Forex Trading and Expert Advisors

The next opportunity that I'm going to discuss is the Forex Autopilot EA. Before I get to that I'd like to give you a quick overview of both the Forex market and Expert Advisors.

If you're not familiar with the term Forex, it's short for the foreign exchange currency market. If I take a long (buy) position on the EUR/USD currency pair I am essentially betting that the value of the Euro will increase against the US Dollar. If I take a short position (sell) my bet is the other way around. Prices go up and down based on market sentiment (i.e. interest rates, commodity prices, unemployment, overall economic stability) and everyday traders scalping the markets for gains. The Forex market is more volatile because of leverage. Leverage is the ratio of currency volume to account equity. If I'm trading on a standard account, 1 lot ($10 equity) can control $100,000 in currency. If I'm trading a mini account, 1 mini lot ($1 equity) can control $10,000 in currency. It's necessary to control a larger volume of currency because price changes are measured in very small increments. For example, 1 EUR/USD pip is 0.0001. So an increase of 100 pips (a price increase of 0.0100) in your standard account would net a gain of $1,000. It's important to understand that Forex trading is a zero sum game, meaning that if one person makes money, another person loses money. This makes Forex trading a little bit more like playing poker than trading stocks; however, the upside can be much greater then the stock market.

If you're totally confused at this point check out the Babypips website. They have a great Forex tutorial.

When I first learned about the Forex market I had dreams of becoming a successful day trader. Then I came to some realizations:

#1. Although the Forex Market is open 24 hours 5 days a week, the best trading times are during the London and New York markets. I'm on the US east coast so the London market starts at 3AM (while I'm sleeping) and the New York market trades 8am-5pm (when I'm at work).
#2. Who wants to spend their entire day glued to a computer waiting for a trade signal?
#3. 90% of Forex traders lose money in the long run - am I really smarter than 90% of traders?

That was disappointing...then I learned about Expert Advisors. Expert Advisors (EA) is a program that is run on the Metatrader 4 platform (used by many brokers such as IBFX). The computer program (or script) uses indicators, entry points, stop losses, etc...basically everything that a technical trader would manually look for. The EA runs 24/5 on either a continually running PC or a Virtual Personal Server (highly recommended) and opens and closes trades as it sees fit. Think about it- you're at work, sleeping, or at your local bar and the EA is making money for you!! It's definitely an exciting concept but finding an EA that actually works is far less exciting. I'm going to share my experiences, good and bad, to help you in your quest for cash.