Trading currencies has become one of the most popular investments of late. In order to help them make better and more informed decisions, many investors rely on the help of a forex EA. Forex EA is a shortened version of ‘Foreign Exchange Expert Advisor.’
This automated trading system is predominantly written in MetaQuote Language 4 and can be used on the MetaTrader trading platforms, MT4 and MT5. The system is programmed to track changes within the Forex market and recognize specific patterns and inflection points, converting them into money-making opportunities.
Common EA types
Previously the job of a person, this function has slowly transitioned into one occupied by a robot. A modern forex EA is a piece of software coded to assist traders in speculation in two methods. Hence, there are two types of software:
- FX signals perform an advisory role. They recognize a trading signal and notify users when a favorable time to trade comes but do not execute the trades themselves.
- FX robots make decisions and carry out trades automatically either through their own filters or one set by the users, depending on their goals.
As it is based on preset rules, often customized for different assets, this software helps investors eliminate the risk of making emotional decisions, which always presents a huge trap, especially for novice traders.
How does a Forex EA provide value?
Forex EAs has unlimited research and can do calculations between many different currency pairs efficiently. This feature removes the burden of doing manual calculations as well as allowing traders to make quick instantaneous decisions when the market is yielding favorable results.
Another reason is that emotion does more harm than good to an investor. By setting an initial parameter that is suitable to your investment goals, you can refrain from changing your mind and making rash decisions in response to volatile market movements.
Forex EA is an assistive tool that introduces them to the world of forex trading. Users can start familiarizing themselves with trends of the market and picking up patterns from the EA’s coaching. EA’s guidance allows users to have hands-on experience as they get to grips with the market. It will also prevent them from making radical, overambitious trades that can lead to losing a lot of money very quickly.
A forex EA operates 24 hours a day which allows users to fill orders even when they are not following the market and capitalize on the best deals. This feature reduces the time commitment needed and makes trading accessible to a wider variety of customers. Furthermore, users’ stress levels can be minimized as they are not obliged to follow the market fluctuations.
Choosing a suitable Forex EA
In order to verify the reliability and transparency of the platform, you can look at whether the platform has:
- Verified trading results
- Backtesting data
- Drawdown percentage
The former two help indicate the trustworthiness of the broker based on historical data, whereas the drawdown percentage is an indication of the amount of risk you are putting into your investment.
You should also consider your financial situation and how much control you will have over your investment. Hence, you should also be aware of the following factors:
- Minimum deposit amount. New and young investors should consider the minimum deposit they will have to make to activate their accounts. This ranges from $10 to over $4,000. Therefore, do your research and find a suitable platform for your needs.
- Deposit and withdrawal options. Various payment methods often imply different fees. Check which option (wire transfer, bank transfer, cryptocurrency) is the most suitable to you before proceeding.
- Withdrawal limit. Throughout your trading career, you will wish to withdraw funds you have earned. Make sure you know all the limitations set by the broker and feel comfortable with them.
- Redemption period. Check if there is a set period of time when you are not allowed any withdrawals. This not only prevents you from accessing your funds at your discretion but can lead you to lose out on other investment opportunities.
- Trading instruments. Last but not least, check if the platform matches your goals. Many platforms only trade 1-2 currency pairs meaning if a market stagnates, you do not have any flexibility. At the same time, flexibility and diversification are what you need in building your risk management strategy.
- Order size. If the lower limit is too high, you are putting yourself at more risk. You will also need to answer the question of how much automation you want, which varies between EAs.
Avoiding Forex EA scams
Many forex EAs guarantee extremely high profit and have outlandish claims. Although most forex EAs satisfy their mission statement, there are numerous scams, so always be aware of sites that promise too much and too quickly. So how can you avoid these scams?
Nothing beats education. Learn and read thoroughly about the platform you are about to use. Look out for these red flags:
- The drawdown rate is too high.
- Information provided does not match the real-life market (delayed demo price feed).
- No stop loss feature or a huge stop loss without a possibility to change settings.
- False promises such as ‘get rich quick’ or ‘guaranteed high profit.’
Once all of these boxes have been ticked, create a demo account to test an EA’s performance, or start a micro/nano account with small deposits.
Getting started with Forex EAs
1: EA provider selection
Do your research. Does the targeted Forex EA match all the criteria in the ‘choosing a suitable forex EA’ above?
Here are some ‘green flags’ of accredited brokers:
- An abundance of positive customer reviews. Get some user experience with the application. It is even better if you can consult someone who has been or is using the services.
- Realistic promises. Look for feasibility, don’t be blinded by promises of a very high return or especially guaranteed — as we all know, nothing can be guaranteed.
- Communication. Have a conversation with the brokers before purchasing their robots to see if they are willing to converse with you. The quality of their customer service will be an indication of their reliability, especially at a time where you encounter a problem that needs to be resolved. Having early conversations prevents those lengthy, uncertain, and emotionally draining waits when a problem does occur.
