eToro – Our Favourite BrokerFree Demo Account

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

What Is a Forex Expert Advisor?

Updated April 20, 2022

Written by the WikiJob Team

All products and services featured are independently selected by WikiJob. When you register or purchase through links on this page, we may earn a commission.

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Becoming an expert forex trader takes years of knowledge, practice and experience. Knowing the market, spotting trends and reacting quickly to make trades at the right time is what separates the profit-makers from those that are losing money.

The very best traders have been in the business for many years, working through market changes to recognise the best time to make trades.

You can learn from these experienced traders if you are lucky enough to know one. But there is a more simple way to get access to knowledge, tactics and trading logic – using a forex expert advisor.

What Is an Expert Advisor?

An expert advisor (EA) is a piece of software that takes care of analysis and uses internal algorithms and technical indicators to notify you when a trade should be taking place – finding the best entry points for high-probability trades.

Created to help both experienced traders and complete beginners, most expert advisors will calculate the lowest price to enter a market and the highest price to sell, following a specific set of trade signals and user settings.

EAs provide users with fast data-processing and higher accuracy than even the most experienced human trader – allowing analysis day and night. There are always trades taking place across the world, and it would be impossible for a single user to monitor, analyse and act on market movements 24 hours a day.

Created in Meta Quotes Language (MQL) as code, the expert advisor is created to work on the MetaTrader 4/5 platform and, using a series of yes/no rules as parameters, it uses a complex mathematical model that creates sophisticated trading strategies.

These trading strategies have been perfected by the developers, and the best of them have been backtested – used alongside historical data to see how it performs when challenged with market movements – so you know that they will react quickly when necessary.

How Is an EA Different to a Forex Robot?

Although the terms are often used interchangeably, an expert advisor and a forex robot are different in one main way:

EAs don't actually trade for you; they just advise.

An expert advisor processes all the possible variables, alerting you to make trades. This gives you a measure of control – the opportunity to decide to make the trade, allowing you to learn more about the market and how it works, and have the final veto.

An expert advisor will notify you about the best trades to make but leave the final decision up to you.

Forex robots go beyond just giving advice. Following your preferred trading style and the parameters that you set regarding stops, limits and amounts, a forex robot will work continuously for you, placing trades no matter what the results.

What Do Expert Advisors Do?

Expert advisors can work to many types of trading strategy, to match your personal style. Many developers have created EAs that either contain different algorithms in one solution or multiple products that work on single strategies.

When you start using an EA it will depend on the developer as to how much input you need to have before launching. Some EAs are ready to go straight away – just push start. Others will need some guidance, with specific parameters chosen by the user beforehand.

The basic trading styles of EAs fall into five main categories. Although these can be found under different names, they are the basic algorithms that are used:

  • Hedge expert advisor – This EA opens two opposing positions, reducing the risk (but also reducing possible profit). It doesn’t need to analyse market conditions, it just needs to notify the user of the best time to sell in order to minimise losses.

  • News expert advisor – This type of EA works by monitoring financial news and reacts so that the user can take advantage of large price shifts.

  • Breakout expert advisor – The breakout EA carries out a constant technical analysis of market behaviour to identify when big movements are coming, placing the user in the best position to take advantage of that.

  • Scalper expert advisor – By placing lots of small trades, the scalper takes advantage of small movements in prices and sells when they are in profit. This is sometimes less risk to the main capital, but the profit margins tend to be smaller.

  • Adaptive expert advisor – Many EAs work in an agile, adaptive way. They can be set with different parameters and rules and this makes them able to react in different ways when the market does. So you can use the same program to make trades that focus on hedging, the news or grid/martingale.

Whichever type of EA you want to use, you can either build it yourself, if you have knowledge of MQL, or you can create one using MT4’s inbuilt wizard if you don’t want to invest the significant amount of time and effort it would take to learn a whole new coding language.

If you decide to download and install an EA that has been created by another developer, it is always a good idea to read user reviews and test the EA in action on a live account.

When you have chosen one, you can backtest it on MT4 using the Strategy Tester system, and try the EA in demo mode so that you can get used to the controls and make trades before risking your capital.

Reasons to Use an EA

Experienced traders use expert advisors – but so can inexperienced beginners. There are many reasons that forex traders look to EAs to help them in their trading:

1. Accessibility

EAs are easy to import and use – and if you are a coding whiz, you can make one to your exact specification.

