Expert advisor (EA)

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    Expert advisorAn expert advisor (EA) is a trading robot (bot) that will place trades within MetaTrader 4 automatically.

    The EA can be used for back-testing strategies automatically, without having to find the entry or exit points by manually scrolling through historical data.

    It can also be used to program strategies and automated trading. An EA is written as a script in a specific programming language and MetaTrader 4 provides an extra tool to do this.

    Different types

    Some EAs are relatively simple — their sole purpose is to notify you when a specific event occurs. For example, this could be two lines of an indicator crossing or a certain chart pattern forming. These are generally referred to as “manual expert advisors” because you are still executing the trade manually.

    More advanced EAs are able to completely automate the execution of a strategy, such as opening and closing trading positions, setting stop loss orders, taking profit orders, etc.

    The advantages are that the trading bot will trade the system according to the rules of your strategy. The bot will have no emotional influence and will not deviate from the system parameters. Another important factor of bots is that they can trade 24 hours a day without having to observe the chart.

    The disadvantage is that the bot will not recognise a change of conditions in the market and will carry on trading the system, even in adverse market conditions.