Investing > What is a Forex Expert Advisor?

What is a Forex Expert Advisor?

Forex expert advisors can alert you to market changes. Learn whether they’re right for your forex strategy. 

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Reviewed by
Updated January 10, 2022

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

Do you ever wish your forex trading could run on autopilot? 

It’s natural to wish we could get more reward for less work. Forex trading may be fun, but it’s also time-consuming—you have to keep up on world news and events, watch the charts, and figure out how to monitor currencies in a global market that never really shuts down. ⏳

When there’s an app for everything from grocery shopping to dog walking, shouldn’t there be one for forex, too? ✅

Forex expert advisors are software applications that can tell you when to make trades—or even take the wheel and make the trades for you. This can keep you trading forex even when you’re sitting by the pool or grilling hot dogs (apparently it’s the fourth of July in this analogy). But can a software program really trade forex as well as you can? 

It’s important to make smart decisions about your approach to forex trading. In a time when technology is changing forex trading by creating an accessible, competitive trading landscape, we must make informed choices about which technological innovations actually help us make more money. This guide will help you understand how forex expert advisors work, how to use them, pros and cons, and how to find a good one if you decide to go that route. 

Ready? Let’s jump in!

What you’ll learn
  • How a Forex Expert Advisor Works
  • Types of Expert Advisors
  • How to Use a Forex Expert Advisor
  • Before Using an Expert Advisor
  • Pros and Cons Compared
  • Using Multiple Advisors Simultaneously
  • Expert Advisor and Broker Compatibility
  • Are Forex Expert Advisors Worth It?
  • Choosing the Right Advisor
  • Forex Expert Advisors vs. Forex Robots
  • Conclusion
  • Get Started with a Forex Broker

How a Forex Expert Advisor Works 🏗

Expert advisors, also known as EAs, are used by some professional forex traders. An expert advisor is a piece of software that can be adapted by the user to follow certain trading parameters. Know your favorite strategies to trade forex? The EA can help you follow them. 

Expert advisors can notify you when certain things occur that make it an opportune time for you to open or close a trade. Say you wanted to wait to open a certain position until the dollar index steadies – the expert advisor could notify you that that’s happened, and some can even open the position for you while you sip on strawberry daiquiris. 

Forex expert advisors can search for trends and breakouts, and use technical indicators to make decisions (like the moving average indicator). It analyzes the market constantly to find trading opportunities. 

Many expert advisors are designed to work with the leading forex trading apps, and many are created in MetaQuotes Language to work on the MetaTrader 4 and 5 platforms. Pricing on forex EAs can vary significantly: depending on how much customization you want to do, they could cost as little as $100, or well into the thousands. There are expert advisors that you can try out at a very low cost to see whether you like the process, and even some that charge a monthly fee. 

Types of Expert Advisors 👩‍🏫

There are many expert advisors on the market that are geared toward different trading strategies. This is just one of the ways that technology is making forex more appealing.

  • News Expert Advisors. These EAs will analyze financial news and identify strategic trades based on the changes that happen in their wake. This way, you don’t have to watch the news of Nigeria’s currency devaluation on the black market to know its value will drop – the EA will give you a heads up.
  • Scalper Expert Advisors. If you are a seasoned forex scalper looking for a robot assistant, some of these helpful algos can automatically buy and sell for you at profitable times.
  • Hedge Expert Advisors. These EAs will open opposing positions, which minimizes your risks and your profits. The EA will let you know the best time to sell to cut your losses. Make sure you understand the do’s and don’ts of hedging forex before you go down this road, even with your expert pal.
  • Breakout Expert Advisors. These EAs will do a constant technical analysis of the market, and let you know when they think big changes are coming.
  • Adaptive Expert Advisors. As the name states, these bots can be set to react in different ways to different moments in the market. It’s like a customizable hybrid of the above options. 

How to Use a Forex Expert Advisor 🔎

If you know MQL, congratulations – you can build your very own forex expert advisor! If not, you can use one of the built-in wizards to help you figure out how to make your own little forex expert that will make trades based on your strategic approach to forex. 

No matter what type of expert advisor you choose, its goal is to automate your forex trading and make you money. The EA is able to analyze a wide range of data simultaneously, which gives it its advantage. Not sure how the dollar responded to the Fed’s discussion of tightening monetary policy? Don’t worry – the robot knows. 🤖

If you want, you can work with multiple expert advisors that serve multiple purposes – but note that not all EAs can work together on the same terminal. Make sure you read reviews and run tests before committing to an expert advisor.

