These days, more and more trading happens automated. But what exactly are the benefits of using expert advisor automation? In this article, I list the top 5 ways how expert advisors will improve your trading.
1. Easier To Test Your Strategy
The number one benefit of using expert advisors is that they make it easy to test your strategy rules on historical data. The strategy tester in Metatrader 4 is where you want to be for this, with built-in options to test the strategy on many instruments and timeframes.
There’s no better feeling than to test your expert advisor and seeing that it is profitable! A nice looking equity curve is all you need to have the confidence to trade the strategy:
2. More Free Time
This is an obvious one. When your strategy can be traded automatically, you don’t have to monitor the charts, enter trades, manage them and make sure you enforce your rules.
Some of the benefits of freeing up more time:
- You can spend the time doing more trading research and improving the strategy
- You increase your opportunities as the EA can take trades during the night as well
- The time it takes to backtest a strategy is also reduced
3. No Execution Mistakes
When you trade manually, you might miss a trade. You might make a fat finger mistake and put on too much size. You might forget to exit a trade once your rules dictate it. Or move your stop loss once the price is going your way.
There are many ways you can mess up and make execution mistakes.
On the other hand, when your rules are enforced by code, it can’t make mistakes. Your trades will be entered at the correct time, your lot size will be calculated precisely and an EA can trail the stop loss in many different ways.
It’s predictable, repeatable and never gets tired (unlike manual trading!). The clear winner is automated trading with an EA.
4. Fewer Emotions
Ever had a loss and then tried to revenge trade? Or maybe you were so unwilling to take a loss and widened your stop loss? Or you simply threw all of your strategy rules out of the window and started trading impulsively?
Automated trading with expert advisors takes away most of those emotions because the decisions are made by the EA, not you. I’m saying most emotions since you can still feel fear, greed or other emotions, even though it’s not you who’s trading.
However, you know that if you just let the EA do its thing, it will result in trading profits, so you have a big incentive to just leave the EA be. And it’s always easier to not touch something than to actively make a decision so overall, this is still a big benefit.
5. More Advanced Strategies
Finally, trading with expert advisors makes it possible to trade strategies that would be nearly impossible to trade manually. If your trading platform doesn’t support ATR trailing stops, for example, it would be a lot of work to constantly check the ATR value and modify the stop loss manually.
Another example would be with strategies that allow scaling in and out. Some of the automated strategies allow for high-frequency trading that would not be possible if it was traded manually. Automated algorithms are simply much faster at making decisions and this opens up a whole new category of strategies that are not practical to trade manually.
There’s no doubt that expert advisors and automated trading strategies have many benefits. Whether it’s because you win time, it’s easier to backtest or they help you with trading emotions and discipline, expert advisors can mean the difference between profit and loss.
If you’re interested in using expert advisors yourself, check out our EA vault.