expert advisor not working

Expert advisor not working and how to fix it

Expert advisor not working and how to fix it

Expert advisor not working? Now that can be pretty annoying. Don’t panic, we will give you a full tutorial of how to fix this issue. That is if the script has no errors. You will see that many issues with your expert advisor are easily fixed. Just follow the steps below.

Is your MT4 terminal connected?

Make sure that your trading terminal is connected to the internet. Check the icon in the bottom right corner of your platform and see if it changes (live connection) 

expert advisor not working

Is autotrading enabled?

To start your expert advisor in autotrading mode, enable this clicking the button in the main menu. It should turn green.

expert advisor not working

Did you enable "live trading allowed" in the EA's settings?

Is Live trading enabled? You can find this after you drag and drop the EA into the chart section and click the “Common” button in the top menu of that field. Or once your EA is already dragged and dropped, click the little smiley icon in the top right corner to check your settings.

expert advisor not working

 

 

Do your see the icon "smiling"?

In the top right corner the smiley icon should have a happy face. 

expert advisor not working

 

DNL settings

In your settings you can tick the box for “Allow DNL imports”.expert advisor not working

 

Expert advisor settings (inputs)

Many expert advisors come with numerous settings (set files) that can be adjusted. Make sure you check the setting for the spread and slippage and other imputs. For example if the max Spread is 2 pips, you will not see a trade in a GBPNZD pair since that spread is typically wider.

Check the Magic number

Pretty much all EA’s are coded with a so called “Magic number”. This number allows the EA to run on multiple charts (pairs) without getting confused. Usually this is a 5 digit random number which you can type in the EA settings. 

Check the Journal for error reports

In the bottom section of your trading terminal you will find the expert and journal tabs. Click on them to see if you see any errors. Your programmers might want these files to check.

expert advisor not working

Common error codes are:

Error code 130 (ERR_INVALID_STOPS): This indicates your StopLoss or TakeProfit value isn’t valid. Check them and make sure they are large enough.

Error code 131 (ERR_INVALID_TRADE_VOLUME): This means your Lot value isn’t valid.

Error code 133 (ERR_TRADE_DISABLED): Autotrading isn’t enabled in your MT4 platform.

You might want to contact your programmer in case you don’t know how to fix this. 

Expert advisor activation key

Many Expert Advisors come with an activation key. Make sure you entered the correct key. 

Currency pair extensions

For some reason most forex brokers use various extensions for showing all currency pairs. For example; EURUSD will look like EURUSD.c . This “.c” extension might confuse your EA. Its very simple for a programmer to fix this.  

Buy and Sell order at the same time

If this occurs your broker is probably located in the United States. Reason why this is a problem is because of regulations that forbid to go long and short at the same time. This is important to know before you want to trade with a grid trading robot using this method. 

Allow webrequest

Some EAs require to enable “allow webrequest” or “allow DLL imports” which you can find in the top menu under options >> expert advisors

expert advisor not working

Missing file message

If you purchase an EA on the internet, make sure to check if you downloaded the complete .ex file including library ordll files. Without these files your robot will not work. Another thing to check is to see if the file is located in the correct folder. For examle, an indicator should be stored in the indicator folder and not in the expert folder.  

Broker server issues

If your forex broker server is offline, contact your broker to ask them to have a look and reboot their server as soon as possible. If it happens often, you might want to switch broker.   

 

Remove the Expert Advisor and reinstall on your computer

If you checked all possible issues, try to remove your EA from the terminal. Right click on the little smily icon and follow the steps. 

expert advisor remove

Or watch this video

 

Still not fixed?

Contact your programmer and see if he can help you. Worst case scenario is that you bought a toxic file that will never work. So be careful where to buy an expert advisor online. If you see an interesting EA you can always contact us to have a look and see if it is not a scam robot.   

Test a strategy risk free!

Every week we start with new algorithmic trading strategies that you can copy in a demo account

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Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

payment for order flow

Why payment for order flow should be banned

Why payment for order flow should be banned

Payment for order flow was not common knowledge for most stock traders. Until we saw the 2021 GME short squeeze. GME went from $5 to $400 in a matter of weeks. All of a sudden retail traders realized that their broker is not their friend. 80% of trading took place in Dark Pools where nobody has access to, other then banks and institutions. Thanks to the huge efforts of Reddit forum member and You tubers, PFOF is a toxic and the rumour is that it will be banned soon. 

What exactly is payment for order flow?

Payment for order flow is the compensation that brokerage firms receive by routing orders to different avenues for trade execution. The firm usually receives a small payment, which could be fractions of a penny per share, for directing orders to different market makers. This practice is much more prevalent in options trades since there are thousands of possible contracts in existence. PFOF has been in existence since at least the 1990s.

