Despite the fact that all expert advisors are free of human emotions, there are "hot heads" and very cautious algorithms that calculate every step among them. Mathematical analysis of the market allows to bring trading to a new level.
Ideal mathematical Forex expert advisors should not rely on luck, so, for example, news advisors that are trying to catch a sharp price movement can hardly be attributed to mathematical. But popular griders of different types can be regarded as a simple example of a mathematical expert advisor. Theoretically, these bots can be considered ideal if not too much pressure on deposit.
If the algorithm of the expert advisor is based on different indicators, it can also be attributed to the mathematical subspecies. After all, any indicator analyzes price chart using mathematical methods. Of particular interest are algorithms using neural networks. In particular, their ability to self-educate looks promising.
Mathematical Forex expert advisors on the example of Momentum Elder
This trading robot is fully indicator, it uses only 2 indicators built into MT4 – Momentum(18) and EMA(19). Trading is conducted on the EUR/USD pair on the h1 timeframe. The following conditions are used to enter the market:
- to buy – the Momentum should be above 100, and most part of the candle should be above the EMA. SL can be put under the nearest local extreme;
- for short positions – the conditions are reverse. As for the TP, it is set at 1.5SL, if price doesn’t reach it, the transaction is closed manually after the formation of the reverse signal.
Test results cannot attribute this trading robot to the extremely profitable. By the end of the testing period, the deposit has increased, but only slightly (only $2,988.40). In this case, the growth curve of the deposit suggests that it is far from stable. There are times when trading was conducted with almost zero efficiency over several weeks.
Maximus expert advisor: neural networks in action
Maximus can be considered an excellent example of automated trading based solely on mathematical analysis of the market. The EA does not try to guess the direction of the price movement on the eve of the release of important news or play on the emotions of traders, market is entered solely on the basis of the analysis of price movement. Like other mathematical Forex expert advisors, it supports multicurrency.
The authors do not disclose the algorithm in detail, it is only known in general terms. The EA allocates 2 consolidation clouds for each currency pair (based on analysis of the formed candles). These clouds act as a kind of boundaries of the channel in which the price moves.
When the price is directly in the cloud, nothing happens – the main activity starts when it exits. There are several options:
- if the transaction is already open, the lot is increased or the profit is taken;
- if there is a breakthrough of the cloud, you can open a new transaction in the direction of the breakthrough.
The efficiency of the bot is proved not only by the constant maintenance and regular updating of the algorithm, but also by the results of monitoring on a real account. Since the beginning of last fall, the initial deposit has grown by almost 475%, and no month for the reporting period was closed with a loss.
cm-Trend: mathematics in its purest form
Mathematical Forex expert advisors of this type have another name – griders. The bot opens a number of transactions; sometimes, as in this case, Martingale can be used. Cm-Trend actively uses position locking, while continuously monitoring the ratio of the total profit/loss.
Immediately after the start, it makes a deal and starts to support it. After a certain period of time, Buy/Sell orders are set. For a counter trend, increase of the lot can be set. In the future, the number of orders is increased under this scheme until it reaches a maximum.
For each area of trading, the value of profits different from zero is set (one of them is guaranteed to be greater than 0). The transactions are closed at reaching the minimum value of profit specified in the settings.
Test results confirm that the mathematical methods of analysis remain valid. Despite the fact that the EA was created a long time ago, since the beginning of 2015, profit amounted to over 50%. At that, trading was quite aggressive – 6,254 transactions were concluded in such a short period of time.
Mathematical Forex expert advisors are so popular not without a reason. The cold calculation during the decision-making allows them to trade profitably for a long time without optimization. Of course, the effectiveness of expert advisors is very different, simple indicator robots trade at a medium level – they bring profit, but it is growing too slowly, and periods of stagnation happen.
As for the grider advisors, the main threat here is that the deposit sooner or later will not survive an avalanche of simultaneously open orders (as the lot is constantly growing). Therefore, you must be constantly on the alert.
The use of neural networks looks as a promising area, but so far there are few such expert advisors. However, the ability of trading robots to self-educate looks tempting. Few bots that use neural networks in trading confirm the prospect of this trend by its effectiveness.