Difference between FX indicators and automated trading

A gold chart has shown an arrow. So, will orders also be placed automatically?

Even if an arrow appears, it does not necessarily mean that an order will be placed automatically. This is because the function to display the conditions where they align and the function to place orders are separate.

In MT5, indicators used for market analysis and EA are treated as different types.
An EA is a program that can automate orders and the termination of trades, but not all EAs trade automatically.
Do not decide by name alone; confirm which parts are responsible for display, judgment, and order.

Display, judgment, and order are separate

An indicator is a tool that presents price movements as lines, numbers, colors, arrows, etc. Just because an arrow appears on screen does not mean an actual order will be placed.

Deciding how to use that display is the “judgment.” If you place an order, you specify whether to buy or sell, and what quantity to use, among other things.

Display, judgment, and order may look contiguous but they are separate roles. After viewing the display, you can wait without placing an order, or decide to pass.

What the indicators display

What an indicator calculates and when it updates its display varies by tool.

For example, it shows with lines, numbers, colors, arrows whether the price is above or below the line, whether the direction is the same over a long and short period, and whether the chosen conditions are met.

The meaning of arrows is not the same everywhere. For instance, at the moment a single chart bar is confirmed, it may indicate that the specified conditions are met.

What a display-only tool does not do

A display-only tool shows market information on the screen, etc. It does not process placing orders or concluding trades. The scope of display and notifications varies by tool.

The three decisions after display are, for example:

・ whether to place an order or to pass
・ whether to buy or sell, and what quantity
・ at what price to end the trade to minimize the loss

Even if an arrow appears on a 4-hour gold chart in one frame, the order quantity and the price to end the trade are not determined. The expected loss amount is the same.
If it is a display-only tool, it will not place orders or end trades even if arrows appear.

Difference between display-only and automated trading

Display-only tools show lines and numbers but do not place orders or end trades. Automatic trading tools automatically process orders and the ending of trades in accordance with set conditions.

The scope of automation varies by product, so check the product description and user manual.

Three items to check before use

In the tool’s description and manual, verify the following three points.

1. What is shown and under what conditions
2. Whether the processing to end orders or trades is automated
3. Who decides the quantity to order and the price to end the trade, the user or the tool

If it is display-only, arrows may appear but no orders will come in. Reading “what is displayed” separately from “what is automatically executed” clearly defines the scope to verify before use.

Awagooru’s “Awatenai EA” is a free MT5 display tool that does not perform automated trading. The semicircular meter showing current direction and the arrow that appears after a single price move is confirmed are calculated separately.
There is no function to determine order quantity, the price to end the trade, or the expected loss amount, and you can confirm display content and usage conditions on the product page.https://www.gogojungle.co.jp/tools/indicators/89463
https://www.gogojungle.co.jp/tools/indicators/89463