Many brokers chose the zero commission model where they offer trading “for free” in return for huge payments for sending their order flow to a market maker first. Robin Hood is a good example of a “zero commission” broker. 

What is a market maker?

Market makers are typically electronic trading firms. They buy and sell shares all day long, trying to profit from the bid-ask spreads. The market maker profits can execute trades from their own inventory or in the market. Offering quotes and bidding on both sides of the market helps to keep markets liquid.

Market makers that execute retail orders are also called wholesalers. The money that market makers collect from PFOF is usually fractions of a cent on each share, but these are reliable profits that can turn into hundreds of millions in revenue a year. In recent years, a number of firms have exited or sold their wholesaling businesses, leaving just a handful of electronic trading firms that handle PFOF.

In addition to profits from stock spreads, the orders from brokerage firms give market makers valuable market data on retail trading flows. They know exactly where a buy or sell range is by simply looking at all the limit orders.  When it comes to using institutional or retail investors, market makers also prefer trading with the latter because larger market players like hedge funds can trade many shares at once. This can cause big shifts in prices, hitting market makers with losses.

Market makers getting richer and richer

Equity and options trading has become increasingly complex with the rise of exchanges and electronic communication networks (ECNs) What is extra ironic is that payment for order flow is a practice pioneered by Bernard Madoff , the world’s most famous Ponzi scheme artist.

The Securities and Exchange Commission (SEC), currently led by Gary Gensler said, in a special study on PFOF published in December 2000, “Payment for order flow is a method of transferring some of the trading profits from market making to the brokers that route customer orders to specialists for execution.” How wrong could they be?

 

Given the complexity of executing orders on thousands of stocks that can be traded on multiple exchanges, the practice of being a market maker has grown over the last decades. Institutions are always looking for ways to trade risk free.

payment for order flow citadel1

Probably the most famous (notorious) Market maker must be Citadel. Hated by the so called “Ape army” who are led by guys like you and me, craving for deep intel and sharing this information via numerous platforms, such as Reddit, Twitter and Youtube. 

Greed blossoms everywhere and Bloomberg reports that Citadel Securities doubled revenues to a record $6.7bn last year, and made a record $4.1bn in earnings before interest, taxes, depreciation and amortization. 

How does payment for order flow work?

See the image below where it explains how payment for order flow works. As you can see, your order is NOT going to exchange before it hits the server of a market maker.

Typically these market makers use complex trading algorithms to manage the flow. How cute to know exactly what price you are willing to buy a stock where a trading algo tries to find the stock for a better price and fills you for you limit. A 100% risk free trade for a market maker. This is just one example of how this business model is so popular amongst the bankers and hedgies. 

Hopefully you will think again before trading with a broker that offers commission free trading. These brokers are NOT your friend. They just facilitate a very toxic way of making money at your expense. 

In the United States, accepting PFOF is only allowed if no other exchange is quoting a better price on the National Market System. The broker must disclose to the client that it accepts PFOF. Transactions must be executed at the best execution, which could mean the best price available or the speediest execution available.

How to prevent your orders from going to market makers first?

Actually this is rather simple.

First you can of course opt for a broker that does not support the so called PFOF model. Examples are Fidelity and Interactive Brokers. Although with interactive brokers you should disable the order routing. 

Another way to send your order directly to the exchange (Lit Exchange), many brokers offer you a feature to enable or  disable this. 

Conclusion

In the last decade many brokers to adopt the payment for order flow business structure. Due to low commissions its pretty much a no brainer. PFOF is now a major revenue source for brokers. 

For the retail investor, though, the problem with payment for order flow is that the brokerage might be routing orders to a particular market maker for their own benefit, and not in the investor’s best interest.

Investors who rarely trade or trade with very small quantities may not feel the effects of their broker ’s PFOF practices. But day traders and those who trade larger quantities should learn more about their broker’s order routing system to make sure that they’re not losing out on price improvement due to a broker prioritizing payment for order flow.

We hope the US will follow Canada and or the UK where PFOF is banned. Europe is already discussing a ban and it’s expected to be approved. Many brokers lost their focus on their mission, which is to always give the best price to their clients. 

Test a strategy risk free!

Every week we start with new algorithmic trading strategies that you can copy in a demo account

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Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

bear market

How to trade a bear market

How to trade a bear market

A bear market is probably the greatest fear for stock traders. We all remember the images from investors or traders in 1973–1975, 2000–2002 and 2008 who just lost half of their money or worse. Although bear markets occur much less than bull markets it might be good idea to be prepared for the worst, since strong market corrections always happen when you least expect it.  

What is a bear market?

