For traders who want to develop their own expert advisors, there are plenty of excellent options. Two of the most common choices include using one of the popular languages associated with MetaTrader platforms, namely MQL4 and MQL5. These programming utilities are quite different, each one having started out with very dissimilar products, MT4 and MT5. However, even though there’s no current updating of the MT4 language by the company, it is still possible to write customized code and build your own expert advisor in either environment.
Discussion forums and chat rooms are full of those who want to figure out whether there’s an advantage to starting with one language or the other. Additional popular topics of conversation focus on the many pros and cons of expert advisors and what the best tips are for building them. Active traders who want to delve more deeply into the topic should review the general facts about MT4’s and MT5’s use of expert advisors, the various upsides and downsides of using coded trading apps, and suggestions for getting the most out of a particular expert advisor. Here’s how to get started.
MT4 or MT5 for Creators
For more than a decade, metatrader 4 has been one of the go-to platforms for forex investors. The introduction of MT5, along with a long list of additional features and a different programming language, meant that users could choose to write an expert advisor in one or the other environment. While the MT4 language MQL4 is easier to learn, the company behind the software is no longer releasing updates or MT4-specific language upgrades. That means newcomers to the systems will likely start out with MQL5, build their advisors under its auspices, and later transfer them to an MT4 system if they so desire.
Pros & Cons of Expert Advisors in Both MQL Versions
Expert advisors come with a long list of positive and negative points, which most regular investors are well-acquainted with. However, financial media discussions on the topic tend to over-emphasize one or another aspect and ignore others. What’s the truth about the virtual helpers that have assisted millions of investing enthusiasts for several years?
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Bots have distinct advantages over humans in dozens of respects. Not only do they never tire, never get hungry, and never become discouraged, but they also operate around the clock, lack ego, are not greedy, and are not in danger of allowing any emotion to enter into the decision-making process. For FX and other kinds of markets, a programmed robot can juggle any number of securities and live positions simultaneously without making errors.
But perhaps the biggest benefit is seldom explored in the financial media. It’s the ability of automated programs to serve as proactive observers 24/7 and immediately take a position that meets a preset list of criteria. Far from being passive, electronic order placers, expert advisors are always on the lookout for a beneficial position and can get into it without a second’s delay.
Tips for Getting the Most Out of Expert Advisors
Assuming you get one or more advisors created to particular specifications, what is the best way to leverage their power to the utmost? It’s important to monitor market changes from day to day in case
parameters need to be changed or tweaked. But what many trading enthusiasts forget to do is account for successive strings of losses.
Small Trades in Choppy, Volatile Markets: During the programming phase, it’s possible to write a command that tells the expert advisor to place smaller trades after a specified number of negative results. For those who write in MQL4 and 5, it’s wise to measure the performance of each program independently. In most situations, the more accurate programs will call for a higher allocation of funds. Some investors utilize multiple expert advisors at once and decide on a set formula for allocating a designated amount of capital to each one according to its most recent performance.
Opt for Accounts with Minimal Spreads: During successive losses, which even the best bots endure during volatile time periods, larger-than-normal spreads can exaggerate drawdown amounts and keep profits lower than they might otherwise be. Account holders should seek brokers who offer reasonable spreads, particularly in asset classes like FX, where there are variances between the bid and ask levels.
Do Plenty of Back-Testing: It’s imperative to use excellent design criteria during the initial phase of programming. Also, when back-testing, try to use the same type of data that you’ll be dealing with after going live. Too often, people do little or no back-tests and end up with a system that looks highly accurate in theory but is nowhere near as effective when executing and managing real transactions and positions.