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5 Tips to Level Up Your Forex Expert Advisor

January 21, 2022
by Leon Marshall,

Article Recap

Forex trading strategies are often automated through Expert Advisors. Setting them up correctly is an option to keep profits high and losses low.

Nowadays, Forex trading strategies are often automated through Expert Advisors. Setting them up correctly, keeping a vast library of EA choices and maintaining the most relevant ones is an option to keep profits high and losses low. Here are 5 tips that can help level up your forex expert advisors.

Take advantage of market conditions

The Forex market is the most dynamic out there, right next to that of cryptocurrencies. This is why a great expert advisor is one that adapts to the ever-changing market conditions. However, programming your EA can be tricky. You should consider programming your EA to activate only when concrete trading conditions are met. 

Entering a position is not enough – be ready to exit anytime

Looking for an opportunity to enter the markets is one thing, but without a plan, things can take a turn for the worst.. An EA focused on range trading would be unable to progress in a breakout situation, nor would a momentum EA survive a short squeeze. Just as when doing it manually, market conditions are, first, identified and, second, acted upon. Entering a position is just the start, but without a strategy, exiting it could be a nightmare.

       

Organize EAs based on goals and performance

In trading, getting rid of EAs that try to cover too much ground by themselves is recommended. Need to monitor several time frames? Just set up several EAs that have no correlation to each other and are each fit for the different strategies already made. Used to short-term trading? Try having separate EAs for scalping and day trading. Then, base everything on performance, and allocate the relevant amount of budget to each EA, depending on how well it is doing.

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Trade smart and cut costs – less can be more

Say a drawdown hits and the EA is no longer as optimal – just trade less. Losing periods happen for both people and machines. Reducing trading sizes is nothing short of reasonable when you know your EA as well as the palm of your hand. In a similar manner, if returns are not as high, reducing costs can have quite a positive impact. High spreads are considered more unstable, making traders prone to experiencing a larger number of losing trades, most often by getting stopped out. Low spreads, on the contrary, generally provide more stable options for taking a position and increasing profits over the long run.

Use live data, but work on virtual private servers 

Alright, so now that your expert advisor is ready to go, it’s time to go and conquer the world, right? Yes, but with an asterisk. It’s very likely that it’s not going to work perfectly right off the bat. A much more realistic way of thinking is to let the EA do a thorough test run over the exact data you intend to trade. Strategies go only so far, but if it is back-tested with high-quality pricing data, then it will be much easier later on to adjust it according to ongoing changes. To eliminate delays in order executions as much as possible, the usage of a co-located virtual private server, or VPS, is strongly recommended as it would be running from a data center server access via the internet, which reduces redundancy and improves reliability noticeably.

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Trading on margin is high risk. 

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