A bear market is when stock prices are declining and market sentiment is pessimistic. Generally, a bear market occurs when a broad market index falls by 20% or more over at least a two-month period.

Since 1930 there have been many market corrections but only eight bear markets. Historically, bear markets last shorter than bull markets as shown on the chart below.

bear market

〉〉 The average bull market period lasted 9.1 years with an average cumulative return of 476%.
〉〉 The average bear market period lasted 1.4 years with an average cumulative loss of -41%.

Many investors prefer to look at the S&P500 index as to warn them if markets are turning bearish.

 

What are the other types of downward markets?

There are four types of a downward market, and this is how they differ from a bear market.

Market pullbacks or retracements. This is a temporary reversal in the movement of share prices. A downtrend can be seen when a share price moves lower following a recent uptrend. A retracement doesn’t mean much since it happens all the time. It can be profit taking or covering a long or short position. There are technical indicators to determine whether it is a reversal or the start of something more.

Reversals. A reversal is a turnaround in the price movement of a share or other asset, when an uptrend becomes a downtrend. The period of decline is longer than a market pull back.

Market corrections. This is a 10% decline in the price of a share or index from a 52-week high. It is called a correction because it is sign that companies are currently overvalued, mostly due to speculation. A market correction is considered a good thing, since it releases market pressure and reduces the “hype”.

Recession. A recession is a complete economic decline that takes place over a six-month period or longer. During a recession stock prices will suffer too as businesses earnings are impacted.

 

How to spot if a market correction turns into a bear market?

Below some of the indicators that Bank of America uses to spot if the market trend turns bearish.

  1. Federal Reserve raising interest rates
  2. Tightening credit conditions
  3. Minimum returns in the last 12 months of a bull market have been 11%
  4. Minimum returns in the last 24 months of a bull market have been 30%
  5. Low quality stocks outperform high quality stocks (over six months)
  6. Momentum stocks outperforming (over six to 12 months)
  7. Growth stocks outperforming (over six to 12 months)
  8. 5% pullback in stocks over the last year
  9. Stocks with low price-to-earnings ratio underperform
  10. Conference Board’s consumer confidence level has not hit 100 within 24 months
  11. Conference Board’s percentage expecting stocks go higher
  12. Lack of reward for earnings beats
  13. Sell side indicator, a contrarian measure of sell side equity optimism
  14. Bank of America Fund Manger Survey shows high levels of cash
  15. Inverted yield curve
  16. Change in long-term growth expectations
 
I like to always keep a close eye on tightening credit conditions, which occurs when it becomes harder to borrow money from the bank. In times of uncertainty or an economic slowdown, banks will tighten their lending taps to hedge for risk. Each of the last three bear markets started when a positive percentage of banks tightened lending standards. A recent Fed survey showed banks expected credit standards to tighten this year.
 

What can I trade in declining markets?

Price declines are not the end of the world. Therefore it’s highly recommend to increase your knowledge about what asset classes to trade if markets turn bearish. Below a few of our picks:

Put options

A put option is an option contract that gives the buyer the right, but not the obligation, to sell the underlying security at a specified price (also known as strike price) before or at a predetermined expiration date. It is one of the two main types of options, the other type being a call option. Put options are traded on various underlying assets such as stocks, currencies, and commodities. They protect against the decline in the price of such assets below a specific price. Although it can be used to protect (hedge) your portfolio, options are considered to be a complex product. So make sure you understand how they work before start trading them. 

Buy ETF’s

An exchange-traded fund, or ETF, is a fund that can be traded on an exchange like a stock, meaning it can be bought and sold throughout the day. ETFs often have lower fees than other types of funds. Depending on the type, ETFs have varying levels of risk. Some ETF’s aim to gain value in declining markets. A few examples are 

ProShares UltraPro Short QQQ
ProShares UltraPro Short S&P500
ProShares UltraShort S&P500

Short index futures

Futures contracts, or futures, are legal agreements to either buy or sell a given security, commodity, index or asset at a specific time in the future, for a previously agreed-upon price. For investors, they offer access to commodities and other markets they might not be able to access otherwise.

Futures are a popular way to hedge bearish markets. By selling an S&P500 index future (ticker:ES) you will earn if the index declines. Downside of a future is that the contract sizes are rather large and you need to have a pretty large account in order to use this asset class for hedging. 

Algo trading

We wouldn’t be taken seriously if we would mention this interesting play during market declines. Reason be, robots trade long and short not to mention in very liquid asset classes. Although we mainly focus on forex robots, we also offer algorithmic strategies for other cfd’s, such as indices, stocks and commodities. Biggest advantage of using a trading bot is that it goes short without being affected by any kind of emotion. Since shorting is a complex game plan, you might as well give it a go with a trading bot. 

