In case you do not already know an Expert Advisor (EA), as it is called, is a trading robot (a software program) that automatically opens and closes your transaction. Forex Expert Advisors allow you to make the trading process completely automatic, all you need to do is install it and do not close the trading terminal. Obviously, you should be having an internet connection.
We do not recommend that you get involved in messing with the EA options, as the EA trades and operates without your help. For you the most important thing is the choice of an expert adviser. We must say that expert advisers have recently become extremely popular. There are paid robots, free ones, EAs focusing on one pair or on many pairs and so on. But, despite the huge variety of Forex advisors, it is difficult to find a really outstanding one that will make profits. In this article we want to explain you how to find a profitable EA. Apart from that, we will also cover what you need to know regarding EAs and what criteria you should follow when looking for one.
The first question that you should ask yourself is how much profit you wish the EA to make. It seems simple, but each Expert Advisor has its own concept of profits. For instance, EAs are aiming to make 100$ a week and other 1000$. It is important to remember one thing, the higher the potential profit, the higher the potential risk. This means you are more likely to lose all your money with the robot which will aim to make 1000$ a week, than with the robot which is making 100$ a week. The risk you are willing to take will be the main factor in choosing a forex expert adviser.
Once you have determined what risks you are willing to take, you will then need to narrow the search for an advisor that will best fit your trading style. To do this you will need to know the following factors: maximum drawdown, profit expectations and efficiency. To find a good Expert Advisor, you have to spend a lot of time and effort and most likely even money. It is also important to understand that most robots are effective only in certain market conditions. What does that mean? Some will be profitable only if the market is in a trend, while others, may be more effective during different conditions. You need to know what are the EA preferences and use it only when there are favorable market conditions. Thus, you can save a significant part of the profit, which was earned by the EA.
Most sellers of EAs show you only the back test results, which means that they tested it only in the chart history. This is bad and should alert you in the first place that it is very easy to adjust the robot according to past historical charts. In essence, in the history the EA may show great results, while in fact does not even bring a dime. Secondly, the past is not an indicator of the future, so the seller has to show the results of the back test on a real trade. Of course, in the beginning it will be a good idea to try the EA on a micro account and see if it is profitable, and only then to decide whether to put it on your normal account.