Some EAs offer flexible ways to change the code, and therefore the trading parameters and strategy, without knowing MQL – with a few simple clicks, you can change the stop-loss limit, the number of trades you want to make or the acceptable slippage rate.

Even if you are not technically able to change the parameters, you can easily access the basic algorithm and make use of it, even without specialised knowledge of trading or coding.

2. Time

As mentioned before, it takes a long time to gain the knowledge and experience needed to become a profitable forex trader. Using an EA might not make you the most knowledgeable trader, but it will monitor the market for you in a way that most humans would struggle to do.

Because the automated expert advisor can run all day, every day, you will have more time to work, spend time with your family or, indeed, sleep without missing any opportunities. Timesaving is a popular feature of EAs and a big selling point.

3. Machine

Machine learning makes your EA a constantly updating piece of software. Most EAs use AI technology that learns as it trades and, with different neural networks available, it can learn much quicker than humans.

The other benefit to an EA being a machine is that the algorithm sees the trade in black and white. It takes the emotion out of the trade by reducing it to a simple yes/no decision, avoiding human recklessness or fear.

4. Flexibility

While forex expert advisors are usually used on forex markets, they are flexible enough to run on indices, cryptocurrencies or commodities too. The EA can be adjusted to react to price movement, economic announcements, current available balance and technical indicators – all using highly sophisticated algorithms.

Things to Consider Before Using an EA

When it comes to finding the right EA for you, there are some downsides to consider – you will be trusting your capital to it, after all.

  • They are not always experts – If you are looking at a product that claims to be better than a human trader, or one that promises a million-pound profit, then it is probably too good to be true. Treat finding the EA for you like you would any investment – look for unbiased reviews, check how they perform against other EAs and in a live market, and look for advice from established traders. Some EAs have been known to be scams, so you will need to do your due diligence before investing.

  • They are not human – While the lack of humanity in the software reduces the emotional factor, having little human interaction can mean that the software can not react quickly to changing circumstances and can not think creatively. This is a problem that can sometimes be dealt with through changing the code and the parameters of the software, but in the meantime, it can lead to failed trades.

  • Is your EA always connected? – Unfortunately, the EA can only run on the device it is downloaded to. This means that unless that device is constantly on and connected to not only the internet but also to the trading platform, the monitoring and trading signals are not going to be reliable and regular. Power outages and Wi-Fi connectivity issues can interrupt service. To improve your connectivity, you can download a Virtual Private Server (VPS) that allows you to have a version of your EA online, hosted on an external server so it can run around the clock.

Frequently Asked Questions

A forex expert advisor is a built-in computer software that tells you when to make trades. It will also tell you how much to put on a trade. The software can be tailored to fit your trading strategies and budget.

They make trades based on forex trading signals and market behavior. They are good tools for assisting individuals who may not feel confident with the trades that they want to invest in. They are also good for any cautious traders who need that extra bit of confidence to make a trade.

There are many expert advisors available. The best advisor for you will depend on how much you are looking to trade and the market you are trading in.

The advisor Learn2Trade is very popular and runs on FP market, Moneta Market and XM.

You will need a $1,000 deposit to run Learn2Trade, so it is for people who have these funds available.

If you are looking for something that does not require such a high financial threshold, the advisor Forex Gump only requires a $40 deposit. This advisor also runs on XM and FP markets.

Forex Gump also runs on NordFX and it also has a 2,200% potential yield on the shares it advises on. It is worth bearing in mind that Forex Gump is an advisor that is used for individuals who do not spend much on shares.

Forex expert advisors are legitimate, and they are used frequently to aid both professionals and amateur traders. They are computerized programs that are based on forex trading signals. This means that they may not fit with a trading strategy you have developed over time. However, it is good to have one available so you can measure your results against them.

It is possible to make good money from expert advisors, but you will need to invest a lot of money to do so and significant loses can be made.

Many expert advisors require a deposit to set up the trading program. You will also need to wait a long time for turnover depending on the forex trading signals. They are best used to supplement your income rather than dictate the largest share.

Many experienced traders run multiple forex expert advisors simultaneously to get the best out of more than one program. If you want to make a living from expert advisors, do not rely on just one.

You can build your own expert advisor with EA studio. First, you will need to set up an account. Once you have done this you must either choose from a forex strategy or generate your own.