Find good stocks to buy

In a bear market, the stocks of both good and bad companies tend to go down. But bad stocks tend to stay down, while good stocks recover and get back on the growth track.

Conclusion

It’s hard to prevent your portfolio from being affected due to a market crash, correction or pull back. A bear market is a bit easier to detect, since many indicators as well as the media will start to send warning signals. Selling all your stocks is not a good idea,  since you will lose dividend payments and your money will be exposed to inflation. If we had to pick we would opt for any of the given options in this article whereas ETF’s are probably the lesser risky choice. As algorithmic trading crusaders we invite you to test one or strategies to see how they behave during any market condition.  

Test a strategy risk free!

Every week we start with new algorithmic trading strategies that you can copy in a demo account

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Legal
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Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

crypto trading bot

How to create a crypto trading bot

How to create a crypto trading bot

A Crypto trading bot is a hot item at this moment. Everybody is looking for this “Holy Grail” trading bot to gain wealth in a short period of time. Why are these trading bots so popular and how are they created? In this article we describe the steps that it takes to create a crypto trading bot. 

What exactly is a crypto trading bot

A crypto trading bot is automated software designed to monitor, analyze and execute trades across cryptocurrency exchanges using predetermined inputs.

Cryptocurrency trading bots often use artificial intelligence and machine learning to observe the market and automatically execute cryptocurrency trades in line with rule based algorithms.

Ideally, the bot generates a larger profit that is greater than if you would use a buy hold strategy. Since day trading any asset class is time consuming, people prefer to use bots to do their heavy lifting. It’s not all about huge profits, but more about good risk reward trade entries with proper risk management at mind. 

Advantages of using a crypto bot

Advantages

1. It trades 24 hours per day.

2. Is saves loads of time and agony. No more screen time all day.

3. It trades without emotions such as fear and greed.

4. Robots are easy to configure.

5. Robots can anyalise data or prices much faster than humans.

6. To trade with a crypt trading robot you don’t need any experience.

7. All trading is rule based sort of like a professional trading plan.

8. With a robot it is very easy to trade multiple crypto currencies simultaneously. 

Disadvantages

1. To trade a robot your trading terminal needs to be ON constantly. For this its recommended to you a Virtual Private Sever (VPS) which will cost around $10 monthly.

2. Robots do not have an eternal life span. Software is coded based on historical data. This means that if market conditions change so does the sript. Unfortunately if this happens you most likely will be too late.

3. A robot does not read the news. Therefore its always recommended to keep an eye on the market and not getting exposed in high volatile markets

4. In crypto it’s very hard to use economical indicators that might give you an edge whilst trading. For example; how does a FED rate hike influence the price. In Forex or Stocks it’s rather predictable, but not in Crypto. Thereofore we strongly recommend to either use a buy hold strategy or an intraday trading strategy. 

What steps to take

Although it sounds tempting to create a trading bot, make no mistake, since its definitely not an easy task. You need at least a good knowledge of trading and indicators in order to come up with a trading plan that can be profitable.

Therefore it’s recommended for newbies to not even think about this route and opt for an existing trading bot. There are many out there you can test to see if you like the concept of automated trading.

Create a trading idea/plan where you write down all trading rules.

Pick you programming language such as Pearl, C , Python or Javascript. 

Select your preferred crypto platform where you wish to run your trading bot. For example bybit.com 

Collect the API from your selected platform. For examply: Bybit API

Code your trading script ( you can use a professional programmer for this).

Debug your strategy. This part is most likely the most important part. Many trading bots are buggy and therefore you need to be absolutely sure your bot is bug free. Best to first back test it and then run the trading bot in a paper account. If this all works according to your preset rules, you are good to go and try it in a real account. 

crypto trading bot

What is an API

API stands for Application Programming Interface. Generally, a trading API is an interface that allows two unrelated systems to interact with each other, to allow a third party API platform to connect with Bybit’s to execute trading orders. 

On the other hand, the importance of having API documentation specifies the way that each of the two systems interacts with the API itself, to function. 

Understanding and using a trading API can allow traders to execute trades on their behalf, at the pre-set price and conditions. On Bybit, our API enables users to interact with our exchange programmatically, allowing you to check onto market data, process automated trading orders, manage accounts, and more. 

Conclusion

Do robots work? Absolutely! But, one needs to understand that Holy Grails only do not exist in trading. Creating your own piece of trading software is definitely a good idea, however the learning curve is steep. We like crypto bots a lot, but as experienced traders we dislike the lack of economical indicators. For that reason we like to trade with a crypto futures robot, that has more pivot points for entries. For example, these futers are traded on one exchange and that makes it all a lot easier. 

