Evaluation of the test results of trading strategies

expert advisor
Expert Advisor

The evaluation of results is very subjective element. Everyone chooses his personal criteria and their significance. Basically, at first you should follow the profit in pips, it is enough to see a test with fixed capital. This test will give you an idea how does the expert work.

To make the most of a particular expert it is necessary to make Money Management. The next test must be with capital, proportional to the amount in the account. In this way you can see what the relative DD is (the maximum drop rate). Here comes the controversial question – which is better: better results in pips or less DD (respectively a better capitalization). The first method is more profitable and the other ensures higher stability in future. We have accepted the factor low DD as basic, but everyone have their own choices. Of course, nothing is more important than the final result.

Curve balance / current balance

Here things are clearer – if the curve is smooth, the expected results will be stable. You can follow the changing of the curve in different market conditions (trend, range). If this curve is able to be equally smooth all the time, then you are on the right way.

Final evaluation

You have created an expert, conducted some tests and received satisfying results. In a large number of the cases, these tests have been accompanied by further optimization and additional adjustment of the parameters, which improved the results. You ask yourself: How good is this expert? Will it gain in future? To be able to answer these questions, first you should understand why the expert actually gains. What is that market situation? What does it use, what happens and why it continues to happen? If you find the logic, then your expert is really good and you can trust him. Otherwise, you take a high risk.

Like this post? Please share to your friends:
ForexZig - Professional forex trading