MetaTrader Expert Advisor - The Benefits of Algorithmic Trading and Forex EAs

[](https://acy.com/en/)[](https://acy.com/en/campaign/anniversary) Search Symbol Trade [Open an Account](https://acy.cloud/open-live-account?url=https%3A%2F%2Facy.com%2Fen%2Fmarket-news%2Feducation%2Fexpert-advisors-benefits-forex%2F&next=%2Fcreate-account%2Fselect-account-type&locale=en) Login [](https://acy.com/en/)[](https://acy.com/en/campaign/anniversary) click to search Trade open menu [Home](https://acy.com/en/) Trading Products Platforms Trading Tools [Partners](https://www.acypartners.com/) Learn News & Analysis Support Tim CahillSocceroos Legend & ACY Securities Global Brand Ambassador  [Explore More](https://acy.com/en/campaign/tim-cahill/) # MetaTrader Expert Advisor - The Benefits of Algorithmic Trading and Forex EAs Ashley Jessen - Chief Operating Officer 2024-01-29 11:20:30 [](https://www.instagram.com/acy_securities/)[](https://www.linkedin.com/company/acysecurities/)[](https://www.youtube.com/channel/UCdyIX701mkb_QmVd1Atbxxw?sub_confirmation=1)[](https://twitter.com/ACY_Securities)[](https://www.facebook.com/acy.securities) Welcome to the world of creating automated systems using [Metatrader](https://acy.com/en/platforms/mt4) Expert Advisors. The last few years have been the year of Artificial Intelligence and algorithmic trading. Many may think trading the global markets using algos is a 'new invention'. But you may be interested to know the most successful and richest fund manager, Jim Simons, uses purely quantitative methods, generating 66% annually for 30 straight years (1988 to 2018). His income in 2021 from running his fund was $3.4 billion. So, you might be wondering, what is involved with creating your own Expert Advisors to seamlessly execute your trades into the market 24 hours a day, 5 days a week? Before we dive into that, it is interesting to note how active the institutional trading desks are in using algorithmic systems to execute their trades into the market. According to a Greenwich Associates study, the proportion of spot FX traded with an algorithm by corporates shot up to 28% in 2016, from only 10% in 2015. Recent reports suggest that figure is now at 30%. ## What is a Forex Expert Advisor (EA)? You have no doubt heard the term Expert Advisor brandied around on trading forums around the world. They are becoming more and more popular for several key reasons. Before we get into the benefits of automated trading with your own Metatrader 4 expert advisor, let's discuss what they are. An Expert Advisor (EA) is a process in which you code your complete trading system into the computer in order for it to be executed on your behalf. ## What can be coded into your Metatrader trading EAs? Basically, every component of your trading system can be coded into your Metatrader expert advisor. ### This means you will need to identify your: - Entry criteria - In profit exit criteria (including trailing stops) - In loss exit criteria - Position sizing rules - Money management rules - Breakeven rules As you can appreciate, this is well suited to those who have created or are in the process of creating mechanical trading systems. Mechanical systems have precise entry, exit and position sizing rules with no grey areas. The other alternative is a discretionary trading system. A discretionary system can have grey areas, which are essentially rules or trading ideas that cannot be automatically executed by a computer. An example of a mechanical trading system or simple expert advisor system would be to buy 1 lot of the [EURUSD](https://acy.com/en/market/eurusd/) forex pair if the 5-period moving average crosses up through the 20-period moving average and close the trade when the 5-period moving average crosses back below the 20-period moving average. An example of a discretionary system is where you might decide to buy double your normal position size because volatility is low across the markets you are trading. This meant you had to manually look at the relevant markets to see it met your criteria and then decide if you should place a normal size trade or more based on the volatility. ## Automating your trading system The benefit of creating your own trading robot is so all the order placing can be executed by your computer. You no longer must be there entering in every buy and sell order or adjusting your stop loss as the market moves higher. Every single aspect of your system can be coded in. And the good part is the EAs operation removes the emotional aspect us humans have when faced with the fear of placing trades. The MQL4 language is built by the Metaquotes software corp, who build the MT4 and [MT5](https://acy.com/en/platforms/mt5) trading platforms. And it is for this reason the MT4 platform has become one of the most dominant Forex platforms in the market today. You can download Metatrader [here](https://acy.com/en/download-mt5/). ## What programming language is used with MT4? The Metatrader trading platform uses the MQL4 programming language, which is an object-oriented programming language. Many suggest the language used is closest to the C and C++ programming language. ## The basics of creating the best Expert Advisor to gain an edge You can already see the global FX institutions are using programming tools to create their automated trading systems into the market. One of the reasons for this is they have a number of Quants who can identify positive expectancy trading ideas and back-test them quickly. You can use the strategy tester within MT4 to test your own systems using historical information too. Once the back-test results prove there is an edge, it needs to be executed into the market. Now imagine if you had 5-10 of these positive expectancy trading systems. You may be completely overwhelmed when many entry or exit signals trigger at once. So, they get coded into their respective trading software such as MT4 so they never miss a signal. ## Top 5 benefits of using a Forex trading robot to execute your trades 1. You can focus on creating positive expectancy trading systems. 2. Computers are much faster at responding to alerts than humans. 3. Never miss a trading signal. Your EA never sleeps. 4. You no longer have to be glued to your computer screen. 5. Remove the emotional element of entering or exiting the market. As traders, humans have several behavioural biases which lead to mistakes. When it comes to trading, those mistakes can mean thousands of dollars. Therefore, it goes without saying that if you have a tendency to override your own trading signals or miss signals for various discretionary reasons, building your own Expert Advisors might be the best thing for you. ## What types of automated Forex trading strategies can you create? As you can appreciate, you are only limited by your creativity, knowledge of the m