We know that foreign exchange EA can be developed on the MT4 platform, and the language used is MQ4 language. A set of EA is a complete trading program. The program obtains the market price in real time, automatically judges the timing of order placement and closing, and the computer simulates the trader’s order operation for machine trading, and executes the transaction according to the pre-edited trading strategy program Order. The advantages of programmatic trading are incomparable to human judgments. From the stability of investment returns, the average loss probability of long-term trading, decision-making judgment mode, risk management, execution ability, etc., the programmatic trading is far ahead
Forex EA is different from physical goods, it is a kind of virtual goods and is risky. Since the future market is unpredictable, EA may bring losses and may also bring profits. If you choose a potential EA, investors may get huge profits, far exceeding the value of the foreign exchange EA itself, but it will also be accompanied by risks. Therefore, choosing a foreign exchange EA is actually a high-risk and high-return investment.
So, what are the advantages and disadvantages of foreign exchange EA trading?
Advantages of foreign exchange EA trading:
- Integrate the trading essence of the profitable system and use verified trading strategies for real trading
- Overcome weaknesses in human nature and avoid emotional manipulation
- Place orders automatically, automatically adapt to price changes and trend changes
- The computer monitors the market 24 hours a day, no human operation is required, you can work in the daytime with peace of mind
- Strict risk management, no excessive trading
Disadvantages of Forex EA:
- Whether an EA can make a profit depends entirely on the level of the writer, and there is no guarantee that every instruction will be profitable, and if the level of the writer is poor, the loss will be a lot.
- There are many EAs on the market, but some of the EAs are very beautiful, but the real offers are not good. The reasons are as follows:
2.1 The review time is too short
There are many EAs in this market, but there are few EAs that can run for 10 or 15 years, and the funding curve is still rising steadily. Many EAs are made based on the completed market, such as the Euro in 2008, which was a unilateral If you use a unilateral EA to do this, it will definitely be good, but once such an EA is placed in a shock market, it will be very different.
What a really good EA needs to adapt to is not a period of time, but a lot of different markets. But often many EAs can’t be written so perfect, so it needs constant adjustment by technicians. Many people will buy the cracked version of EA without the support of a technician, and they don’t know how to use it, thinking that they will automatically make money as soon as they hang up. As a result, a big market will come, either half-dead or bursting. In fact, even the perfect EA (there is no 100% perfect EA on the market) also requires constant adjustment by technicians, because the market will constantly change its nature.
2.2 Low fault tolerance
Even an EA that can run for 10 years may not be able to make money if it is put on a firm offer. Because the resumptions are performed under the condition that there is no accident in the network environment and the liquidity is completely unaffected by your transaction, and in the actual transaction process, EA is easily affected by network problems, liquidity factors, server delays, etc. affected.
Especially liquidity issues. When the foreign exchange market changes drastically, the price changes will often be very short in a short time. If the market order is executed, slippage will occur, and the non-market order will cause the order to be placed or cannot be closed. Positions, resulting in losses.
2.3 Insufficient stability
Some EA strategies have poor stability, how to understand?
Many EAs who are desperately doubling their positions tend to have good luck, and may make a lot of profits in a year, and the recovery curve is also very beautiful, but the final 99.99% is the tragedy of liquidation.
There are also many trending EAs, which have been strong for two or three years and still stand tall, but the process is terrible. For a simple example, an account of 10,000 US dollars may make as much as 50% in a year, but among them In a month, the biggest floating loss may have lost 7000 US dollars, but it was lucky to meet a wave of big market and make it back.
What should I pay attention to when using Forex EA?
Regardless of whether it is the foreign exchange or stock market, the psychology of traders is an important factor affecting the market, and this factor cannot be quantified; “Buy low and sell high” is a slang we often mention in the course of trading. There are big differences; in addition, the experience of mature traders is also very important.
EA can’t play a role in all market conditions. Sometimes the market is volatile and sometimes trending is obvious. You need to adjust the EA settings according to different types of markets, so as to ensure its function.
There are many glitches or “noises” in the price during operation, and these factors will be adopted by the computer as effective signals. At the same time, once the direction of the market changes, the computer does not make changes in real time, but continues to execute according to the original instructions. The loss is also very huge.
Any EA that is not managed will cause losses. In short, no EA is suitable for all market conditions.
Therefore, many traders do not directly use automated “EA” in the trading process, but choose semi-automatic settings, adding a manual screening mechanism. With the addition of a stable and mature trader’s screening mechanism, the probability of automatically adding positions to losses due to changes in the trend is greatly reduced.