What to Keep in Mind Before Using an Expert Advisor 💡

There are a few things you’ll need to understand before you plunge into the waters of using a forex expert advisor. It’s not just plug and play – you need to put in some legwork to make sure your expert advisor is going to work properly. After all, fintech impacts the forex market when it works well – not when it gets buggy and crashes. 

Check Your Data ✔️

Your expert advisor is only as good as the data it’s analyzing. Your backtesting results might not mean that your system is ready to go – if it’s being given poor data, it’s going to give you shaky results. Make sure you read the instructions on how to prepare the data that your expert advisor needs.

Check Your Execution Speed ✔️

Some expert advisors will time out your session after a certain amount of time – it could even be as short as 30 seconds. This would require you to log in to the system again. Even with the top forex brokers, this could cost you a few seconds, which is precious time in high-volume trading. 

Debug! ✔️

If you’ve written your own code, you need to spend time debugging it. Debuggers are not available to individual traders as a tool, so you’re going to need to spend the time yourself. 

Test Your Connection ✔️

Your expert advisor is run when you connect the platform directly to your broker. You don’t want to realize at the last minute that your expert advisor has been disconnected, so you’ve missed the moment to buy something like Automated Systems Holdings Limited right before they go ex-dividend (not that we recommend that strategy).

Advantages of Using a Forex Expert Advisor ✅

There’s a whole lot to keep up with in forex. The market is open 24 hours a day, seven days a week. You have to keep up with economic and political news for nations across the globe. Then there are new forms of securities, which are giving brokers who accept crypto an advantage. It’s a lot to keep up with. An expert advisor can analyze all of this while you’re working, sleeping, or taking a break. 

Portrait of a smiling black businessman with laptop at cafe
Forex expert advisors are known to take the edge off when it comes to forex trading strategies.

A forex expert advisor also doesn’t have feelings. Its analyses aren’t impacted by the fact that you really need a big win so you can put in a pool this summer. It doesn’t care if you just had a big loss and want to make it up somehow. It removes the emotional factor from trading. 

Plus, and don’t take this the wrong way – the expert advisor can keep more things in its head at once than you can. Not that you aren’t beautiful and brilliant! Just, it’s a piece of software. It can look at more variables at the same time than a person can. No shade.

Drawbacks of Using a Forex Expert Advisor ⚠️

Not all expert advisors are created equal. If you are using one that can’t respond to news in real time, it could miss obvious reasons to make a trade. 

The EA is limited by what you’ve programmed it to do. So yes, it can consider as many variables as you want it to – but you might miss some. This could lead to the EA overlooking some important stuff. 

Using Multiple Forex Expert Advisors Simultaneously 🚨

As we’ve mentioned, different EAs are built for different purposes. So, you might be thinking – aren’t five EAs better than one??

The short answer is – maybe! You can definitely use multiple expert advisors at the same time. Not all terminals are built to accommodate all these advisors at once – they might interfere with what the other advisors are doing. So, you might need to find a way around this issue. 

Get familiar with the restrictions of your platform. Then, you can figure out if it makes sense for you to combine multiple expert advisors. 

Finding a Broker that Works with Forex Expert Advisors 🗺

It’s vitally important that you find a way to integrate your expert advisor with your forex trading brokerage account. Make sure that you are using a trading platform that is compatible with your broker and with your planned expert advisor.

There are many expert advisors that are set up for MetaTrader 4 and 5 – even though these are the most prominent, you may be able to find other platforms that work with expert advisors. 

Make sure you choose a broker for more than just their compatibility with expert advisors. You’ll want reliable transaction processing that happens quickly without the platform freezing – this could cause you to make a trade at a different price point than you originally intended. 

You’ll also want a broker with reasonable costs for trading. Remember, your expert advisor might be making a whole lot of trades – or helping you to sign off on a bundle of them. If you have a broker with high commissions, large spreads, and overnight fees, that could seriously cut into your profits. Make sure your broker makes sense for the type of trading you intend to do.

Are Forex Expert Advisors Worth It? ⚖️

So, if you’ve gotten this far, you’re probably seriously considering getting a forex expert advisor. They might not be the right choice for everyone, but they certainly give some advantages. Remember, expert advisors leave emotion out of trading, don’t need to do pesky things like eat or sleep, and can analyze wide varieties of data all at once. These are some big advantages that might draw you in. 

Young man using laptop in a cafe
A Forex expert advisor won’t necessarily make trading easier, but it can make it simpler.

Before you run out and get the first EA you can find, know that they are not all created equally. This software can help you stay on top of market changes, and look at potential trades more objectively if you realize you’re in an emotional trading place. But before you start to really trust it, you’ll want to make sure you have a good one that is appropriate for your trading strategy. 

