Automated Trading

Reading this page: 10 minutes.
Learning how to trade with automated Expert Advisors (EAs): Definitely spend a good amount of time understanding this, hours will turn into days.
Choosing EAs to trade with: This, you should spend a lot of time evaluating before trading live with them.
Learning how to create EAs: This is going to take a lot longer for most people. Expect to spend a lot of time on understanding the software, and then the programming language if you are interested. It took us a few years to get where we are but feel the ultimate rewards and freedoms have been worth the effort for us.

What is automated or algorithmic trading?

It is the programming of a set of rules to open and close trades of specified amounts using various trading platforms.

The platform we use for this is MetaTrader 4. In MetaTrader these automated trading programs are called Expert Advisors, or EAs for short and the automated chart-analysis visual information, Indicators. Our focus on this website is on finding, developing and using MetaTrader EAs and Indicators to profit in the long-term.

Plus, as with many other platforms that allow programming, we can produce automated chart indicators that give us price movement statistics, visual prompts and email or text alerts based on price data.

The advantage of programming these rules is that they can monitor price movements on many instruments around the clock, opening and closing trades with greater accuracy.

These same programs can be run in a simulation mode on historical price data to see how they would have performed in the past with various parameters – this vastly increases the amount of strategy testing and refinement we can do beyond manual chart analysis.

EAs and Indicators already available for sale or free to download

The best place to start understanding automated trading is to see what is on offer online, how it is being presented, how it should work, and what performance data is available.

Our favourite website for reviewing and analysing EAs is Birt’s EA Review website. Birt is an experience programmer and EA backtester and can provide you with a lot more information on EAs than websites marketing and selling them – as you will see, their performance can vary greatly, and is affected by many factors.

Another mature commercial EA review website is the Forex Peace Army test lab, where they aim to provide an impartial reviews, collect user feedback and give ongoing performance monitoring data.

For free EAs and Indicators with lots of information, and discussion it is worth having a look the Donna Forex forum and Steve Hopwood Trading forum, although be prepared to do a lot of digging for the gems, and be careful not to get caught out by hype from unscrupulous vendor stooges.

Commissioning MetaTrader Expert Advisor and Indicator programming

You could use your own trading experience to commission EAs and Indicators to be written for you. There is a programming service offered on FXCM, and some contributors on the the Donna Forex forum and Steve Hopwood Trading forums may take on your projects privately.

Make sure you only get the functionality you require programmed and advise on what functionality they already have on offer from their library of code. You might want to keep your preferred settings to yourself – that is your private trading information and there’s no reason for you to share this to get the EA developed – you could just set some average default values for testing purposes and then save a settings file on your computer to quickly configure them.

A quick search on Google should yield a lot more programming services but make sure you see some working samples and agree pricing and payment milestones up-front to avoid running up a big bill.

Creating your own EAs using specialist software

This will depend on the depth, time and inclination you have to get into with the wonderful world of software programming and debugging.

With the support of those with more experience, the software generated option can accelerate your understanding – you can create working EA code that you can learn from, and perhaps customise, or find a developer to customise for you.

Genetic Builder v2 is certainly the easiest and best solution we’ve ever seen for creating your own EAs based on standard MetaTrader indicators, plus it offers custom triggers like candle patterns and Open, High, Low, Close (OHLC) rules.

If you decide to trial or purchase it, do feel free to support our fundraising by using our Genetic Builder affiliate link.

We did come across this unidentified but clever website for creating simple EA code for free. It is the based on standard MetaTrader indicators and will give a good idea of the code structure and possibilities.

There is also the promise of a more accessible and useful EA creation Wizard in MetaTrader 5, which some brokers are now starting to offer for live trading. We are currently reviewing the progress of the update interest for MT5 but, until it is widely supported, we still see a few years of mileage left in MT4 due to its extensive usage and stability.

Programming and customising EAs and Indicators

This is where it gets really interesting, and can give you the ultimate confidence in automated trading from getting to know exactly what your EA or Indicator can do, is doing, how it does it, what could go wrong, and how to improve it over time.

The best book we have found so far to introduce you to programming EAs and Indicators is the Expert Advisor Programming book by Andrew Young. All the code created in the book is designed to be robust and includes, good coding practices, error and safety checks, and you can download all the source code to use for developing your own projects from his website.

There are some good tutorials and discussion on mql.com and then you can get involved in the forums mentioned above to evaluate other people’s freely distributed code to further your own library and ideas.

However you choose to take this journey into the mechanics of automated trading, we are sure you will find the insight extremely useful for evolving disciplined trading strategies for your portfolio to grow your account.