From the chosen strategy, you can analyze the results and potential earnings. After you are happy with the generated results you can export the expert advisor and test it on a market. MetaTrader is software that will allow you to do this.

When you go to purchase an expert advisor, you will be met with claims that you can get rich from simply investing in one product.

The reality is quite different. Many traders do not see a turnover from their expert advisor until years down the line, and this is never guaranteed.

Your income is based only on as much as you are willing to invest as well. You are likely to make only a small percentage of what you invest, and traders have indeed made more money from devising their own strategies rather than relying upon an expert advisor.

Backtesting is where an expert advisor is used against the historical data to judge its performance against market signals and volatility.

You can backtest an expert advisor program through the software MetaTrader 4. On this platform, you can view a strategy tester. You can do this in real-time against the latest data and you can also run demos of the trades you wish to make.

1000Pip Builder is a great forex signal software you can invest in.

Their performance is based upon independent historical forex data and expert reviews across the internet. This means that the signals used by the 1000Pip Builder are both up to date and verified by other trading experts.

Forex.com is also another great option. This is a forex broker that includes forex indicators and signals in their advanced trading tools. You get access to all these things by just using the online market.

TradingView is a great platform for analyzing your trades and investments. It is an online social platform where traders can gather their results together and compare their investments.

This communal tool is great for backtesting because these comparisons act as historical trading data.

The forex screener tool gives you all the trading results between different major currencies. You can look at the changes in volatility, profit expectancy over different timeframes, and even the latest trading trends and signals.

Forex.com is a great start for beginners because it is integrated into a live market.

This means that you can test an expert advisor quickly against the live trading of a market platform. You will need $100 for the minimum of an account. You will also get access to good educational tools. Using Forex.com will enhance your knowledge and give you the confidence to devise your own forex trading strategy.

The set and forget strategy is one of the most popular strategies used by expert traders to get the best out of their expert advisors.

A trader will choose a timeframe to apply a trading strategy to. Once a certain trading target is hit or a certain financial threshold is reached, the trading strategy is then forgotten.

It is a great tool used for running demo strategies with low financial risk. There is a human element to this strategy as the trader is in control of the timeframe and the limits placed upon the expert advisor.

You can run this strategy on MetaTrader 4. Good expert advisors to go to are 1000Pip Climber and Fortnite forex. These are great for trying out the set and forget forex trading strategy.

You should look to run a forex expert advisor over a reasonable amount of time. Ultimately, the more trades you run it through, the more accurate the returns will be because of the collection of backtested data.

Expert advisors are best used long-term and therefore you should look to use them over a timeframe of months and even years.

If you have a trading strategy you want to utilize then it may not be worth using a forex expert advisor. However, you could optimize the use of them when you want to see the forecasted results of new strategies and on new trades that you would not usually put money on.

Open-source means that the source code of a software or a platform is made free. Users can modify the software to make it better over time as well.

This means that open-source software tends to be community-driven.

FreeExpertAdvisor has been an open-source forex trading strategy that has been running since 2015. It has been built to run specifically with MetaTrader 4, meaning that you can use it in the very same way that you can use other expert advisors that you would have to pay for.

A scalping expert advisor takes advantage of all the small changes to extract profit. It works mostly on small trading practices and it is good for low financial risk.

ForexGump is arguably the best expert advisor for forex scalping strategies. It only requires a deposit of $40 and has an incredible potential yield of 2,200%.

It is specifically used for small financial movements. Users who want to profit from scalping should invest in this expert advisor.

Final Thoughts

A simple search for expert advisors will show hundreds of options – and each has its own unique selling point. However, like anything related to markets, trading and money, there are inherent risks, and no system is foolproof.

It is always worth ensuring that you learn as much as you can about the expert advisor that you are thinking of acquiring. Find out what other users think, look for guides to the software from professional users and check the live performances.

Some EAs claim high returns; make sure that you backtest these and try them in a demo account so you know exactly how they work. Look out for EAs and robots that offer money-back guarantees that may not be substantiated.

If you find a reputable EA and use it according to your preferred strategy, it can make you money and save you time. Taking the emotion and effort out of watching the market 24 hours a day makes trading much easier and will give you the time to focus on other parts of your life without missing a trade.

Forex trading is inherently risky, so even with an excellent expert advisor in your arsenal, be sure you are trading responsibly and only trade what you can afford to lose.

WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.


Read This Next

You might also be interested in these other WikiJob articles:

Or explore the Trading / Forex sections.