New article: Applying fuzzy logic in trading by means of MQL4

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MetaQuotes 2016.04.26 13:11
 

New article Applying fuzzy logic in trading by means of MQL4 has been published:

The article deals with examples of applying fuzzy set theory in trading by means of MQL4. The use of FuzzyNet library for MQL4 in the development of an indicator and an Expert Advisor is described as well.

The modern-day trading cannot be imagined without automated trading systems usually called Expert Advisors or robots. Most, if not all, of them feature a clear, hard-coded trading strategy and money management system. Their main advantage is a rigid algorithm excluding the human factor. However, this advantage is also their main drawback since trading robots lack flexibility. Regardless of the market conditions, an Expert Advisor always applies the same trading strategy with the same strictly categorized parameters. In other words, the system always acts rigidly: average trend > enter the market with one lot, strong trend > enter the market with two lots. No deviations!

Unlike an automated system, human traders think in fuzzy categories and may have different opinions on similar market entry signals. They are often doubtful and keep asking themselves if the trend is moderate or strong. And even if the trend is significant, is it strong enough to enter in two lots? Such fuzzy categories can be handled by the fuzzy logic. The fuzzy logic does not set rigid boundaries between the categories. Instead, it "blurs" them making a trading system more flexible and combining the rigidness of a trading robot with the flexibility of a human mind. The article provides examples of applying the fuzzy logic system in trading by means of MQL4.


Fig. 6. Describing a trend using the fuzzy logic

Author: Alexander Fedosov

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