Best to simply test a crypto trading bot first. There are numerous bots available in a demo environment to trade and this is the safest way of finding out if robot trading is for you. 

Test a strategy risk free!

Every week we start with new algorithmic trading strategies that you can copy in a demo account

Company
Legal
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  • +31614599248
  • Keizersgracht 241 Amsterdam The Netherlands

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

stop loss hunting

Stop loss hunting and how to deal with it

Stop loss hunting and how to deal with it

Stop loss hunting happens every day and most traders are not aware of how this exactly works. Most liquidity providers and some brokers use software to hunt stops and this is a very lucrative business scheme. Since brokers promote using a stop loss, they know exactly where you want to take a profit or a loss . In this article I will describe how and when stop loss hunting occurs and how to deal with it. 

What exactly is stop loss hunting?

First you need to understand the difference between stop loss hunting and market manipulation. They are often mixed up. Price manipulation as we know it, is done by institutions and not by brokers.

For example; If a hedgefund wants to buy EUR against the dollar, they try to buy them at the best possible price. The lower the price the better it is. Their dealers will calculate what it will cost to lower the price with 50 pips. If they want to do a 5Bn trade, it’s a good bargain to drop the price with only 500Mio. Since they can see the bids and asks they know when to enter the market and let their algos do the lower bidding. This part is hated by all retail traders desperately clinging to their stop loss orders. Now the price will start to spike down after after which it will spike up and will most likely continue to go up.  

stop loss hunting buy zone

This so called “buy or sell zone” is what many daytraders use to their advantage. Some indicators can be useful to spot these buying or selling zones. Unfortunately one will never be sure if the spike is indeed due to manipulation or if it is a whale going short. 

Market manipulation, though toxic, is something all traders need to deal with. Stop loss hunting on the other hand is a malicious practice done by dodgy brokers / liquidity providers to turn your trades into losses. 

So please share this article with your friends, the more people are aware the better it is.

How is it done?

How many times were you looking at a trade that got stopped out after which the market went back into green territory. But.. your stop was already hit. So bloody annoying!

Since the cfd market are not traded through an exchange you will always depend of the price feed provided by your liquidity prover / broker. The most common practice to hunt your stop loss is by simply widening the spread. 

For example;

Look at the chart below and notice the spike below the red arrow. As you can see, 2 contracts long Gold were stopped out. 

stop loss hunting explained

The spike did clearly NOT hit the stop loss level. However, the broker stated that this happened due to the “Asking Price” at market opening. The spike only shows the “Bid Price” and not the “Ask Price”. Basically this means that brokers or LPs can give any price feed at their convenience. Don’t forget, they can SEE where your stops are placed!

The most popular timing for this procedure would be at or just after market close or at market opening (Sunday night). This is one of the main reasons to use an ECN account where you can at least check the bid and the ask price. Choose your forex broker wisely!

When does it occur?

Although it typically happens at or after market close or at market opening stop loss hunting can still very well occur during the day. Liquidity providers as well as brokers use software to make the job effortless. Every time your stop loss is near the current price, they simply widen the spread. 

How can I recognize stop loss hunting?

It’s very hard to detect stop loss hunting. Since brokers don’t do it constantly, but only when it pays off. For example, a big level is a nice spot to take free money. EURUSD breaks 1.1300 on the way down, thats where many stops will be located. 

I usually video tape the tick chart and try to spot fast moving prices where I have another platform from a different broker open as well. If I detect a difference I report this with my broker. It might happen some brokers repay you some money avoiding bad publicity. Bottom line: if you see it happening, switch your brokers asap!

How to avoid it?

You can never really avoid this from happening. Liquidity providers have much better tools to play around with. 

What is important is how to use a stop loss and where to place it. Also, consider to always close your position at least one hour before market close. 

How to place your stop loss to avoid stop hunting

  1. Don’t place your stop loss close to support or support levels (H1 or higher time frame)
  2. Don’t trade or place your stop loss too tight during news events.
  3. If you risk more than 10% of your account when using a 50 pips stop loss, trade with smaller lot sizes. 

Let assume you trade Gold. If you are long at $1805 and your stop loss is placed at $1800, you can be sure that your stop will be hit overnight. A $5 widening of the spread at market opening is nothing for an LP. Therefore better put your stop much lower around $1790. If this means your risk reward ratio is bad, then.. don’t make the trade at all. 

Another option is to use a forex robot that hides your stop loss and take profit levels. Its a very useful trading tool In case you are interested in this software, feel free to contact us. 

Test a strategy risk free!

Every week we start with new algorithmic trading strategies that you can copy in a demo account.

