The market of free forex advisors is currently diverse and cannot even be estimated. Anyone can easily find and download the forex advisor he is interested in. Forex resources offer a wide range of trading robots, ranging from the simplest, based on a simple oscillator and moving averages, to pseudo-intelligent self-learning trading systems. However, the trader is faced with the most important task, namely, the right choice of an adviser. Today we will talk about how to choose the right adviser for scalping. Also learn more about trading bot for kucoin.
The pain of choosing an adviser for scalping
There are a lot of advisors for scalping in the network. There are paid, there are free, simple and complex. Some scalpers are more like pipsers, being content with just a couple of points of profit. Some robots can only trade during certain hours or only on a certain currency pair. In general, the agony of choice is still the same.
The principles laid down in scalping advisers, in fact, are not very different, however, sometimes the adviser algorithm itself is built so incorrectly that such trading can lead to the intervention of a forex broker.
In order to choose the right adviser for scalping , there is a set of simple rules that will help a trader find the right expert among a pile of unnecessary rubbish.
Rules for choosing an adviser for scalping
First of all, you don’t need to pay attention to advertising enticements “100500% per month”, but you should delve into the algorithm embedded in the scalping adviser as much as possible . ForTader magazine experts have already written about how to properly analyze the trading strategy of a forex advisor, so you should not stop there.
Take a close look at the size of the stop loss and take profit orders placed by the advisor for scalping, evaluate the frequency of transactions and the lifetime of each transaction.
If the scalping adviser sets a stop loss of 200 points or even neglects it, such a scalper can be safely thrown away. Unmanaged risk is not our method.
The classic size of a stop loss order for a scalping Expert Advisor is about 50 pips. If the robot places a much larger stop loss, then it does it “for show”, and prefers to simply sit out the losses. How such an overstaying can end is hardly necessary to explain.
The lifetime of the transaction is also very important. If a trade opened by a scalping advisor “lives” for less than 1-2 minutes, there is a very high probability that the forex broker can block your trading account.
For a more complete analysis, you can test the scalping EA in the strategy tester of the MetaTrader 4 platform. Since we are dealing with a scalper, special attention should be paid to the spread with which the testing was carried out.
If the scalping adviser during testing shows the lifetime of transactions within up to two minutes, such results will have nothing to do with real trading.
Estimate the average profit of the scalper advisor, it should be at least 2 points. The number of trades for a scalping robot cannot be small either. Otherwise, it is simply adjusted to history.
It should be noted right away that the test results and the real trading results of the scalper will always differ, because during testing, the quotes archive is presented not by the forex broker, but by the Metaquotes server, which, as you understand, are different things.
Rules for trading with a scalping advisor
So, the scalping advisor has been selected, tested and found to meet all the requirements for it. It remains only to "hang" it on the chart with the selected currency pair and start sewing money bags? Not so simple. Trading with a scalping Expert Advisor has a number of features, which we will consider.
The scalping advisor does not like sharp price fluctuations, so it is better to trade with a scalping robot in a calm market. If long candles appear on the chart, it is best to wait a few hours until the passions in the market subside, the number of players will decrease, and only after that allow the scalping advisor to trade.
It is very important to always focus on the events of the forex economic calendar. If some important exchange event takes place in the next few hours, for example, the announcement of an interest rate or the publication of such an indicator as NonFarm Payrolls, it is very likely that the scalping advisor will “scalp” you a significant loss.
Look carefully at the settings of the scalping robot. If it is intended for trading only during strictly allotted hours, then its settings contain the GMT Offset parameter - the time shift between your broker's time and Greenwich Mean Time. It is very important to control the correctness of this shift and correct it in case of transition to winter or summer time.
As a rule, on the last trading day of the week and at the end of the trading month, large players take profits, which again causes sharp price jumps, increasing the likelihood of a loss.
Another nuance of trading with an adviser for scalping is the right choice of a forex broker. In order for the received profit not to be "eaten", it is necessary to choose a broker with the smallest spread, while not forgetting about the order execution time.
As you can see for yourself, in order to choose the right adviser for scalping and trade it profitably, you do not need to be seven spans in the forehead. It is enough just to apply logic and follow simple but effective rules.