Metatrader Expert Advisors based on Pattern Trading
Pattern is a kind of template, a regularly repeated market situation that can be definitely singled out from market “life”, classified, and, most importantly, used for getting profit, which is based on mathematical advantage. Sentiment is a tendency of market participants to make certain actions, for example, to drive price or to take profit. Sentiment of market participants lays in the basis of market patterns, thus analyzing trader sentiment in different moments can single out, or discover, market patterns. Filters are a set of discrete rules for market analysis. The search of patterns on an array of market tools is performed by means of filters. It is not possible to use indicators with “memory” (for example, moving averages) as filters. In general the pattern can be divided into two parts. Firstly, one is used for identification of this pattern; using this part we can define its origin and the formation of corresponding sentiment on the market. Secondly, there is the part that is used for entering the market and earning money. There are strict individual parameters for each pattern: take profit, stop, and maximal time of pattern realization; when this time expires, the position closes whether it is profitable or not. It allows us to carry out strict testing of a pattern on the basis of history while estimating the size of mathematical advantage.
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IN THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY COUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
