In this article, I want to tell novice traders more about what an expert Advisor or trading robot is for automated trading in the Forex market and how they work. This topic I touched on a little in the introductory article on automatic Forex trading, but now let’s look at it in more detail.
So, let us remind you, a trading robot or an expert Advisor is an automatic trading system. In other words, it is a virtual robot trader that is programmed to trade on a specific trading strategy.
Everyone knows that in the Forex market you can get a good profit and gradually increase your capital only thanks to its proven trading strategy. If you have such a system, which brings a stable result, and trade it for a sufficient period of time (for example, 1-2 years), You can contact the programmer MQL (programming language, which is built into The MetaTrader terminal), which can make your manual profitable strategy already automatic profitable trading system, ie trading robot (or Advisor).
There are the following types of automatic advisers for trading on the Forex exchange:
- An independent trading robot is an expert Advisor that completely replaces the human trader, that is, performs all functions and operations without his participation for the desired period.
- Semi-automatic expert Advisor-a robot that tells the trader how to open a trade, which lot to choose, at what level to put a stop loss or take profit, in addition, may also ask permission to open a position. At the same time, the trader additionally analyzes the situation in the market and makes a decision whether to allow the EA to perform this operation or not.
- Helper scripts . For example, you need to set several positions at the same time. To set a separate position manually will not be convenient and difficult. To do this, you can use this automatic script, with which you can perform the above operation with one click. Another example: when receiving a signal in the market, you need to place stop loss and take profit orders at the right level for an open position, this script assistant can also help.
How do expert advisors work when trading Forex?
For clarity, let’s look at this situation. You have set a technical task for the programmer to create, according to the proven trading system, an automatic expert Advisor. After that, install this trading robot according to the instructions received on the trading terminal and turn it on.
Advisor, seeing the market situation that corresponds to the rules of Forex strategy for the transaction, submits an application to Your chosen broker. In turn, the broker approves this application (depending on which of course) and performs this operation. Some brokers can perform them automatically, and some may deliberately hold positions, do the so-called “requote”, ie, delay the application to perform the desired operation.
These operations can be of any type: from the request for the availability of funds to the opening, maintenance and closing of positions. This kind of operation, the trading robot can carry out every second, 24 hours and five days a week (since the Forex exchange on Saturday and Sunday does not work).
Accordingly, this automatic EA can perform operations on any currency pair, no matter how many currency instruments you have in the market. The robot analyzes every second for each currency pair according to the trading rules of the system (according to which it was created), and makes a decision whether it needs to carry out the current operation or not. All this he does automatically without the participation of the trader.
Finally, I want to add one remark, You must know (at least approximately) on what algorithm your automatic robot trades, on what strategy it trades, how it behaves in the market, what tactics money management uses, so that in real trading you do not have a panic, why the robot did so and not otherwise.
So, the theoretical part, what is a Forex trading robot and how they work, complete. I think this information will be enough to understand this topic, and in subsequent posts in this column will cover more practical issues and situations on the topic of automatic trading in the Forex market, as well as to test and optimize profitable trading advisors.