As a newcomer to Forex trading, you’ll probably be intimidated by all the currency analyses methods being discussed online. They all have these complicated charts and graphs, and the computations can really be difficult to understand. Learning and mastering just a single method may take you weeks, and when you realize that there are dozens of methods and you have to choose from among them—it’s enough to force you to just give up in frustration.
But you can seek the help of expert advisors. And by expert advisors (EAs) I’m referring to computer programs that do the trading for you. An EA has been programmed to act according to whatever conditions it meets. Essentially, the EA does the analysis for you.
Like everything else, there are pros and cons to using EAs. So if you are considering using one, make sure you know what you’re getting into.
Pros of EAs
EAs are extremely popular these days. Even banks and stock trading companies use them for their trading activities. It stands to reason that they would also find a place in the Forex industry.
Here are some of its benefits:
- There are a lot of EAs available. This means you can pick and choose which one you like. Each EA has its own way of doing things, and you can pick one that resembles how you like to trade. For example, it can focus on a currency pair that you’re familiar with, or it can have the same aversion to risk as you do. By having a lot of choices, it’s more likely that you’ll find something ideal for your situation.
- You can test them out. The trading rules that govern how an EA operates can be tested. You can check out how it does when you look at how it would have performed in the past. Currency movements are recorded, and you can see how its decisions would have made you money had you used it several years ago.
For additional assurance, you can also check it out on a demo account. It’s like testing your own trading strategy, and you can see if the programming still holds up to current financial conditions.
- Most of the time, they’re not very expensive to use at all. You can just treat it like any other operating cost you have to shoulder in order to make a profit. Look at it this way—just how many hours of research will the use of an EA save you? And if you find research difficult, then it means you are going to be spared from headaches when you use an EA.
- They can also be very easy to use. Some EAs are the epitome of simplicity.
Cons of EAs
While EAs are popular, they do have some detractors. Here are some of the common objections against the use of EAs.
- EAs are still programs, and therefore subject to bugs. This is absolutely true, which is why you really need to make sure that your choice of EA is absolutely researched. As a computer user, you may have some experience about programs that crash or made a mistake, right? Now imagine what happens to your money when your EA crashes.
to make sure that other users have never experienced this sort of thing with a particular EA. Any EA you’re considering should come with precise instructions if ever any software problem comes up.
- Why aren’t the makers of these EAs super rich? This is always brought up, and such argument may have a point. That’s because some EAs are just scams sold by people who don’t really know much about Forex.
But then again, success in Forex trading isn’t really all about making millions. It’s all about making a steady living, and some EAs provide just enough profit each month while saving you from using up valuable time on endless research.
Regardless of whether or not you use expert advisors when trading, it is always a good idea to do some research on your own. These programs offer advice, but it is still your responsibility to decide whether you’ll take that advice or not. This is your money we’re talking about, so the decision should be yours and yours alone.
Having said that, there are definite advantages to using EAs. You can start slowly by simply using an EA for some of your trades, while you also do your manual trading. That way, you can then see for yourself whether or not EAs are beneficial to you.
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