Please do remember that result of backtesting solely tracked from past performance. Past performance doesn’t indicate future performance, please do note that.

The better the EA performed in the past the better it will be for us to filter. Which EA that have been through market obstacles or EA that just been released and sold with a lot of hype (quick rich). Ok, below here are some stuff that you should aware of.

1. Profit Factor

This ratio essentially shows you how much you can expect to gain for each dollar put into the account, over how much you’re at risk of losing. The profit factor is calculated as:

(profit – commission)/(max drawdown + commission)

A Metatrader EA with a profit factor less than 1 is a historically poor performing EA. The returns that it has produced do not justify the amount of risk taken on. Take a look at the table below for statistics of three hypothetical Metatrader EAs.

Table taken from http://www.thefxmarkets.com/

Simply look at the tables above. We can look at the EA 3 is performing poorly. Even though the gain is quite big compare to others EA but the loss is also bigger, not mention when you should consider the drawdown risk and commission factors.

2. Drawdown Analysis

When first analyzing the drawdowns of an EA, a good place to start is simply by looking at the equity curve. An EA with a choppy and sporadic equity curve shows a historically volatile EA; whereas a smoother equity curve shows a historically more stable EA. There are advantages and disadvantages of this drawdown.

Equity Curve – Volatile EA

Equity Curve – Stabil EA

A. Max Drawdown

· This is the largest drawdown (in percentage terms) that the EA has realized over its trading life

· This is the best indicator of a worst case scenario

· A good way to think about this is: If this drawdown occurred immediately after opening your account, could you stomach this type of risk?

B. Average Drawdown

· The average drawdown size (in percentage terms) realized by the EA over its historical performance.

· Calculated by summing up all the losses (%) and dividing by the actual number of losses.

• In most cases this statistic can be provided by your EA vendor

· The average drawdown will give you an idea of what you might typically see (on average) in a peak-to-trough cycle.

C. Drawdown Recovery

· Shows the time frame the trading robot has taken, on average, to recover from a drawdown back to a positive balance.

· A less volatile Metatrader expert advisor will often take longer to recover.

• Keep this in mind before deciding that a fast recovery is a good attribute.
• More volatile EAs often recover quicker, but this is due to large fluctuations and swings in performance.

By combining these three drawdown measures you can gain an encompassing idea of the inherent risks associated with the EA. When further combined with performance measures you will get a good idea of what to expect with a particular EA

3. Accuracy and The Win/Loss

You can calculate how accurate your EA performance by simply count how many total winning trades you have and divided it by total number of trades. But it’s very deceptive, since EA have their own method to capture profit.

Some EA are focus on lots of small winning and few of big losses or lots of small losses and few of big winning. Depended on the strategy of the EA. That’s why we enforce it by win/loss percentage. Simply calculate the average win % and loss %.

4. Expectancy of Performance

By combining accuracy and the average win/loss, you are able to calculate a measure that will help to forecast future performance. This measure is known as expectancy. You can calculate expectancy with equation below:

(Accuracy * Average Win)/((1-Accuracy)*Average Loss).

Expectancy shows you a projected average return for each trade over the life of your EA. Expectancy less than one shows that the EA historically loses more often, and is a surefire way to eliminate the robot. Each trade will of course vary on a trade by trade basis, but over the long run the expectancy is what you might be able to anticipate. Keep in mind the amount of trades taken into account when analyzing expectancy. For example, an EA with an expectancy of 4.3 may seem better than an EA with a 1.1, but if the EA with a 1.1 value made ten times more trades, it would be considered a more successful trading robot.

There are many tools to calculate how effective your EA, if you have still any other factors that you want to give me for input, please don’t hesitate to comment or email me at sanzaru@forexbreakthrough.com.

Of course it’s gonna work. But the big question would be, “Is it Profitable Consistently?”

It’s the main challenge and in this articles I would like to show you the possibility of using MetaTrader, whether it’s catastrophe or profitable. After all expert advisor are only tool for trading Forex Market. They are constructed according to a strict set of rules and parameters, and are designed to easily embed into your trading platform to execute trades for you. Most Forex EA’s can be completely automated while others are there to use at your own discretion, it is entirely up to you how you wish to use them and benefit from their distinct features.

