Three Reasons to Turn a Scalping EA into an Indicator

Are you a trader tackling scalping methods and wondering whether you should use an EA (Expert Advisor) or an indicator? I myself have been developing and selling both EAs and indicators on Gogojang since 2021, and based on my experience developing both, I have tried many trading methods. The conclusion I reached is that sign indicators are the optimal solution for scalping, while EAs are effective for swing trading.

In this article, I will explain in detail the benefits of using sign indicators from three perspectives. In particular, understanding why sign indicators excel in scalping should help your future trading strategy.

EAs are programs that automatically execute trades according to preset rules and are especially suitable for swing trading and day trading. However, automation with EAs can sometimes have the opposite effect in scalping.

・EAs cannot respond to sudden events such as economic data releases or remarks from influential figures.

・EAs struggle with market context recognition. They cannot determine when to enter and when to stay out.

・MT4 accounts are disadvantaged by spreads. FX companies with narrow domestic spreads often do not support automated trading on MT4.

Using MT4 sign indicators allows real trading to be conducted with a broker that has narrow spreads.

In FX scalping, the trader monitors market movement in real time and makes buy/sell decisions.

Because rapid market signals are needed, sign indicators that provide buy/sell signals are effective in scalping. By using these sign indicators, you can precisely determine entry and exit points. The strength of sign indicators lies in deciding timing while confirming market trends and overheating conditions.

In terms of trading flexibility, discretionary trading using sign indicators is a trading style that cannot be imitated by EAs. For example, considering the impact of recent news or economic events on the market and deciding whether to enter based on sign indicator signals. Such trading is impossible with EAs.

In discretionary trading using sign indicators, the final decision to enter or not is up to the trader. By using MT4 sign indicators, you can adapt to your preferred trading style, including scalping in seconds or minutes, and day trading.

EAs enable emotionless trading. They are well-suited for methods that aim to grow profits over several hours to days, like swing trades.

In particular, for long-term positions in swing trading, stop-loss settings and money management through EAs can be effective. However, EAs may not always be suitable for scalping.

This is because scalping requires quick judgments and timing, and mechanical trading may fail to respond to sudden market moves. EAs follow preset stop-loss and take-profit rules, so they are not influenced by emotions. On the other hand, successful scalpers often rely on intuitive trading derived from experience.

Using sign indicators enables emotionless trading and adherence to rules.

In scalping, traders gain higher win rates by observing market movements themselves and trading discretionarily. In particular, using sign signals for discretionary trading allows taking larger lot sizes, making it compatible with scalping methods that target a few pips.

Conversely, in time-consuming strategies like swing trading or day trading, automation and risk management with EAs can be leveraged, so it is important to use them appropriately. Tailor the use of EAs and indicators to your trading style and environment.

Q1: What is the most suitable indicator for scalping?

A1: Indicators that display buy/sell signals on the chart or alert you are recommended. In particular, alert features notify you by sound even when you’re not watching the chart, so you won’t miss trading opportunities while working.

Q2: What is the main difference between EAs and indicators?

A2: EAs are programs that execute trades automatically, while indicators display buy/sell signals on the chart to support the trader’s decisions. EAs are suitable for automation, whereas indicators are suited for discretionary trading.

Q3: What is the difference between scalping and swing trading?

A3: Scalping aims for profits from small price moves in a short time, with trades completed in seconds to minutes. Swing trading holds positions for several days to target larger price moves.

Q4: Can’t I create a scalping EA?

A4: There are scalping EAs, but they are often weak to sudden market movements and environmental recognition, so they are not necessarily optimal. In scalping, discretionary trading with sign indicators tends to have higher success rates.

Q5: How often do you trade using indicators for scalping?

A5: Scalping usually involves multiple trades per day, timing entries according to sign indicator signals, and frequent buying and selling. Therefore, several signals are necessary each day to generate trades.

For this reason, if there are not a few buy/sell signals per day, trades do not occur in the first place.

Grid Rash_Arrow_IndicatorPlease use indicators for high-frequency trading like this.

Q6: Is it possible to use indicators and EAs together?

A6: Yes. For example, run swing trading with MT4 EAs, and use MT4 sign indicators to monitor buy/sell signals while scalping with a broker offering narrow spreads. This combined approach is possible.

Q7: What is the most important factor in scalping?

A7: The most important factor is quick judgment and execution. While leveraging sign indicators, you must flexibly respond to market trends.