Something that comes across our desk quite a bit is in regards to forex trading signals and how they differ from using expert advisors to trade on MT4?
Are forex signals really that different, and why should they be a part of your diversified trading strategy? These are key questions that we will try to answer in the post below:
MQL5 Forex Trading Signals
While there are many free forex signal services out there, this doesn’t make them worth talking about. It is forex signal services that often give trading a bad name. Lots of signals are simply designed to generate one off profits to be used on flashy marketing screenshots without any regard for risk management. Of course there is a level of personal responsibility when it comes to managing your own trading account whether you use signals or not. Those that don’t do their due diligence on who their signal provider is and the type of trading strategy that it is following usually deserve the type of signals that they are often handed for simply being lazy.
But just like not all forex traders lose money, not all forex signals are duds. Sitting right inside your MT4 platform is an entire ‘signals’ tab dedicated to a screened, back-tested list of forex trading signals from MQL5!
An MQL5 forex trading signal is simply an alert from a screened list, that lets you know when the trader you are copying places a trade on their own account. You don’t have to run any software yourself or keep your computer running 24/5 via a VPS as you are the one choosing to take a trade or not. Simply sign up, select the forex signal which you think is the best, and your MT4 platform will do the rest for you.
By automating your trading in this way, you’re able to take a lot of the negative emotion out of your decision making process. No longer will you get caught up in the emotion of a losing trade, or wonder if you’re letting a winner run for too long. You’re now trading with a screened professional trader that you know you can trust because their trading results are at your fingertips.
Your biggest challenge when adding forex signals to to your overall strategy, is deciding how much of your overall account equity to allocate to trading certain signals.
Forex expert advisors (EAs) on the other hand, are programs that you can install into your MT4 platform and use them to automatically execute trades when certain conditions are met. An example of an EA would be a system that automatically trades when two custom moving averages cross over. Unlike forex trading signals, expert advisors require your trading machine to be running whenever you want a trade to be executed. This can mean expensive VPS hosting needs to be purchased and an increase in costs outside of your core forex trading investment.
An expert advisor for MetaTrader 4 is written in a special programming language called MetaQuotes Language (MQL4). As you can see on the screen above, EAs are coded in MetaEditor which is a piece of pre-loaded software to help traders code. While they are incredibly useful, unfortunately they can be difficult to code. Something that you don’t have to worry about when it comes to forex signals.
While you’re here, be sure to explore the ‘free tools’ menu in the bar at the top of the Vantage FX website. This is the section that houses both our MQL5 forex trading signals section as well as expert advisors. Go through these two pages at your leisure and set up the one that fits with your overall trading strategy the best.