The benefits and downfalls of using an Expert Advisor (EA) within your Forex trading are important to consider. For one, using an EA eliminates the human factor. This is both good and bad. It’s good because you no longer have to worry about your emotional or psychological state when trading—the EA does the work before you have a chance to react. This can be bad though if you are trying to preserve capital for another trade, or you just feel uncomfortable with the risk that the EA is taking.
One way to combat this is to select an EA that allows you to adjust the degree of risk. Some EAs can go as low as 1 percent in the risk category. While this might not get you the big trades as often, it will ensure that you are receiving a more steady supply of small profits.
Another pro to using an EA is the fact that it can get a jump on the trades you want to make before you know that you want to make them. Because it is a software program, it can monitor many variables at once and spot potential profits much more quickly than a human can. The reverse of this is also true. EAs can tell when a movement is about to come to an end and can close out the trade when it has reached the appropriate level. A human is often inclined to hold onto trades just a bit too long while trying to squeeze out one last pip. This often spells disaster for greedy traders.
The biggest negative to using an EA is that they are dependent upon your computer. What I mean by this is that it is a piece of software that you run on your computer, not a web program. If your power goes out while in the middle of a trade, there is no way to close the trade at the moment you desire. You will be stuck with an open, and therefore dangerous, trade until your power returns. The only way to avoid this is to have a remote desktop or a Forex virtual private server.