The forex market experiences trade worth over a trillion on a daily basis. This shows thata countless foreign exchange transactions are carried out. For one to sit before a computer the whole day and perform several transactions would require great commitment and a tireless spirit. However, humans get tired and may have other commitments elsewhere. That has seen the development and implementation of expert advisors to carry out the forex trades on behalf of the humans.
Expert advisors are robots that are designed to automate the whole trading process by carrying out the trades based on the trading strategy that has been inputted. Expert advisors are beneficial to any trade. There are several merits and demerits of utilizing expert advisors to do forex. The merit and demerits are as follows.
Merits of Utilizing Forex Expert Advisors
The merits comprise the benefits or advantages of using forex EAs.
1. Quick order execution
Regardless of the type of trader you are, it is vital that you react and carry out the various trade set-ups in the fastest and most efficientway possible.Even as your trading timeframe reduces, you need to polish up your ways of reacting and carrying out forex trades. Missing out on a profitable trade can cause a really huge difference in trade for a scalper trader in comparison to a longer period trader. Hence, short term forex traders ought to discover and implement techniques for minimizing latency plus slippage.
An expertly designed forex expert advisor is capable of recognizing possible set-us quicker than humans can. Moreover, the implementation of the expert advisor quickens the rate of execution of a trade. Therefore, EAs react to trade in the fastest way possible than humans can.
2. Minimizes time commitment
The forex market is a 24-hour operational market. However, as a trader,you have to plan your time really well such that it becomes possible to a lot of time to the busy work plus life schedule. Hence, a minimal amount of time goes into trade, which may make you miss out on the most lucrative trades.
However, having an expert advisor in place ensures that you are able to react to all the beneficial forex trades. The expert advisor enhances efficiency in trade in addition to minimizing the time required for monitoring the market.
3. Eradicates emotions
Emotions tend to largelyinfluence the decision-making process in the forex trade. Fear plus greed while trading can impact on the decision making you arrive at trade decisions with emotions. Such emotions can cause you not to think and make wise business moves. Therefore, you should put those emotions in check. The best means of taming your emotions is via the implementation of the Expert Advisors, which accomplish their trade roles minus any emotional influence.
As a forex trader, it is important that you stay informed of all your trading approaches’ trading metrics. The surest and easiest means of deriving the metrics is through a backtest. Backtesting can be complicated and highly unachievable, especially for manual traders. However, with the use of an Expert Advisor, backtesting is easy, and deriving the trading metrics is simple to do.
5. Promotes work-life balance
A balance ought to exist between the time you spend in the securities market, and the time you work and spend with family. Since the forex trade can be so demanding, most time is spent analyzing the market and performing trades.
Implementing the expert advisor trading system can help in bringing balance to your life. the trading system will handle all trade-related issues, as you have a lot of time to go to work and still have a great time with your family.
Demerits of Forex Expert Advisors
1. Does not acquire and build trading skills
Relying on an expert advisor to do the trade for you at all times will not help you acquire any trading skills. Therefore, it becomes difficult for you to trade on yourself in the event that the Expert advisor’s trading system becomes obsolete due to the changing market systems of trade.
2. Extra costs of VPS
EA operates from a Virtual Private Network (VPN) if at all it is to achieve optimum performance. A VPN guarantees a stable network that can afford lower latency, and hence ensure quicker execution of the trade. However, acquiring a VPN can be really expensive, leading to additional costs.
3. Technical hitches can arise
Technical failures can occur and negatively impact the performance of the expert advisor. For instance, the computer may crash, there could be power black-out and the computer’s software may require some updating. All these impacts on the EA and may result in its non-performance.
All in all, the expert advisor is a great trading system that makes it easy for those individuals who are interested in doing the forex trade but do not have time or experience to do the trade. The advantages outweigh the disadvantages, making it the best forex trading tool.