Company
Legal
As seen in

   

  • +31614599248
  • Keizersgracht 241 Amsterdam The Netherlands

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

how to choose a forex broker

How to choose a forex broker

How to choose a forex broker

Forex broker wanted! Sounds easy, but how to select the right one for you? Choosing a forex broker is a time consuming matter and moreover a hassle. You know it’s important, but all forex brokers look the same so where to look out for. In this article we will explain where to pay attention to and how a broker looks like “under the hood”. 

Why do I need a forex broker?

Whenever you trade, your orders will be send to either an exchange or, like in cfd trading to a liquidity provider. To have access to this liquidity for several asset classes you need a broker. It’s like a market place where your buy order always finds a seller. A broker is “the middle man” and sends your order to a liquidity provider (banks and spv’s). Another reason why broker are needed is the leverage at which you can trade. Forex brokers allow you to trade with a leverage, giving the opportunity to trade 30x or even 500x your initial investment. With only $1000 you can move $500K in the market.

 

How important is regulation?

Regulation is one of the most important aspects that needs to be verified. Without a decent regulation, your money is at instant risk. For example if your broker is located on a sunny island, you can already tell that regulators are not as organized as when the broker is located in London or Frankfurt. Things like money withdrawals, trustworthy banks, stop hunting are all matters you have to consider in case you would opt for such a broker. 

I am not saying all those exotic island brokers are bad, but fact is, they are there for a reason and have more “freedom” than a European or UK regulated broker. The #1 reason why many brokers offer an off shore route has to do with the fact that in Europe the maximum leverage they can offer is 1:30. And that rule made most brokers decide to have an off shore brokerage service. Looking at the huge numbers of high leveraged traders, it appears that these brokers are right…traders just love high leverage.  

Spreads and commissions

For any trader, the costs are an important factor. Thus yes, fees are relevant. However, most brokers offer the similar commissions and spreads. Because many brokers use the same liquidity providers it looks like there is not much difference. However, whatever a broker advocates, it’s not always what you get. Especially a fast execution is extremely important, something that is hard to check. 

We like to believe that a $10 fee for a standard lot is more than enough for brokers to still make a buck. That results in a 0.10 pip all in spread or $8 round turn in a raw ecn account. For smaller accounts the fees could a bit higher as well.  

Bear in mind that if you are introduced to a broker the spreads might be slightly higher. 

 

ECN, STP or Market Maker

Some years ago forex brokers introduced the “raw ECN account”. At that time something new, since pretty much all brokers at that time were market maker thus took the other side of your trade. 

So what is the difference between these broker models?

Market maker

A market maker will always take the other side of your trade. They are your counterpart. This means that the spread you will see on your screen is fixed. Many brokers like this model since it allows them to advertise with “trading at zero costs”, which in fact is not true. 

A market maker employs risk managers, who are dealing with a lot of stress. After all, they have to decide whether your trade needs to hedged or not. Common practice is “netting” which means that at each day only the nett long positions or nett short positions will be hedged. For example, if there are 1200 contracts long the EURUSD and 1000 short, the risk manager could then hedge 200 longs. 

Thats why regulation is so important since brokers need to always check if their solvability is complying with the rules. If you trade with an off shore market maker there is a reasonable chance that in case of bankruptcy, you will not see your money back. Chances that this will happen are much higher because the local regulators simply check these companies rarely. 

All and all it always looks funny when a counterpart broker offers their clients trade schools and academies knowing they only benefit from their clients losses. 

Whats positive about this type of brokers is that you can trade micro or even nano lot sizes. This allows you to trade in a live account with just a few bucks. Still, be aware that a lot of these brokers are not there for your interest!

ECN / STP

An ECN broker connects traders straight to liquidity providers (Banks or hedge funds, institutions). For doing so traders are charged a commission per trade. A big difference is that trading in an ECN account you will be able to see the bid and ask prices.

forex broker ecn

If  your are trading with let’s say a few hundred dollars I don’t think it will much of a difference. The moment you start be a more experienced trader with larger trading volumes or you prefer to trade with forex robots, then an ECN account is  the most obvious to select. 

Deposit and withdrawal fees

Simply put, do not pay for any withdrawal or deposit. In case a broker does charge for it, you could do a wire transfer. By choosing a broker you could test the speed of withdrawing money from your account. Just make a  withdraw request and see how long it takes. 

Lot size

Many online forex brokers offer different account types ranging from standard accounts, to mini accounts, to micro accounts. The size of the account depends on the lots that you wish to trade.

Basically you can trade with 3 different lot sizes;

  1. A standard lot is a lot that consists of 100,000 units of the base currency
  2. A mini lot consists of 10,000 units of the base currency
  3. A micro lot consists of 1000 units of the base currency.

