In the previous article, we described what automated trading is. Now, let's take a closer look at the involvement of an expert advisor (also referred to as trading robots) in this type of trading.
So, a trading bot is a specialized program in which a trading strategy is outlined in a programming language, and precise parameters for its execution are defined.
The trading robot is installed in a trading platform, which is connected to the broker's server via the user's login and password. All trading operations are carried out using the user's capital. This capital is pre-deposited into an account opened with the broker of your choice for trading purposes.
As you understood, the term "trading robot" or "expert advisor" has nothing to do with the visual appearance of this software. A trading bot is simply a program written in the programming language mq4 or mq5. These programs are compiled and used in the trading platform as files with the extension .ex4 or .ex5 for execution.
The expert advisor is installed in the trading platform, more precisely in the "Experts" folder within the root directory of the MetaTrader platform, which is typically located on the "C" drive of your personal computer.
Trading operations
Expert advisors can perform two types of trading operations:
- Market deals (BUY/SELL)
- Pending Stop/Limit orders
You can find more details about these deals and their variations in this article. The trading platform automatically transmits these trading operations to the broker's server for execution.
Each trading bot has different trading activity. Some execute several trades a day, while others engage in a few trades per week. It all depends on the strategy employed by the expert advisor.
Nevertheless, in any case, the trading operations of the expert advisor constitute a continuously repeating process. It will repeat again and again in accordance with the trading strategy. The expert advisor will analyze the price chart of the asset on which it is installed, and upon detecting new trading conditions, it will initiate new trading operations. After their closure (after recording the result), the trading bot resumes market analysis and makes new trades. Thus, until you manually stop the trading bot (until you disable the automatic trading function in your platform), the trading bot will continue to operate and execute new trades.
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