What Does EA Mean Regarding the FOREX?

What Does EA Mean Regarding the FOREX?
••• Kevork Djansezian/Getty Images News/Getty Images

If you are interested in making money at any time of the day, the forex market offers you an excellent chance of doing so throughout the year. To make matters better, it is the largest financial market globally, thus offering you plenty of chances to generate wealth. And you could do so in 170 different currencies.

However, before taking the plunge, it would be wise to learn the standard terms in use within the forex trading world, so you can navigate it better. And one major terminology in this MetaTrader era is Expert Advisors (EA).

EA Meaning in Forex

Depending on where you are and what you do, EA has different meanings. For instance, EA in selling refers to each product price. And it is a value at which you will sell each of them. However, the EA meaning in trading within the forex world refers to an Expert Advisor, a software tool.

The Expert Advisors can tell you when to execute a trade. In addition, you can program such tools to make trades, depending on your trading criteria, even when you are not around.

How Expert Advisors Work

EAs usually run on the MetaTrader 4 (MT4) platform. MetaQuotes Software developed the digital platform for futures and forex trading. And you can download the platform and use it regardless of your skill level for anything related to the forex trade.

Expert Advisors are one of the main features of the MT4 platform. You can import and use current ones or develop and test new EAs within the Integrated Development Environment (MQL4 IDE ) using the MQL4 object-oriented programming language and use them as trading robots to automate trading based on the parameters you set.

The parameters you set can then find trading opportunities and automate actions, such as opening positions. And when the position is open, your Expert Advisors could add close conditions like limits and trailing stops. Alternatively, you could program your Expert Advisor to notify you, so that you can take appropriate action.

It is possible to execute sophisticated trading moves by combining a lot of algorithms. And these moves can happen almost immediately, the moment the conditions you have set have been fulfilled.

Usually, EAs are available for free, for a one-time fee and on a subscription basis. What you get will determine whether you pay anything and how much you pay.

Expert Advisor Benefits

It’s not enough to understand the EA meaning in forex. It would help if you also learned the benefits of using Expert Advisors. Below are some of them.

  • EAs can monitor markets on your behalf even when you are unavailable. And if you have programmed them to do so, they can take advantage of opportunities even when you are not in a position to do so, depending on the trading method you prefer.
  • If you are an emotional trader who usually makes wrong decisions, EAs can provide objective decisions that enable you to act even when difficult.
  • EAs can monitor many markets simultaneously so long as they trade on MT4. That makes your financial research easier since you don’t have to take in so much information or remember it all.
  • It is possible to back-test the EAs you develop using historical market data. By doing so, you can refine it and make it more effective before deploying it within the live markets.
  • You can easily access existing EAs provided you are part of the MT4 platform. In doing so, you don’t have to build your own from scratch.

It also helps to know that EAs only work on the device in which they are installed when it is on and running. Otherwise they won’t work. Another weakness of these financial tools is that they completely take out the human factor, which is necessary for making some decisions when forex trading. And there is also the risk of buying an EA that does not work as well as it should, which may cost you money.

Final Thoughts on EAs

While EAs automate forex trading and make your work easier, you must program them to be successful. Therefore, ensure you set its parameters and always have an exit plan if things don’t work.

Also, provide more funds to EAs that perform well and focus on those that you are using at any given time. And don’t forget to back-test your tools using live data to ensure that it’s doing what it should.