As I discuss in previous article, most of the biggest mistakes that make trader lose their money to forex market are “emotions”. Inconsistency is another key factor limiting most traders to make it big in the world of Forex, and the reason is because the majority of traders find it extremely difficult to adhere to their trading plan; in turn costing them a lot of money in crucial situations.

The expert advisor has a trading plan, and because it is a trading robot it will adhere to its plan indefinitely, without being influenced by any outside factors i.e emotions, stresses, tiredness etc. The Expert Advisor watches the market 24 hours a day for you and will execute trades based upon its predefined parameters. Unlike a human, it is also capable of monitoring indicators, support and resistance levels, and many other factors in multiple timeframes and making immediate decisions.

The problem of expert advisor, will be appropriate like Bill Gates quote, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” Without proper trading plan, you will only get the result that you don’t want to wake up with.

There are some things that you should consider when choosing EA. The foremost basic things are:

1. Look for the contact details, make sure the seller has an email address and don’t hesitate to contact the seller about any queries you have on their products. If the seller is fully legit they won’t hesitate to answer any questions and even elaborate on their trading systems without pushing for a sale.

2. Look for Live Forward test statements. If the seller thinks his system is profitable then they should obviously be using it to trade with there own money right? And they shouldn’t have any problems in showing you the actual results of their trades. Forward test results are conducted with real money in live market conditions; it will show you how the system will work in real environment. Never and ever purchase any expert advisor that doesn’t provide live forward test statements.

3. The last but not least, make sure you understand how the EA work and see if it’s suitable to your trading style and if it has good money management and risk management. Don’t go out and buy the first expert advisor you see, shop around and make comparisons, contact the sellers and get all your questions answered before you make any final decisions.

It ain’t easy looking the profitable EA, only time can tell whether the EA is profitable or not. That’s why you can guidelines above to filter out how to find profitable EA.

Almost everybody know to succeed in the world of Forex Trading you need a good trading system, following to strict money management techniques while remain disciplined. Expert Advisor can seriously simplify the process and get you well on your way. If you wish to automate your Forex Trading Decisions by using a Forex Expert Advisor then you might want to check some of EA that have been developed by www.forexhope.com.

Thank you for reading, see you in next articles. Happy Trading.

~ Sanzaru
http://www.facebook.com/expertadvisor/
sanzaru@forexbreakthrough.com

They are a great tool to have in your trading arsenal, especially if you are starting out, as they have the ability to completely automate your trading decisions and take the emotions out of trading.

However looking for a profitable expert advisor is no easy task and for a beginner its pretty easy to get confused and possibly even mugged out of your money by the many scammers out there, if you are not careful. The market for Forex trading systems is heavily saturated with expert advisors that make amazing claims and offer dream results, but most of these sites can never provide legitimate info to back up their claims. These sites usually contain over emphasized sales letters along with pictures of Ferrari’s and mansions, they are pretty obvious to spot out and if you happen to encounter one of them, please do yourself a favor and stay well away from them.

Although with that being said there are a few legitimate expert advisors available on the market, that can make you money, and they are a great tool to have in your trading arsenal if used with proper money management techniques. All you need to do on your part is know how to find them and then pick which one is suited to your trading style and experience level. I have used a few of the top commercially available expert advisors on the market today and have traded them with some level of success. So I am going to let you in on a few essential things to look for and consider when looking for a profitable Forex expert advisor. It should help you differentiate the scammers from the real deal and hopefully help you make some good money off the Forex Market.

Factors To Consider When Looking For A Profitable Forex Expert Advisor

There are a few key things to look for when picking out a good Forex Expert Advisor and they are:

1. Always look for Forward test statements. Backtest statements and results are pretty much useless and can be easily forged so their no good. Forward testing is very important as it lets you know how the expert advisor will trade and react in different (LIVE) market conditions. Forward-testing is the major factor in your decision to purchase an expert advisor and in determining whether or not an expert advisor is reliable and profitable enough to trade with real money — it’s as close as you can get to seeing how the EA will perform in the live market.

