Pros and cons of expert advisors
EAs works 24 hours on daily basis:
We all know that a trader can not work 24 hours a day as he needs sound sleep on daily basis. Lack of sleep can affect their overall health and make them liable to face serious medical conditions, such as heart disease, high blood pressure, obesity, diabetes, and brain stroke as well. That is why trading 24 hours’ a day is impossible for traders. A trader can only watch Forex market during his waking hours, and the funniest thing is that his most the hours are consumed in day-to-day activities which are important in order to live a healthy life. But in doing so, trader hardly finds entry and exit opportunities offered by Forex market. If we talk about EA, it does not invest time in day-to-day activities, it can work the entire 24-hour in order to find the best trading opportunities.
EAs work without fear, greed, ego, and emotions.
It is normally seen that traders have a habit of hanging on when they are losing more in Forex market. Traders assume like hanging on for long hours will work for them as the market will move the way they want. At the time of losing money, fear, greed, ego, and emotions start rising in their mind. The worst thing is that anger keeps increasing with a loss. However, anger is a normal, natural human emotion. It is, in fact, one of the most basic of all human experiences especially in Forex trading.
Due to all such reactions trader open more orders in order to cover losses but actually, it’s a way of heading toward a huge loss. Whereas the robot is a programme based on a set of coded rules which are capable of carrying out a complex series of actions automatically without emotions. That is why robot trading is the only way to overcome aforesaid limitations.
EAs can trade and manager many currency pairs at the same time without a mistake:
There is no need to stick to a computer screen all the day because an EA has the power to monitor and trade multiple forex instruments at once and also has the power to do it more efficiently and proactively without any mistake. If we talk about human being, it’s not possible for him to trade and monitor dozens of currencies at the same time. Moreover, manual trading leads to several mistakes, such as selecting wrong lot size, closing an order by mistake and placing incorrect position sizes.
EAs enable us to maintain a balance between family and work.
When the EA trades, you can perform a lot of activities like you can spend time with friends & family members, travel, work on other important things as well. EA is very much useful for those who are doing a full-time job in an organization because most of the organizations do not allow their employees to do personal work along with a job. So trader hardly gets enough time each day in which he is able to perform a little self-analysis like what went wrong and what didn’t work and how the issue can be fixed.
We know that in Forex trading, strategy plays a very vital role to make money. Let’s understand what is a strategy, Forex trading strategy is a thoughtful process used by a forex trader to decide whether to sell or buy a currency pair at any given time. Forex trading strategies can be based on chart analysis, technical analysis, or fundamental, news-based events. EAs are designed using best working strategies so there is no need to spend time on technical analysis and fundamental analysis.
EAs are proactive and can react to trading opportunities much faster.
EAs help us to pick each and every trading opportunity much faster as compared to a human being because it’s not possible for a trader are to watch multiple charts closely and continuously. The EA uses the speed of the computer to monitor and to pick up multiple opportunities based on coded rules. Please note, If you are getting widespread during major economic events, in this case, even the best performing EA will not be profitable. In order to get the best results from the best EA, should select ECN/STP Forex Broker who is offering very low spread, low slippage, low execution time (<300 ms) and broker must allow scalping.
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EAs are good for New Traders who have very little knowledge about Forex trading.
There are a large number of free and commercial EAs that a trader can use on MetaTrader 4. So there is no need to become an expert trader and programmer. But wrong EAs can wipe out trading accounts in just a few minutes. So, to avoid losing hard-earned money, a trader needs to make a relevant decision before purchasing an expert advisor online. Before buying any EA, a trader should do a deep background verification of that vendor.
Suppose, if a seller is claiming that his automated trading system is very much proficient in making good profits, verify those claims on Google and don’t forget to check online reviews about the trading robot. In case vendor ’s you are not able to verify any information on third party websites or if you are feeling like the vendor is trying to hide something, then you must think it over before purchasing from your hard-earned money. Another way to protect from false claims is to connect with experienced traders over online forums who are already using.
The virtual private server is required:
EA can be interrupted when computer shutdowns due to power failure or due to some technical issues, apart from this, poorly performing internet connection also stop EAs to work. Due to aforesaid reasons, people prefer virtual private server which is particularly designed for businesses and individuals who need to operate their system remotely instead of carrying the systems around everywhere they go. So, there is no need to keep your eyes glued to the screen at all times. VPS is also very much useful for those who travel on daily basis or who work part time somewhere. However, a trader has to bear extra cost for VPS hosting in order to enable EA to work smoothly.
EA is best if a broker allows scalping, low spread and low execution time :
EAs are designed basically to work better where brokers offer scalping, low spread with low execution time. A trader should inquire about spread and scalping and execution time before opening a live account. If the broker is not providing aforesaid benefits then is it useless to purchase EA as it will only going to make losses.
Mostly EAs work on one pair:
Another disadvantage that most EAs are designed for one currency pair only, However, there are few EAs works on multi-pairs as well but trader has to spend huge money to buy that kind of EA.
EA can not reach fast on Economic events:
Most EAs do not work during important news and economic data this is because it is not possible for them. We know that market reacts too quickly as soon as data releases or when there are some important news flashes, but this sudden fluctuation can cause an EA to get stopped out, and/or enter too late. Therefore, most of the robot developers recommend traders to disable their Robot or EA on their system half an hour before the important economic event and again activate EA one hour after the major news and economic event to protect them from losses. Due to such recommendation, a trader has to remain proactive all the time because one single mistake can burn their hard-earned money.