Many forex systems are sold online as mechanical automated trading systems, or in Metatrader language called Expert Advisors. Expert advisors are programmed mechanical forex systems designed to work on certain trading platforms, called Metatrader platforms. The Russian designed trading platform is now the most popular trading software among brokers and traders.
An EA could be as simple as a technical indicator (a small software which shows market conditions, up, down, trends, etc ..), or could be a programmed program based on complicated mathematical and statistical algorithms and several other pre-designed indicators . The expert advisor, as its name indicates, gives advice to the trader as when to buy, sell or close a position and usually it will also tell the trader what size of trade to take. Also, the EA has the functionality and power, if authorized, to automatically place trading orders, or cancel them, buy, sell, and close forex positions!
1. Market Entry
All expert advisors should advise the trader when to enter or leave the market. It can also place orders at market or at another price automatically. The Expert advisor should collect the relevant information from previous historical chart data, and base the decision on that information. The level of information to be collected depends very much on the parameters which should be entered manually by the trader.
2. Order direction
The EA will also decide, along the market entry, the direction of trade, either buy or sell.
3. Money Management
If required, the EA can also apply money management to your trades. A good expert advisor should know how much to buy or sell, by applying known money management techniques. Some expert advisor would simply change the size of order according to the equity. Some would use a more complicated algorithm. Some do not apply any money management rules.
4. Stop Losses and Take Profit
Expert advisers also have the ability to place, change, or remove stop losses and take profits orders.
5. Trailing stops
There is nothing better than expert advisor to monitor your open positions and use trailing stops. The EA is there 24 hours monitoring your trades and ready to execute anything relevant to what was programmed to do.
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