For those who are not familiar with forex EA or have never heard of such a term, EA is the abbreviation of Expert Advisor. It is also commonly known as the forex trading robot.
For a more elaborated explanation of how an EA works, read this article here: https://www.wikifx.com/en/newsdetail/202205247714460204.html
In todays article, WikiFX would like to discuss how a trader could determine whether an EA can be used in live forex trading.
Firstly, it is important to see what type of forex EA is it rather than its profitability and whether it matches the instrument that you are trading. If you are trading gold, but your chosen EA is one for indices, then it is unlikely that this EA could bring optimal performance for you.
Secondly, look at the stop loss size of an EA. Some EA does not even have a stop loss in place, which is the type of Ea that you need to avoid at all costs. A comprehensive calculation of these stop losses will allow you to estimate how much you could lose and whether that is the amount that you could afford to lose.
Thirdly, look at the performance curve of an EA. If the performance curve is smooth, it means the EA has always been performing consistently. On the flip side, if it has huge ups and downs, it means that the trading result will fluctuate heavily too. If you are looking to install an EA to make trading stress-free, this is not the appropriate EA for you.
This is an example of a performance curve.
In addition, evaluate the risk-to-reward (RR) ratio of an EA. The calculation should be reasonable to generate consistent profit passively. If an EA only generates a 10% profit monthly but could have an unrealized loss of 40%, this is not a trustworthy EA. Do not be blinded by the sum of profits but the main focus should be on the RR - it should be at least 1:1 or 1:2.
Lastly, review the source of the EA. It is better to choose an EA that is developed by an established and reputable company rather than purchase it from some unknown sources.
If you are interested in trying EA for the first time, or you are looking to switch to a new EA, WikiFX has a surprise for you. Check out our free EA giveaway! You only need to complete a few simple steps, then you can bring home an EA that could help you generate passive income.
For more details, read here: https://www.wikifx.com/en/newsdetail/202207293474384322.html
