Automatic trading system (EA) essentials

This is Geko.

Among the readers who reached this column,

you may be thinking,

"This is my first time with an automated trading system (EA)!"

So, in several installments, I plan to write articles like “EA basics you can understand even if it’s your first time.”

First, the things you need to operate an EA.

EA stands for “Expert Advisor,” and refers to a program that automatically executes FX trades.

To run an EA program, you need a dedicated trading software called “MetaTrader.”

MetaTrader can be obtained for free from the FX broker you deal with, and the currently usable versions are 4 and 5.

We refer to MetaTrader version 4 as “MT4” and version 5 as “MT5.”

EAs that run on MT4 and those that run on MT5 have different languages and file formats that compose their programs, so you need to set up the appropriate EA for each.

Furthermore, although Mac and mobile versions of MT4 and MT5 may be released, most EAs can only be set up on the Windows version.

Even if you manage to set it up on a Mac, there is no guarantee it will operate normally, so be cautious.

In other words, to operate an EA you need

• The EA itself
• MetaTrader software compatible with the EA’s file format (MT4 or MT5)
• An environment where Windows can be used

If Windows can be used, you don’t necessarily need a physical PC; it can be set up in a Mac virtual environment or on a rental server such as a VPS.

Additionally, if you have been running MT4 (or MT5) on a PC and the PC shuts down, restarts, or MT4 (or MT5) is closed/crashes,

• the EA’s operation will stop
• the PC restarts
• MT4 (or MT5) closes (finishes)

so be aware that EA operation will halt in such cases.