I’m still not clear on what the internal differences are between an Indicator script and an EA script?
I understand an Indicator script can be written to show you some kind of indication, such as an MA. I read that to do an actual buy or sell, only an EA script can do that. But I don’t know why that is. What is the difference with these two types of scripts that an Indicator cannot do a trade if you put the code in it?
There must be something structurally different about these that I am missing.
Thank you…
Hi,
This is my take on it, but I may not be a good explainer.
An Indicator Script is a programme that has been written to take price action for specific time periods and produce the visual effect on the display monitor. For example, a SMA(14) takes input as the average closing price each day for the last 14 days, and plots a curve overlaid on the candlestick charts called SMA(14). That programme has some flexibility in that it allows the user (trader) to adjust the parameter (14) to display an average of 1 day (try plotting the SMA(1) to see what I mean). The curve will no longer be a curve but a series of jagged lines joined together, giving the “average” of only one day’s price.
On the other hand, and Expert Advisor, or EA is a programme that is written and is intended to be connected to your trading platform by something called an API (an applications programming interface) so that instead of you manually placing trades when you are in the zone and your entry criteria are satisfied, your EA (or robot) places those trades as if it were you manually entering them, but it enters, sets stop losses, and exits your trades according to the levels you input to the EA such as stake, entry value, stop loss value and take profit value. Your EA can be run on historical data automatically, so that you can see its performance for back-testing.
I hope that makes sense.