Which trading platform should I use

In cfd trading the most popular trading platform is undisputable the Metatrader 4 terminal aka MT4. It’s younger version is the MT5 platform but still did not surpass it’s younger sisters popularity. Another platform that can be used is cTrader which is also compatible with many brokers. 

Some brokers such as Saxobank opted to offer their own trading terminal. 

For new traders the MT4 platform is probably the best choice. Simply because its very easy to understand and therefore it has a short learning curve. There are enough indicators at your disposal, it has a great EA market place and charting is pretty much ok. 

A trading platform always comes for free once you open an account with a broker. All platforms do offer a trading app which makes trading easy on the go. 

What leverage

Leverage is one of the main reasons traders lose money over time. My advise is to be very careful with using a high leverage, since markets only need a little volatility for your account to blow up. The most used  leverage is 1:400 but can only be offered via an offshore route. I think it’s fair to say that a 1:30 leverage is the best way to start trading with. It’s less risky and because of a lower leverage traders tend to lose less. 

Clearly if you are an experienced trader, a higher leverage does not necessarily mean a larger risk as long as you know what you are doing. Furthermore, a higher leverage also means that profits can be substantially higher.  

If you are a new trader, it’s recommended to opt for a 1:30 leverage. Firstly you can trade with an EU regulated broker and also your risk factor will be lower. 

Customer Support

Customer support is for some traders the most important variable to choose a forex broker. I trade with over 7 brokers and I have to say that support I am receiving is similar. Due to sophisticated CRM systems, brokers managed to automate their support. 

But, in case you want to see tick data or perhaps a question about a stop loss that was hit, it could take more time for a broker to respond. 

I always like it when I see a name showing below an email including a direct phone number and address. Problem is often that the larger the broker is, the longer it takes to get a response. For example, try to get help from a chat operator, could take over 30 minutes!

For me personally support is not a big deal. Trading with MT4 is stable so no technical issues occur and for trading advise your broker is probably the last person to contact. 

Conclusion

By choosing a forex broker just use your common sense. Things like regulation and withdraw policies are the most important factors to consider. Check out some independant review websites such as trustpilot and see how other people share their trading experience with a forex broker. Make sure you check if the review looks genuine since many of these reviews are fake. Welcome to the internet era..

forex broker review

In case you are new to forex and you are looking for a broker, you can always contact us where we will try to help you make a good choice.  

Test a strategy risk free!

Every week we start with new algorithmic trading strategies that you can copy in a demo account

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Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

forex robots

Do forex robots work – 5 tips before you start

Do forex robots work – 5 tips before you start

Do forex robots really work? The million dollar question! Many forex traders are desperately looking for quick profits and think forex robots can help them. But which one works and where to purchase it. In this article we will try to help you making a smart choice. 

What are forex robots

A Forex robot or Expert Advisor (EA) is a computer program that opens and closes trades in a forex trading account fully automated. The trading software uses data from a trading platform like MT4 or MT5 and calculates when it should enter or exit the market. A robot is always based on rule based trading. The big pro of automated trading is the fact you completely rule out any emotions, one of the key reasons why retail traders lose money. Most forex robots can be adjusted in terms of parameteres such as take profit, stop loss and lot size. The typical programming language in which forex robots are programmed is MQL language, developed by Metaquotes (Metatrader 4). Other popular programming languages are Python, Pinescript and cAlgo. 

Where can I find a well performing robot?

There must be hundreds of Forex websites that offer trading robots. The general idea you get after visiting one of these sites is “it looks too good to be true”. Profits of 1000% in a month are unfotunately not rare. As if anyone would even consider to sell a forex robot like that!

Seriously, if it looks too good to be true, it probably is..

We recommend the MQL market place where you can find thousands of Expert Advisors. Prices vary from $0 to $10.000. What is interesting in this market place are the comments by its users/buyers. This will give you a pretty good idea of how the Expert Advisor works. 

We found some other interesting forex robots / trade managers, go have a visit;

www.scalprobot.com
www.metagrid.com

In case you like to purchase a robot from the internet, make 100% sure that the reseller is showing verified data. Demo track records or live records from dodgy brokers will only cost you money. 

Which types of forex robots are there?

There are a few types of popular types of forex robots.

> grid trading robot
> price action robot
> trend trading robot
> scalping robot
> swing trading robot

Since forex traders love some action, the grid trading robots are by far the most popular. Once installed and running on an M1 chart the chance is big you will see  the first trades popping up. They typically trade often and enter buy and sell order in the same pair at the same time (hedging). Disadvantage is that these robots keep on trading and like to add to open positions sometimes with an increasing lot size (Martingale). 

