EMALGO ForEx Robot Review
EMALGO- An Overview:EMALGO is said to be an automated trading system that delivers success! EMALGO is powered by the Expectation-Maximization (EM) algorithm, which is a method of finding the maximum probable estimate of parameters in statistical models. This statistical theory has been adapted for the ForEx price action. EMALGO generates observed parameters from an array of indicators. Yet all this is better said than done!
EMALGO Working:EMALGO uses the principle of Breakout theory – this usually happens with increased volumes triggers prior to 2008. Back tests prior to 2008 were conducted during the development stages. From the test results EMALGO’s performance has not been good since Sept 2008 – with the increased liquidly and volumes. There is a very large difference in the number of trades per week/month between the periods – 2002 to 2008 and 2008 to 2011. The lower performance prior to 2008 could be largely attributed to the data being indicative, comparatively lower volumes, choppiness due to SL hunting (very much prevalent then), etc.
How it Works out Profits:Their back test is usually performed using meta-quotes or dukascopy data which are actually indicative data (average of prices from several brokers). This causes the price bars to differ by as much as 5-10 pips on one hour bars and up to 10-20 pips on 4 hour and daily bars. Indicative price bars are noisy when compared to your actual broker price bars.
The makers claim that EMALGO operates in one hour time frame, with a look back of about 6 bars on multiple time frames. This ensures the EA performs consistently across all brokerages (ECN/non ECN and is GMT offset independent). The Opening/closing price of each bar is given maximum importance in the algorithms used. The trades are entered/ exited when the opening/closing value satisfies the entry/exit logic.
The ForEx makers claim that it functions best when the data source is from single broker. The support/resistance and bar closing values will work like in real trading situation in this case.
Apart from the above, one more factor to consider would be the fact that EURUSD underwent a huge fundamental and volumetric change after Sept-2008 Financial Crisis fall out.
It is a well known fact that it is not possible for any EA to function without requirement for some sort of parameter adjustment from time to time. Most EA developers implement these parameter adjustments into the code for various periods so that the back test results look smooth and good. This is exactly what they do such that there is hard coding of parameter adjustment for any historical period. The makers also claim their products are genuine – honest software without any false claims and is built on a very strong trading strategy.