How to Use Expert Advisors on MT4
An expert advisor, also known as an EA, is essentially a program that can automatically place trades for you. This program (or robot) follows a trader’s instructions once certain criteria has been met. Thus, it is a form of automated trading, since a trader does not need to do anything for the orders to be entered. The program basically works using if-then statements to create mechanical rules.
Benefits of an Expert Advisor
Apart from placing trades, an expert advisor can also control the position size when entering an order. The position size is influenced by the size of the account. This is because a position size of the same euro value can be a small fraction of an account that has for example €100,000, but may be significant for an account that has €1,000. Therefore, an EA should take into consideration the account equity when determining the position size.
An EA can be easily installed in the MT4 platform. In case you’re already following a process or have a system in place, you can create an EA to follow the same process upon a signal. Thus, the EA is essentially replicating whatever you would do. The EA comes in handy for particularly those traders who trade a number of currency pairs as well as for those who are too busy to trade too frequently. Even when you’re not at your computer or don’t have time to look at the MT4 screen, the EA continues to look for trading opportunities on your behalf.
All you have to do is to leave the computer on, and the EA will place orders and exit trades for you. Moreover, you can study the performance of the EA overtime. This gives you an opportunity to test the instructions or criteria set for the program.
Do keep in mind some of the disadvantages of running EAs. This includes ensuring you have reliable internet connection. Most EAs are set up for a specific market, though some work for multiple trading pairs – just be certain what you are trading. As EAs are math algorithms based on technical analysis they tend to work best in trending markets rather than sideways. Which also means you have to be on wary of sharp fundamental moves.
Since an EA performs the trade automatically, it’s critical that the program allows you to set a risk level, taking into consideration your account size.
Issues Associated with EA
There are hundreds of EA programs that can be downloaded from the Internet. However, you’d have to be very careful, because some of these are of lesser quality than others. You can read reviews before deciding on which EA to download. There’s also the option of creating the program yourself. It’s a little complex, but it may be worth the time. You can also hire a freelancer for creating the program for you.
How to Set Up an Expert Advisor on MT4
Create or download an Expert Advisor. Copy the EA files from the location where you saved it. Now you need to locate the MetaTrader4 folder on your computer. Open this folder and look for the Experts folder. Open this folder and paste the EA files. Your computer may open a pop-up requesting admin permission. Click on the Continue button.
Now open your MT4 platform. On the left bottom on the screen, you will see the Navigator window. Here, you will find a folder named Expert Advisors. Click on the + sign to the left of the Expert Advisors folder. You should be able to see the desired EA in this folder. Click on the desired EA and drag it onto a chart.
A pop-up will open and you can change settings and alerts here. Once done, click OK.
MT4 does not allow two EAs to be attached to the same chart. However, you are allowed to run more than a hundred EAs on the same trading terminal. So, if you want to run two EAs, you can simply open new chart windows, one for each of the EAs you want to run. Simply open as many windows as the number of EAs you wish to run, and attached a different EA to each.