What is an Expert Advisor?

An Expert Advisor is a piece of software written specifically for a MetaTrader Platform.

An Expert Advisor can just advise traders which trades to make or can be programmed to automatically execute the trades on a live account.

They are very flexible pieces of software that can take any information into account that is available on the metatrader platform.

They are written in their own proprietary programming language called MetaQuotes Language Version 4.

EA trading is very popular these days and it’s easy to understand why. No need to spend countless hours in front of your computer, just throw the EA on a chart and that’s it, all you have to do is to go to the bank every month. Of course I’m kidding, things are always complicated and making money is never easy, otherwise we all would have thrown a $299 EA on a live chart and become billionaires overnight. So, why we should use an EA in the first place? Let’s see what are advantages and disadvantages of using an EA.
1. No need to spend your time in front of a computer, the EA trades for you, how it trades..well..this is another discussion :)
2. An EA has no emotions and we all know that emotions are very bad for trading. Fortunes are lost due to greed and fear the most dangerous and powerful human emotions. The EA does its job, nothing more and that can save you from a lot of stress. Fear is a survival response which leads to panic and panic leads to poor decision making.
3. Speed. No human can place or exit a trade faster than an EA does. Lots of pips can be saved.
4. An EA can monitor many currencies and timeframes at once,  no human being can do that.
5. EAs can see the big picture and this is the bigger advantage the EA has over humans. Our brain is not good at statistics and always misses the big picture and long term profits. A human can trade very well under a specific market condition and fail miserably once the market changes, we don’t even realize the change! On the other hand, an EA can monitor many vital indicators at once (long term vs short term volatility, the trend tendency on different timeframes, volumes, etc). It happens all the time with volatility breakout EAs. It always seem to us that they are buying at the top and selling at the bottom which is against our common sense but still they are successful on the long run. Sometimes you have to lose a few battles in order to win the war, an EA can do this without issues while we can’t.

1. The EA doesn’t read and interpret the news and this is a big inconvenience because news are a very important part and play a very important role in forex trading, they are market movers.
2. An EA is a robot, it does what is programmed to do and sometimes it can’t see the short term picture, for example it keeps buying when the trend of buying is over. If I trade manually I wouldn’t buy if the currency is overbought and positive news don’t move the market further, this is a clear sign of retracement. But the EA doesn’t know this and keeps buying. Of course, it wins in the long run but why miss a few pips profit?

3. Any manual intervention might reduce the long term performance.
4. Usually an EA doesn’t react to changes in market conditions.
5. The EA can be curve fitted and curve fitting is a safe way to disaster that’s why is strongly recommended not to add many rules in your EA. Any Ea can survive to a 13 years backtest if multiple rules are added just to make the Ea looks good on the backtest. Please keep in mind that money are not made on backtest, the backtest is just a tool that shows the robustness of a strategy, nothing more.
So, should we trade manually or use an EA? 
My answer is: both. 
Or at least keep an eye on your EA. Mixed trading can be very successful. Best Expert Advisors are being sorted. Thanks for your patience.
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