What Is an Expert Advisor?
An expert advisor is a computer program that is designed to automate forex trading. There is a forex market open somewhere in the world 24 hours a day, seven days a week. You can use an expert advisor or a trading tool called a "forex robot" to carry out trades in your absence.
These tools enable you to make trades while you're working, asleep, or doing other things. Like other artificial intelligence platforms, they have some benefits and issues that you should be aware of.
Advantages of an EA
If you're prone to trade when your emotions get the better of you, an EA removes that factor from your trading. If you use an EA, your fears and drive for more profit won't affect your choices when responding to trading signals; the EA will carry out trades based on your input. It has no fear of loss or profit-making mentality; it only makes the trades for you.
If forex trading is your main source of income, using an EA can reduce stress levels, because it takes away the mental strain of trading. You can set your trades for the day and move on to other tasks or efforts.
An EA or robot can compare far more variables per second than a human can. Our brains are not fast enough to match an EA's speed at weighing options.
EAs can consider the variables for several different currency pairs at the same time. The speed at which they make decisions and act on them is the main reason many traders use EAs.
Disadvantages of an EA
One of the issues you face with an expert advisor is that it cannot respond to real-time news. It ignores factors that cannot be programmed into it. If you're at your desk monitoring the news, you can avoid making a trading mistake after a news release. The EA, however, will not care about the interest rate decision being published in one hour; it will keep trading (or not) if it is set to do so.
Even though the EA can deal with more variables at once than you can, it can only act in the manner you've told it to. You're not as rigid in your thinking, so you can respond to things that fall outside the parameters you've set. There may also be times when you have to jump in to avoid a big trading error or take an opportunity.