2. Make sure the seller of The EA is the creator and an email contact is offered for any inquiries. Also the website and creator shouldn’t hesitate to provide you with extra info on how the systems works and elaborate on its strategy without pushing for a sale.

3. Provide regular ongoing after sales support – this is absolutely essential as the Forex Market is continually evolving and all EA’s need to be adjusted in order to adapt to market conditions. The creators are well aware of this fact therefore they are always upgrading their EA’s to remain profitable, and they will offer their customers free lifetime updates. Also by offering after sales support it lets you know that the seller is serious about his business, and is committed and dedicated to helping his customers make money with his Trading Systems.

Conclusion

Therefore if you’re looking for an expert advisor to automate your trading decisions then stick to the basic guidelines I have mentioned above. According to the info provided you should be able to give any expert advisor a thorough examination and in turn be able to find a good trading system that you can use for a long time to come which can help you make some easy money off the Forex Market.

It is no secret that in order to succeed in the world of Forex Trading You must follow a good trading system and adhere to strict money management techniques. An Expert Advisor can seriously simplify the process and get you well on your way. If you wish to automate your Forex Trading Decisions by using a Forex Expert Advisor then check out this Collection of The best Expert Advisors available for Forex Trading.

Yes, I’m a noob in Metatrader Expert Advisors, but I ain’t an Idiot.

Hi, my name is Gagahlin and my mission is to make sure you understand what is Metatrader Expert Advisors and how to use it for generating profit like a savvy trader. In this articles I will share my knowledge in Expert Advisors for more than 8 years. It got a bit techies, but I believe all of you are a quick learner. Feel free to add comment and suggestion, since I also want to learn from all of you lens reader. Hope you enjoy my articles.

What is a Metatrader Expert Advisor?

Metatrader Expert Advisor are mechanical trading systems which completely automate the trading process on Forex market by using unique Forex trading strategies. These trading robots trade under control of trading platform Metatrader 4 Trading platform.

As you can see in screenshot, It’s all fully scripted. You set all your trading strategies into code and let it run. Easy huh? It is quite fast money with Metatraders Expert Advisors… and vice versa. So it’s very important to always test your Expert Advisor before testing it.

Give Me Reasons why to use Metatrader Expert Advisors?

In a certain sources you can find that 90 % of traders lose their money on the Forex market because they let the rest 10 % of traders to earn this money. It occurs because traders-beginners, keen by passion, rush to trade without having Forex trading strategy. Even if they have Forex trading strategy this strategy is usually not tested on historical data, and also there is a human factor.

First of all the use of Metatrader Expert Advisors excludes the human factor, in the second it will help you to test Forex trading strategy on historical data by Metatrader Expert Advisors of a tester of trading strategy which is built in Metatrader. The tester of trading strategies helps not only to make a backtesting of Metatrader Expert Advisors but also helps to optimize Metatrader Expert Advisors parameters by using the built-in optimizer. The use of Metatrader Expert Advisors will give you the possibility to test your own strategy on historical data. You can even pay someone to make Metatrader Expert Advisors for you. I’ll give more update where the resources to do the coding of your system in the different link .

Such test of Metatrader Expert Advisors is called the backtest. To test Metatrader Expert Advisors on demo-account is called a forwardtest. The usage of Metatrader Expert Advisors will allow you to see all disadvantages of your Forex trading strategy. All Metatrader Expert Advisors offered by seller site usually have been tested on historical data and you can see their Metatrader Expert Advisors strategy tests reports (backtest); lots of Metatrader Expert Advisors are monitored on demo – accounts and you can see many forward tests as well.

Can I Make My Own Metatrader Expert Advisors in My Own Trading Platform?

Yes you can if your trading platform in MT4 or MetaTrader4

As mentioned above the Metatrader 4 is absolutely free-of-charge and many brokers worldwide open trading accounts (mini-accounts and standard accounts) under control of Metatrader. It is much more convenient than to trade under control of java – terminals. The Metatrader platform has variety of advantages and has plenty of useful functions among other platforms.

