Expert Advisers (EA) is a piece of software which is written for investors to automatically execute their trades on the forex market. It is functional 24 hours a day and can take advantage of short term trading opportunities if the investors/ traders are unable to monitor the market whole day.
A search online will discover these are the benefits (or myths) of trading with an EA:
1. Profit Even If You Have Zero Knowledge About Investing/Trading
This is because the EA will decide when to buy and when to sell for you. It makes all the decisions for you. Unless you are very lucky to have bought a good EA in the first place out of ignorant, you can start to profit for a while. The challenge will come when the trader meets his first big loss, and how he manages it from there onwards .
To do well in trading comprises of 3 elements (describe in The 3 M's of Successful traders). Trading with an EA only equips a trader with a method of trading. The method may be successful for somebody but it does not necessary mean the same to you. It is because the method only provides you with 33% success in trading. Your mind and money management are the ingredients to be successful in trading.
Ironically, how would a person with little to no knowledge of investing, chooses a good EA from hundreds of them in the market? From our own research, we believe that you will need to know much more in order to identify profitable and consistent EA in the market.
2. No Emotions Required
EA provides the trading plan and execute the trades for you. This will probably leaves the trader on his own without any work to do. But as human beings, we will probably question:
If the EA is still working when it hasn't been placing any trade for the past 3 days?
Is the EA still suitable for trading when a single loss has wiped out all my winning trades for the week?
The EA seems to lose money trading certain time of the day can I switch it off during that time of the day?
First trade placed lost money and angered me because I paid so much for the EA. Is it a scam? I should refund and have my money back.
I believe you have now understood what I meant. It requires knowledge and the level of emotional intelligence to trade in the market. Otherwise, a trader with no knowledge does not stand on a firm foundation at making the above decisions. It requires experience and knowledge.
Increasing your emotional intelligence requires time and effort. It can be learnt by trading in a demo accounts. Using very low start-up capital for learning is highly beneficial to increasing your emotions trading the market. It is advised you only put risk free capital as school fees for learning purposes. Until you are comfortable losing 2% of your capital 10% of your capital, then should an investors consider trading with his own money for profits.
Handling emotions after an expected loss is highly crucial to your success in trading.
3. Replicate Exact Results Like That of Professional Traders
The above illustrations will provide you with clues of why your results even while trading the same systems will still defer from that of the system providers. Other reasons include:
Small difference in broker price feeds
Spreads in live conditions are different
EA can be extremely helpful in assisting investors/traders to trade the market. This is provided if you understand their limitations and their strengths.
FxEAreview uses EA to trade for them, and we believe that if you use them correctly, they are very beneficial to your equity accounts. We will examine in detail the pros and cons of trading with an EA.
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About the author:
Warren SeahWarren examines commercial trading systems and has since started researching and analysing systems to uncover good systems which bring in consistent profits.Click Here To Read More On Forex EAs Tradinghttp://www.FxEAReview.com |
