The big majority of Forex software in the market fall in one of 3 categories: charting system, Expert Advisor (EA), and Fully Automated EA.
A charting system is just what the name inferes, a signal provider that will generate charts with any parameters you set. Many of these providers offer pre-set charts for your convenience, but, ultimately it is your responsibility to set the parameters to fit your trading strategy. I would only recommend this method to advanced traders that know how the market works and have tested several strategies to know which ones will perform best under different market conditions. Most professional traders use charts with custom sets of parameters. Professional traders are not the norm, but rather the exception to the rule and are not your average Forex trader.
Before I get to the next 2 categories, a little personal background is important here. When I first started trading almost 30 years ago, I did it in Nasdaq Level 2. I had 3 screens to track my technical indicators (MACD, Stochastics, Volume, and others) for each of the stocks I followed. On another screen, I had all the indexes – the DJI, NDQ, SPY, and the sector indexes of the stocks I was following). In a third screen, I had my orders ready to go. Before entering a trade, base on what the stock chart said, you had to look at the Nasdaq market conditions, then the Dow, then the S&P 500, the your sector index, check momentum, volume, and enter the trade. All of this to make a trade decision in a split second if you are day trading. Had an Expert Advisor being available those days, my chances of succeeding as a day trader would have grown exponentially.
In that aspect, the Forex market is no different than the stock market, because, instead of the stock indexes, it has at least 11 economic indicators that can affect your trade regardless of what the currency chart is saying. You must be aware of at least 11 economic indicators before entering a trade. Economic indicators like the Gross Domestic Products, Non-farm Payroll, Unemployment rates, Consumer Confidence Index, Consumer Price Index, Industrial Production Index, and more, can greatly affect the value of a currency and their releases should be an integral part of your economic calendar. In addition to those economic, your should be aware of news that may affect your trading. In 2016, the “Brexit” vote caused the most volatile world market reaction we have seen in recent history due to a one single country news. Only then, you are ready to look at your technical indicators to determine whether to enter a trade.
A Forex Expert Advisor (EA) is a ruled-based trading software that has a pre-set time-tested set of rules and indicators to help you with your trading. Every Forex novice trader should start trading using a rule-based strategy and, I must say, most Forex traders should too. Trading based on indicators and “instinct” should be left to the most skilled traders. The difference between using an EA and setting your own charts is that all the testing for whichever strategy the EA is using is already done. An EA will then give you trade entry and exit points. A good EA should also tell you where your stop-losses should be. When used properly, an EA should minimize your losses and reduce your learning curve.
As the name may infer, the main difference between a Forex EA and a fully automated Forex EA is that the fully automated EA will execute your trades as well. By using this “hands-free” approach you take all emotion out of your trading. If the indicator and EA is good you can make great profits with this type of system. The only drawback is that these EAs don’t take into consideration economic news releases and you should still keep an eye for your economic calendar to minimize your losses.
As you can see, there is no real answer as to which system is better than the other. As an experienced trader with many hours, days, or even years using indicators, most probably the best option is to use a good chart provider and to use your own time-tested strategies. For a beginner to intermediate trader, the answer is not as clear. While, in the long run, developing your own trading strategies is best. The fact of the matter remain that most traders at these levels fail to make profits consistently and may be much better served using an establish Forex Expert Advisor while they test their own strategies.