The price action robots are more sophisticated to manage yourself. These strategy try to enter trades is prices are moving either up or down. Very suitable to use these bots during news events. To trade a price action bot in full auto mode can be  tricky, since its hard to tell (calculate) if price action is real or fake.  We do have a free for testing price action ea, so feel free to try it!

A trend trading bot is not too useful in my opinion. The usually trade not so often and you don’t need a bot to determine the trend.

Scalping trading robots are very popular and we recently added one in our market place. If you like to trade very short term and aim for small profits then scalping is your thing. These bots try to minimize market exposure by taking very small profits in a very short period. 

Swing trading is very common amang stock traders. Usually driven by moving averages they try to “ride the waves” of the market and enter when markets retrace of pull back. We do have a very well performing swing trading robot in our market place, feel free to have a look. 

How do I create a forex robot?

To create a forex robot you need to have programming skills. Since the learning curve is rather long, we recommend to pay a vist to either the MQL website or fiverr.com where many EA developers offer their service. Since most forex traders use the MT4 or MT5 trading platform the computer language being used is called MQL. Its a stable language and offers all you need to create your own automated trading strategy. The avereage price for creating a forex robot is between $200 and $500. Make sure you test the strategy in the strategy tester of your trading platform, since many developers do not check the EA for bugs. 

Pros and cons of forex robots.

Advantages

1. It trades 24 hours per day.

2. Is saves loads of time and agony. No more screen time all day.

3. It trades without emotions such as fear and greed. 

4. Robots are easy to configure. 

5. Forex Robots can anyalise data or prices much faster than humans.

6. To trade with forex robots you don’t need any experience. 

7. All trading is rule based sort of like a professional trading plan. 

8. With a forex robot it is very easy to trade multiple currency pairs at the same time. 

Disadvantages

1. To trade a robot your trading terminal needs to be ON constantly. For this its recommended to you a Virtual Private Sever (VPS) which will cost around $10 monthly. 

2. Robots do not have an eternal life span. Software is coded based on historical data. This means that if market conditions change so does the sript. Unfortunately if this happens you most likely will be too late. 

3. A robot does not read the news. Therefore its always recommended to keep an eye on the market and not getting exposed in high volatile markets (such as the Brexit for example).

4. Too many scammers are active in the EA market, which makes it hard to find good robots. To create a robot will cost you time dearly and for this you need to have trading experience. 

I want to buy a forex robot, now what?

I don’t like to disappoint you, but 95% of all forex robots out there will not generate any consistent profits for you. In other words,  they suck and will only cost you money. Just ask yourself, why would someone sell a piece of software if it achieves 100% monthly profits? Exactly, it is ridiculous. 

Now many EA developers still have good intentions, however the trading rules on which they based their strategy can be considered toxic. We call them Martingale strategies, meaning they will probably blow up your account over time. I’d like to point out that robot trading absolutely beats manual trading, however one should consider a robot more like a trading tool to make trading easier and faster. Managing your forex robot will always be the case!

If you still decide to purchase a robot, make absolutely clear that the reseller shows you verified and live trading results. Login details of a trading account are also helpful to study the EA’s performance. 

Is my broker choice relevant for using forex robots?

Definitely! You want a broker that we call EA friendly. This means it offers true ECN and does not widen spreads at their convenience. How to choose a forex broker is not easy and needs your attention since it can make a day or night difference.  

5 tips before starting to use forex robots

  1. Make sure your broker is EA friendly (good execution and spreads).
  2. Always test a forex robot in the strategy tester or in a demo account.
  3. Do your due dilligence before purchasing a robot from the internet.
  4. Find a good VPS provider that offers 99.9% uptime.
  5. Never ever believe a back test that you see.

How to start with using a forex robot 

Why is it that so many robot users still find it difficult to make consistent profits. The answer is simple; their perception of a trading bot is wrong. A bot is not a plug and play device and needs to be monitored. Therefore one should consider to start with a semi automated forex robot. It’s a lot easier to set up and you don’t need a VPS. The advantage is that you prevent from trading during the night and thus you have less risk exposure. 

Markets change constantly but the code written by the robot developer not. This means that you should always consider to change the parameters or inputs while using the bot. In case you are interested in such a strategy you can try it in a demo for free by clicking here.

Conclusion

Although we are strong believers in algorithmic trading, we also believe that an algo (EA) performs better when it’s being managed by it’s developer. Therefore we do think that most forex robots aka Expert Advisors purchased on the internet will not work. A semi automated bot is absolutely worth a try. If you are interested in algorithimic trading, feel free to sign up for a free trial and see how it performs. 

Test a strategy risk free!

Every week we start with new algorithmic trading strategies that you can copy in a demo account.

Company
Legal
As seen in

   

  • +31614599248
  • Keizersgracht 241 Amsterdam The Netherlands

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.