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I use 🙂
Maximum equity drawdown %: 10-15% (Depends on FX 10% or Crypto 15%)
Minumum Trades: 50
and Sometimes:
Maximum stagnation %: 30%
Minimum return / drawdown: 3
Hello Dommech,
something important from me here:
Min count of trades:50 is too small number. Specially in Forex you should go with min 300-400 count of trades.
Basically when the generator/reactor works it looks for combinations between different entry and exit conditions, indicators with different parameters etc., so when you have strategy with only 50 count of trades this might be not a stable strategy. We want to see bigger count of trades so we know that this combination of indicators, parameters, SL, TP and so on, works on more trades(longer period of time).
I really like the win/loss ratio, but it is hard for me to get results on all pairs when I keep it on 70.
In the acceptance criteria for min count of trades, Petko is right, I even try to keep it above 600 trades.
Thx for the answers guys!
Some strategies with especially extremely low DD (0.5-2%) I’ve found that they are extremely rare.
My Backtesting data is over 3 years, always when using FX I’m thinking of adding it to 5 years, my thoughts are that market behavior changes and 3-5 years is enough? Or how do you guys think?
Usually I get 200 trades/strategy but if I set it higher I might miss the rare ones with the low DD
I understand that this affects the robustness of the strategy if it’s only 50 trades but the low DD makes me want to take the risk
Off Topic, but:
How far back do you guys go with FX, how many years or bars do you use to get enough statistic data?
@jacpin thx sounds good, I go usually for M15 H1 and sometimes H4 but not lower
Will change to 5 years as well 🙂
I recently heard in one of Petko’s courses that instead of demo testing the files you could (optional!) Change the data horizon and leave 1 month out of the generator and later recalculate. this gives me even more confidence that the strategy is robust. I still put many EA’s on demo so exchange the bad ones
Hello Jacpin,
You are getting more count of trades on M15 probably because you have more data on it ( I guess you have the max for EA Stduo 200k there?).
So basically the more bars we have the more count of trades we can expect to see. Of course it depends how you set the generator/reactor, acceptance criteria, etc.
Just be careful if you use small count of trades and higher win/loss ratio, not to go in over-optimized strategies. Make sure that you do the Monte Carlo test and Demo testing (I know that you do demo).
Hello Dommech,
Glad to see you are working in more details. Yes, this method of removing the last one month is really great.
This way we see if the strategy was going to be profitable if we really traded with it. It saves a lot of time, and as you said, it gives confidence.
Both strategies look fine.
Hello Jacpin,
Glad to hear from you. I show that in the The Ethereum trading in 2018 + 99 Robots every month course, but I have it in my “to do” list where I want to dedicate a whole course about it. I will show different methods on how to avoid the Demo trading.
I will use Demo as well but I will not Demo test my strategies before going live, I will still continue to demo test “backup strategies” if I need to switch out some of the ones. Testing this way on “Out-Data” work as well as demo testing. Markets change anyway so it’s not a guarantee that the strategy will work live if it did on demo.
I go with enough history data to feel confident + 80-90% Monte Carlo + the last step is the one month of “Out data” I don’t feel that I need more confirmations than that, this way really saves Weeks or even months so I’m willing to take the risks.
Hey, I’m compounding profits so lets start to compound time 😉
Jacpin,
this is my job to test, trade, and find new methods which are faster. It is great that there are such softwares nowadays which allows us to be innovative.
Hello Dommech,
your method is just fine I think, very similar to what I do. Also, you are right that there is no guarantee, and I think I make this clear in all of my courses. We never know if a profitable EA will continue trade well. It is just the same as to know where EURUSD will go tomorrow.
But the thing is we wan to put more things on our side before trading, anyway we would be gambling, and you will never see me in the casino 🙂 No way!
Hello,
I want to ask a question.
In one course I saw that in the acceptance criteria Petko uses the ambiguous bars, and I do not see those in the acceptance criteria.
Hello Jacpin,
thank you very much for making that clear.
Actually Petko explains the same in the course about the ambiguous bars, but I was just thinking that this option is no more available.
So it is good to know it is there, just with different name.
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