You can try and download MetaTrader for free in:
http://www.metaquotes.net/downloads
The Free version only available for desktop. As for mobile you need to pay for this moment. I’ll update this lens again as soon as there are changes in the website.

What is MetaTrader 4?

Metatrader 4 is absolutely free-of-charge and convenient for trade on Forex market. You can download platform Metatrader 4 by clicking the link. It has the built-in Metatrader Expert Advisors based on the technical analysis, such as metatrader indicators, Metatrader Expert Advisors, metatrader scripts; it also has its own built in programming language mql4, which allows to develop customized Metatrader Expert Advisors, metatrader indicators and metatrader scripts.

Me Want Metatrader Expert Advisor, How to Install it?

Metatrader Expert advisor should have ex4 or mq4 file extenshion, mq4- sourse code, ex4- compiled code. First of all it is necessary to copy this file to the Metatraders expert advisors folder of working directory. Under a working directory we mean a root directory, in which we installed MetaTrader 4 terminal.

The second step is to restart MetaTrader . After the restart the expert should be added to the list of experts in the window Navigator . It necessary to stress that the colored icon corresponds to mq4 file. If you have an ex4 file only, an icon in the window Navigator will be grey. The same grey color may mean that the errors in a source code appeared.

In order to check expert errors, you may press F4, the editor of language MQL4 , and then it is necessary to load the source code of expert into the editor. Press F5 in order to compile the expert advisor. In case of success, the sentence ‘0 errors’ will appear in conclusion window. Warnings are not errors and their presence does not hinder the successful compiling.

Now MetaTrader identifies our metatrader expert advisor and the source code of forex expert does not contain errors. Next logical step will be to specify working pair and timeframe for the expert. The easiest way to do it is to apply the technology Drag-and-Drop . For this purpose it is necessary to select metatrader expert, press the left mouse button and drag it on the required chart, then release the button. There is another way. After the selection of metatrader expert advisor, press the right mouse button for context menu, then choose from the menu Attach to and chart .

If you made the steps mentioned above correctly, you should see the window of expert settings, where you should let the expert trade.
Do not forget about the button Expert Advisors , which is located on one of standard tool bars of the terminal. The button must be pressed.

In the case of correct execution of all above-described actions, the name of forex expert advisor and smiling face must appear in the right overhead corner of the chart. It means that an expert is installed and ready to work.

An metatrader expert advisor is almost ready to work. Now we can look over or change operating parameters.

Properties of expert are accessible by pressing F7 , or from context menu of active chart.

The changed parameters can be saved by pressing the button Save . The button Load serves for the load of the values, which were stored before. A file with the expert parameters has extension set and this file is kept in the directory experts\presets of your terminal. The button Reset restores the values of parameters on those which are prescribed in an expert itself.

All important information about expert work or appeared errors is accessible from the log of metatrader expert advisors. This information is duplicated in a log file which is located in the directory experts\logs . The file name coincides with a current date.

What is Metatrader Expert Advisors Backtesting?

Metatrader Expert Advisors Backtesting is the test of Metatrader Expert Advisor on historical data (on quotations). All tests of our Metatrader Expert Advisor are made by trading strategy tester with the model of: Every tick method. It uses all available nearest timeframes. In other words if we have more that one period for the same timeframe, the data of the least timeframe will be used for modeling. Control points are generated on the basis of OHLC data of the least available timeframe – the same as in the preceding method.

In order to generate price movements between control items, interpolation based on predefined templates is also used. It is quite normal that several ticks can be modeled one by one. In this situation, the last quote will be fixed, because the doubled quotes will be filtered out.

Quality of modeling is 90 % accurate, but the success in the past does not guarantee the success in the future. All Metatrader Expert Advisors are tested on quotations of the AlpariUK broker. The tests for other brokers may differ, it occurs because of the differences in quotations of different brokers, but we can help you to adjust the expert advisor for your broker for a reasonable charge. \

METATRADER EXPERT ADVISOR BACK TESTING

1. Open the window METATRADER strategy tester by pressing Ctrl+R or by pressing the right mouse button on graphic arts to which we added metatrader expert advisor advisor and choose strategy tester.
2. Set a testing model. We recommend to use Every tick model for all metatrader expert advisors testing
3. Set a testing period and press a start.