2: Set your priorities in trading
Set your profit, stop-loss amount, or use the parameters recommended by the app. The expert advisors usually have a customized set of parameters for every instrument, so it is not recommended to change the settings.
3: Getting started with your trading
After purchasing your EA, install it on your trading platform. Make sure you check your trades frequently to catch any discrepancies.
Best Forex EAs of 2021
Besides looking at the key brokerage service aspects, in this analysis, as we examine the quality of each EA, we take into consideration the following criteria:
- Features and strategy
- Verified trading results
- Money and risk management
- Ease of use
- Vendor transparency
- Customer reviews
Finally, we arrive at the selection of the best expert advisors in the market:
RoFX provides a variety of fixed-term investment options for different tenures — 70, 120, 160, 270, and 360 days — which yields higher rewards than a flexible term. The company will pay for bank commissions if users withdraw after their term is finished. Meanwhile, users will be fully responsible for all fees if investments are withdrawn prematurely.
The platform guarantees loss coverage, which means if the robot makes a loss, the RoFX will pay back the amount lost. Another factor that makes RoFX a low-risk platform is low drawdown. However, these perks come at the cost of sharing profits. At the lowest level of subscription, users only receive 45% of the total profits, with the rest going to the EA as a ‘performance fee.’
The minimum deposit amount ($1000) for RoFX is on the higher end of our list. You can make a deposit with your credit card or use Bitcoin, which is one of many improvements and changes since the company launched in 2009.
In addition to this, users enjoy the courtesy of RoFX 24/7 customer service, transparency, and an easy-to-use application. RoFX publishes monthly and annual reports of its trading results and up till now, they have always been in the black.
Furthermore, the platform is very user-friendly, as no downloads or installations are needed. Users can trade directly from the webpage. Lastly, users can track and follow the robots’ trade in real-time. This feature enables users to feel more secure with their money.
2. FX Track Pro
FX Track Pro EA is another option that fulfills most of our criteria. The system is composed of three indicators that analyze the current market situation and chooses the one with an entry point that will yield the highest profitability and lowest drawdowns. Additionally, there is a 30-day cash back policy which means low initial risk.
In order to use FX Track Pro EA, you are required to buy a license for $300+. With this license, you can trade three currency pairs. However, you will get an additional 3 if you choose to upgrade to the pro license for $400+.
After an easy process of installation and configuring your robot, you can start trading. When trading, you can observe your robots’ live transactions and have enough control to withdraw if irrational trades occur.
To add to the users’ feeling of security, FX Track Pro EA is transparent with its trading history. It allows users to see its open trading history, which is important as most decisions are based on historical data. It also has a feature that allows users to verify trading results via a third party on MyFX Books.
3. Z-Trader FX EA
Z-Trader FX EA is a match for FX Track Pro EA in our experts’ view, especially when the new investors are concerned. The minimum deposit is $200 (the lowest on our list). Users can also work on a demo account to gain more trading experience and understand more about the market before moving to a real account which costs $130. Systems are fully automatic, proving suitable for people with little to no experience.
Backtesting reports are provided alongside real account trading results where the historical data is collected for backtesting. The high level of transparency backed with an easy-to-use platform and low-risk (only 16% drawdown) constitutes to Z-Trader FX EA’s credible reputation.
However, unlike the previous robot in our top selection, this one has some major drawbacks. First, the developers’ identity is unknown. Second, there is no clear refund policy. And finally, trades can only be executed using USD/EUR which limits the pool of customers as well as trading opportunities and flexibility.
We are starting to move into a group of brokers with lower ratings by the customers. FX Goodway belongs in this group and has very little information and transparency.
The developers are anonymous, there is no clear data on how long it was tested, but some backtesting results are displayed on the site. The same is true for the historical data: no reports on weekly, monthly, or annual performance are provided.
Users can start trading with a minimum deposit of $700, but they are offered only three trading options, called ‘sets’ — and only two instruments, EUR/USD and USD/CFH.
5. Happy Forex
Last on our list is Happy Forex. Unlike FX Goodway, there is plenty of information available for this platform. However, their credibility and quality are relatively low according to their customers.
The selection of products is also a bit wider. You can purchase 2-5 licenses for $300-$500. These licenses come with ten robots that can work at the same time to find the optimal solution.
Users are secured with a 30-day cash-back policy as well as the ability to track trading performance data live on their website or via a third party.
This program uses a grid strategy and ‘traps’ the price and profit when the market is moving up and down. This can be risky. Trade positions can open for an indefinite amount of time, causing high drawdowns.
Mastering FX trading requires ample time and commitment that not everybody can afford. By downloading the application, new users have access to the market and can start trading with the guidance of an EA that does all the buying, selling, and technical analysis for you.
A quality forex EA is a useful tool that helps users trade without significant knowledge of the market and charts, offering experienced traders extra opportunities at the same time.
The time you spend researching the potential opportunities, exploring demo versions, and checking the free trials can never be too long if it makes you prepared for the right decision.
You can use the rules and criteria we outlined to research the market for the best forex EAs in 2021 or refer to our selection of the top five forex EAs.