is the amount of money it can make for you.

Now that you know what essentially a Forex EA is, I bet you got some ideas in your head about the possibilities of having a Forex EA. The next section explains a bit more in detail about how Forex Expert Advisors actually work and some of the functions that take place within the source code every “tick”. A tick is generally a second in time. Could you execute a trade in a second? Don’t think so.

As I mentioned above, not all Forex EA’s are made equal. Although they are programmed using the same language i.e. MQL 4 to run on Meta Trader 4 platforms, the secret to the success of the best Forex EA’s lie in the source code which is programmed by the creators of the EA.

This source code enables the Forex EA to investigate conditions in the market and calculate indicators until a predetermined set of criteria arise. This will cause the EA to take action determined by the source code.

The open nature of the coding of most Forex EA’s also enable you to assign and create many functions and conditions such as implementing trailing stops or creating entry and exit points. The following example just illustrates in simple English a set of conditions or criteria that will cause a Forex EA to take action. Please note that I have simplified this in simple English but in reality this will present itself in many lines of code.

“Buy (go long) if the 9 day moving average convergence divergence (MACD) crosses above the 20 day MACD and the Relative Strength Index (RSI – measure of whether the market is overbought or over sold) is greater than 50”

If the condition that I have explained above has completely bamboozled you, please do more research on the Internet to get yourself up to speed on what MACD and RSI mean to the Foreign Exchange Market. If you do understand where I am coming from with the example, you will realize that a very good Forex EA could actually be your very own ATM.

Perhaps the best way of explaining how a Forex EA works is to know that you can essentially break down an Expert Advisor into three parts startupàmainàcleanup. A “tick” (moment when the price of a currency pair changes) triggers the EA to “startup”. It then moves into its “main” function. A highly simplified outline of the “main” function is as follows –

1) The Forex EA will check if you have enough funds in your account to open a trade. If so it will go to 2) if not, it will initiate the “cleanup” function.

2) It will check if there are currently any open trades.

3) If there are any open trades, the EA might check if these need to be closed or if they need to be adjusted (stop loss altered etc.) followed by initiating the “cleanup” function.

4) If there are no open trades at 2), the EA may consider opening a trade if the conditions are right followed by initiating the “cleanup” function.

I hope that this has enabled you to understand further the processes and functions that a Forex EA will go through triggered by a “tick”. I would like to stress that the Forex market is an extremely volatile which means that price action rises and falls by the fraction of a second, which is represented by a “tick”. It is impossible for any human to execute and manage trades with this much speed, precision and decision devoid of all emotions. Which is why a Forex robot can be set to be involved in a high frequency of trades that net small sums of money. Which in the end adds up to a substantial amount.

I know you are itching to find out how to actually use an Expert Advisor. Meta Trader 4 platforms are not very pleasing to the eye and I don’t think that I have helped the matter at all by talking about codes and functions. Setting up and using a Forex EA on a Meta Trader 4 platform is actually surprisingly easy. The next section will illustrate how easy it is for you to setup your Forex EA to make money for you.

Now that you have a clear understanding of what Forex EA’s are, how they work and the many advantages that they offer, perhaps it’s time to do your research on the internet and buy the best Forex EA to suit your needs.

Congratulations on buying your Forex EA (if you haven’t read on anyway), so how do you use it?

First things first, you will need to download a Meta Trader 4 Trading Platform. Now move the Forex EA program files (the one you bought off the Internet, nevermind if you haven’t already) into Meta Trader/Experts/, which is usually located in C:\Program Files\.

Once the above is complete, open up your Meta Trader 4 Platform and lo and behold you should see your downloaded Forex EA on the left hand side. Drag this icon into a currency chart that you would like for it to weave its magic in. You will then be greeted by a popup. Please replicate the same settings as the ones in the pictures to your right.

Click “ok” and you will receive a smiley face that will serve as confirmation that your new Forex EA is up and running and is already looking for the opportunity to make you some money.