What is Metatrader Expert Advisors Quotations?

Quotations of the various Metatrader brokers have distinctions, therefore it is necessary to make optimization and backtesting of expert advisors on broker quotations, which you plan to work with. We make tests of our Metatrader expert advisors on quotations of broker AlpariUK, as this broker gives minute and daily quotations from 2004 ( http://www.alpari-idc.com/en/dc/databank.html ) So in order to upload quotations in Metatrader terminal, you should:

1. Get and save on your computer minute quotations of necessary pair from AlpariUK History Center for MetaTrader 4.

2. Decompress an archive.

3. Open the window Options MetaTrader 4 by pressing Ctrl +O or from menu Tools/Options . On the inset of Charts, set Max. Bars history and Max. bars charts 2100000000

4. Open the window History Center Metatrader 4 terminal by pressing F2 or from menu Tools/ History Center

5. Choose minute quotations of necessary currency and press Import . Specify a path to the folder with minute quotations (read points 1 and 2) in the opened window and press OK

In order for the quality of modeling (while backtesting) to be 90%, it is necessary to generate quotation m5, m15, m30 from the minute quotations. It is possible to do using indicator Period Converter.

IMPORTANT! Testing of experts for other brokers is possible on more short time of history, as the brokers do not give the archives of quotations. It is also important to understand that taking advantage of the button download in the window History Center Metatrader 4 you will upload quotations of Metaquotes but not quotation of your broker. Quotations of Metaquotes can substantially differ from quotations of your broker.

What is Metatrader Expert Advisors Optimization?

Let’s examine the optimization of expert advisors on the example of advisor upstream EURJPY. We will optimize the size of stop loss and take profit. If you make optimization for Metatrader broker AlpariUK, then the period of optimization will be: start is 07.2004; the end is the current date.

We recommend to conduct optimization not up to the end of period = to the current date, but up to the end of period = current date – N of days N is chosen directly for every expert and depends on how often expert opens and closes orders. More orders are opened by an expert, less is N. The segment of history beginning of the period = (current date – N of days), the end of period = a current date will enable us to do a backtest of advisor on the area of quotations, which did not participate in optimization. So you are doing so called forward test of advisor.

So for the expert optimization, you should:

1. Open the window strategy tester by pressing Ctrl+R or by pressing the right mouse button on graphic arts to which we added adviser and choose strategy tester.

2.In the window strategy tester , open the window expert properties

3. Select optimized parameters ( in our example stop-loss and stop-profit)

4.Enter the initial values of the optimized parameters, step and stop

5.close a window

6.Select Optimization

7.Choose a model for optimization ( a model “ Open prices only (fastest method to analyze the bar just completed)” corresponds to the most advisors, although for greater accuracy it is possible to test on Every tick (based on all available least timeframes) but then time of optimization substantially will be increased.

8.Press start

9. After completion of optimization, open Optimization result and choose parameters considering a highest income and minimum drawdown. (obviously income should be high and drawdown should be less)

What is Metatrader Expert Advisors ForwardTesting?

Forward Testing is the thing you do when you set up your Expert Advisors on the day forward to test the market in your demo account. That means your EA will get the newest data to see if your generate any income or not in the latest market.

Most of people use this kind of method since it’s most reliable than using backtesting that could be optimized.

MetaTrader Expert Advisor Software – The Benefits

Trading with the expert advisors is seen by many (especially newbie) traders as the «holy grail» possibility. Such traders expect from each EA they find or buy the fast and risk-free profits. Of course, expert advisors are not the «holy grail» in Forex trading. Automated Forex trading is just another tool that can make the trader’s life a bit easier and sometimes even more profitable. Here is the list of the advantages of trading Forex with expert advisors:

1. Metatrader Expert Advisors (Mechanical Trading Systems, robots) can be easily installed, do not require any special knowledge, and are widly used by beginners and skilled traders. You can start to trade by means of our Metatrader Expert Advisors in an hour after the purchase.
2. With expert advisors you can trade during the time you can’t trade manually. You can set up an expert advisor to trade for you when you are asleep, when you are away or when you are too busy to be involved in the market. Of course, you can hire someone else to trade for you, when you are away, but that’s rather ineffective decision.
3. All Mechanical Ttrading Systems (Metatrader Expert Advisors) work under control of trading terminal – Metatrader 4, which is free-of-charge.
4. Strict following the trading system is another advantage of the automated Forex trading. If you have a strategy implemented in the expert advisor it will trade according to that strategy without any deviations. If you find it hard to follow your own system without modifying it constantly, try using an EA that would do all the work.
5. Automated trading excludes any emotions form your market behavior. Computers and programs don’t have any emotions and won’t overtrade if they lose. If you are not very good at holding your emotions down, automated trading will definitely help you.
6. You can start to work with Metatrader Åxpert Advisors opening a real account for $1000-3000 or you can begin to work on demo account (Preferable this one if you’re not sure the EA will make income for you or not).
7. Metatrader Expert Advisors can be tested on histories with the greatest possible quality of modelling of 90% on long sites of historical data and are also tested on real accounts.
8. Complicated strategies are not a problem for the expert advisors. For the live trader it’s not an easy task to monitor a dozen of indicators and compare each of them to the entry conditions, whereas expert advisors can do that easily and in no time at all.
9. «Errare humanum est» said the Roman stoic; that means that despite your experience in Forex trading, you’ll make a lot of stupid mistakes through your trading career. Computers are not human, and if programmed without errors, expert advisors won’t make any errors during the trading.
10. There are many things a live trader just can’t do — trading on multiple strategies, timeframes and currency pairs simultaneously is one of them. If you want to use your system on several currency pairs and timeframes — use expert advisor. If you want to test several systems at the same time — also use the expert advisor.
11. The time of reaction, analysis and decision making can be critical in many Forex trading systems. Where manual trader just can’t do it fast enough, automated systems will work fine.
12. While buying Metatrader Expert Advisors you are receiving a free-of-charge and 24/7 support – Different seller have different rules, but most of it this is the one that applied.
13. The seller usually do not take additional money for the updated versions of our Metatrader Åxpert Advisors. All updates are sent for free.

Perhaps, I’ve missed some important advantages here, but this list looks quite impressive to me. Of course, there are certain disadvantages in the automated Forex trading, but they will be a subject of my next post. Please feel free to comment so I can add more.

Disadvantages Of Expert Advisors

I understand that the trading using the expert advisors isn’t always something good. Everything has its own pros and cons; so the automated trading has its own disadvantages and I’ll try to describe them in this article:

1. No intuition to help your trading. Computers and programs simply don’t have anything similar to that mystical human feeling. While some traders don’t think that the intuition can be helpful in trading, others rely on it — such traders probably won’t be pleased with the automated trading.
2. Smooth trade execution and uninterrupted run-time of the expert advisors is critical with many trading systems. Unfortunately, it’s something very hard to achieve running EA from your home or work PC. That means that you’d require some dedicated server to run your automated trading.
3. Expert advisor will never feel like human. Some types of strategies are simply impossible to implement into the real expert advisors. The chart pattern or wave analysis and fundamental analysis are extremely hard to code in the trading program. At the current level of the AI development these tasks are better performed by the live trader manually.
4. Expert advisor will not give better result or be a better trader. The expert advisors should be made quality or otherwise their trading results will disappoint you. Unfortunately, not all expert advisors handle errors and other unexpected events correctly — sometimes this can lead to the huge losses. Moving your working EA from one broker to another can also be a problem, since broker servers differ and what works perfectly on one broker can stop working on another.
5. Waiting for your comments so I can add more to it again.

As you see, nothing is perfect in this world and, while being the extremely interesting and popular tool, automated Forex trading has its own problems.

Nothing is perfect, but we can always strive looking for the best one. Hopefully with this knowledge you get something useful out of this.

If this is too much or too short please let me know, I might custom my articles to your needs if you want to. Thank you for reading this far, I know it ain’t easy to comprehend. Please feel free to ask should you have any difficulty to grasp my article.