Many traders find that EAs don’t completely automate the process of forex trading, but instead supplement it. It’s not like having a magic robot that does all your trading for you personally – it’s more like having a robot sidekick that can keep you on track and help you make good decisions. It’s still you in the driver’s seat!

How Do I Choose a Forex Expert Advisor? 🗂

Many sites provide rating systems for different advisors. They’ll analyze how much an advisor costs, what it yields, and show you what you’ll need to deposit to start working with it. 

You can also analyze the EA’s class and type. The class refers to whether the EA is most helpful in trades over the short term, middle term, or long term. These will relate to what strategies you are working with: if you’ll be scalping, you obviously want a short-term EA, while other investors might want assistance managing their long-term investments.

The type refers to the types of advisors we went through above: trend, hedge, news, scalping, and breakout. You’ll want to choose the right expert advisor based on the type of trading you intend to do. 

And remember, technology changes quickly. That’s no less true of expert advisors than it is of the latest phone, or pad, or watch, or whatever it is you kids are buying these days (the latest fax machine?). 

Certain EAs rely on machine learning, and get more accurate as they reach larger scales. If you’re on the fence about a certain expert advisor, you can always check back in a few months and see how it’s doing. 

Forex Expert Advisors vs. Forex Robot 📊

We’ve thrown the word “robot” around a bit today. That’s because it’s fun to talk about robots! We can’t help that we’ve seen a whole bunch of sci-fi movies, and we like to pretend that our computers have personalities and will one day become our friends, only to deceive us and start their own society. (That’s what we all do, right?) 

In reality, there is a difference between forex expert advisors and forex robots, and it’s very important. A forex robot will make trades for you – it basically will try to take the steering wheel and manage your whole forex operation.

Technically, an expert advisor, as the name suggests, will just advise you. The name is supposed to refer to software that won’t actually make the trades – you’re still going to have to pop in and push the button. 

“But wait!” you’re likely saying. “I’ve seen tons of EAs that will make trades for you! What’s this all about?” (We know, that was a really strong impression of you.) Well, the answer is just that language is slippery. While this is technically the difference between EAs and bots, some people are now calling things EAs that make trades for you.

The takeaway here is that EAs don’t have to make automatic trades for you if you don’t want it to. Many advisors will just alert you when particularly exciting trades are possible, or when you might want to close out of a trade to escape a nosedive. The expert advisor is there to process all the variables, but it’s not going to decide what to do with that information. That, my friend, is still totally up to you. 

So, if you saw all the same sci-fi movies we did but for some reason interpreted the inevitable robot apocalypse as a bad thing – don’t worry. Many expert advisors aren’t really taking any power away from you, they’re just presenting information for you to use to make your human decisions. No need to wrest power back from them. 

Conclusion 🏁

Now you know all the basics to decide whether a forex expert advisor is the right choice for you! Of course, it’s tempting to sit back and let the EAs do all the work – I mean really, we’re here to make money so we can go cheer on our favorite football team or ice skater or whatever does it for you. 

An EA won’t quite bring your time dedicated to forex down to zero, but it can help you make informed decisions. It’s ready to be your buddy to bring you new information and watch the markets for you when you’re off the clock. If you’re ready for that kind of info – check out the leading EAs, and test it out!

Forex Expert Advisor: FAQs

  • Are Forex Bots Profitable?

    The best forex bots make a profit for their users. But, not all forex bots are created equal. Be sure to read reviews before trusting a bot.

  • Why Do Expert Advisors Fail?

    Expert advisors will only do what they are programmed to do. This means they may not consider important variables that were not included in their initial programming.

  • Are Forex Bots Legal?

    Yes, it is legal to trade with forex robots.

  • Can You Edit an Expert Advisor

    Yes, many expert advisors will allow you to change the settings or modify the program.

Get Started with a Forex Broker

Fees
Average spread EUR/USD standard

1

0.9

All-in cost EUR/USD - active

0.7

0.363

Minimum initial deposit

$100

$250

General
Total currency pairs

82 (in US)

93

Demo account?
Social / copy trading?
Rating
Fees
Average spread EUR/USD standard

0.9

1.4

All-in cost EUR/USD - active

0.363

1.4

Minimum initial deposit

$250

$0

General
Total currency pairs

93

71

Demo account?
Social / copy trading?
Rating
Fees

Average spread EUR/USD standard

1

0.9

1.4

All-in cost EUR/USD - active

0.7

0.363

1.4

Minimum initial deposit

$100

$250

$0

General

Total currency pairs

82 (in US)

93

71

Demo account?

Social / copy trading?

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

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