EA Studio Tools and Settings: Experience and Results

[Petko Aleksandrov]

One of the old trading rules says that your Take Profit should be 3 times bigger than the Stop Loss. After I tested 100s and even 1000s of strategies with EAs I realized that this is not the reality. I have so many profitable EAs where the SL is bigger than the TP.

Also, with EA Studio and the Experts, we test with precise statistics, something not available at manual trading at all.

Of course, there are strategies that work with SL smaller than the TP but not the majority.

And as I mentioned in some of the courses, if you ignore everything but think just about the price. When you open a trade and you place a SL smaller than the TP, you have a bigger chance of hitting the SL first. Higher possibility.

[Petko Aleksandrov]

And I just did not see prove along the years that the SL should be 3 times smaller than the TP… 🙂

[riuzk]

Thanks Petko for you explanation, im guessing you focus more on profit factor with counts of trades.

Many of my running EA’s has bigger SL than TP, but i see sometimes my EA studio find a strategy that have SL on 150 pip and TP 10 pip, these are some strategy i tend to ignore. Because sometimes i have 15 winning trades in a row and 1 loss that takes you back to breakeven. What kind of experience do you have with these strategy Pekto?

[Petko Aleksandrov]

I normally avoid those as well. There were traders sharing in the forum that they profit with such strategies. I think it was for the Gold…

Anyway, if the strategy passes the Monte Carlo and it is not over-optimized for such SL or TP I think it worths trying it.

Ye, recently I use a bit more the profit factor, but give it a try, use different things, experiment. This is the way that you will find your trading style.

[Andi]

Just an update to this topic: I started using more the consecutive losses acceptance criteria. I went down to 5 and the strategies I get are really awesome. I use it as well to remove the EAs from my live account. If they make more than 5 consecutive losses, I remove them.

And it makes a lot of sense because if we create an EA following one thing when this thing is broken or comes not true, it means the strategy was over-optimized for that criteria. Correct me if I am wrong Petko.

[Petko Aleksandrov]

Hey Andi,

Glad to hear from you. I would not correct you because I use the very same thing with some of my accounts.

Let’s make it clearer to the beginner traders what is consecutive losses in Forex trading.  This is how many losing trades in a row we have when generating a strategy or backtesting one.

Now, when Andi says that he uses 5 consecutive losses, it means that he aims at strategies that have no more than 5 trades losing in a row.

So yes, it makes sense to keep the same rules when generating strategies and when trading on a Demo to filter the EAs for live. The consecutive losses in Forex strategies are quite interesting and easy to follow when trading as well.

[Petko Aleksandrov]

How to follow the consecutive losses in Forex trading with the EAs? I am not sure if I see that in FX Blue?

 

[Petko Aleksandrov]

Hey Mery,

yes, you can not see exactly the consecutive losses in FX Blue, you can see the winner and the losers there. So one of the things you can do is to keep an eye when you have 10 trades and see how many of those were the losers. Let’s say you want to have win/loss ration of 0.7, this will mean that you can allow just 3 losers. After that, you can restart it when the strategy goes to 10-20 trades. Or you can restart at every 5 trades.

The other thing you can do is to bring back the strategy in EA Studio and from Data horizon you can set as a start the date when you started trading with the EA. And you will have a detailed statistic for the strategy. Basically, you can import 10 EAs, update the Historical data and see how they go, what stats you have, but just make sure to set the start date.

The consecutive losses in Forex are just an example for that, you can do it with the profit factor, the r-squared, max stagnation and so on…

[Petko Aleksandrov]

Hey Petko,

thanks for making this clearer. I got it now. I am surprised that in FX blue there are no so many statistics as within EA Studio. It’s a statistical website and EA Studio shows you more about the strategies… 🙂

Anyway, I wish there was such a feature in EA Studio where we can track the performance of the Experts and we would not need to use the external website.

[traderaw19]

Hi Meryjonestexas,

I see some columns in FX Blue about consecutive losses and winners. They’re all the way to the right on the stats page, so they’re kind of hidden.

Is this what you’re looking for?

[Petko Aleksandrov]

Hey Traderaw,

thanks indeed! Yes, I see now that there are consecutive losses and profits.

I am thinking of a new system to place the EAs trading on the live account. If I generate EAs with consecutive losses 7, for example, I would then keep the EAs in the live account until there are 7 consecutive losses. If this happens I would remove the EAs from the live account.

How does this sound?

[Petko Aleksandrov]

Very good point here! In my mind was that Mary was asking about the win/loss ratio! Thanks for the clarification traderaw19!

Mary, I am not really sure about that system…

let’s say you have selected to use 7 consecutive losses. In your real trading you might have the case to hit on 4-5 consecutive losses than 1 winner, and then again 4-5 consecutive losses and 1 winner. And this could continue for some time and it will be within your criteria but you will have losses…

 

[Jay-r Yuzon]

Hi everyone. I’m new to algo trading and to this forum. Just wanted to know your thoughts regarding this subject. Thanks

Since the common acceptance criteria can be found under the generator (generator settings), and also under optimization (whether full data, walk forward, and normalization), what is the best way to make use of the common acceptance criteria?

Should we use it while generating strategies, or during optimization? Or both?

What are the advantages or disadvantages in using one method over the other?

[Petko Aleksandrov]

Hello Jay-R,

Very good question here, but it is from those questions that have no precise answers.

However, I will explain to you what is the logic.

If you use the common acceptance criteria in the generator, all the strategies will be filtered there(this is what I do).

If you want to use the optimizer, it is recommendable to use the common acceptance criteria again. Because the strategies that will come from the generator fitting the acceptance criteria but the optimizer can change that. Normally it should change them in a better way and improve Profit Factor, Consecutive losses and so on, but might lower the number of trades.

Anyway using the Monte Carlo is a must after the generator.

Have a look at the Normalizer, it is quite interesting. I will upload an update video about it.

Cheers,

[Jay-r Yuzon]

Thanks for elaborating on the logic Petko.

For the Monte Carlo, I did notice in your courses that you use it frequently.

And yes, I’m looking forward to your updates on the Normalizer.

Cheers

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