For a sustainable EA, how long period back test should be needed at least? (with 99% high quality back test data) - page 2
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My personal opinion is that you should test shorter periods of time if you intend to recheck and update your EA periodically. It depends very much on what you're actually trading. For example my EA trades Index and futures but not Forex. Having this in mind I believe the data more than 3-4 years in the past isn't relevant. The Nasdaq 100 has grown more than 100% in the past few years which changes the value of your starting balance. Many companies have changed and grew differently. It is worth mentioning the different economic conditions and the changed companies in each Index. You might also want to exclude 2020 in various tests, considering that this year has way too much volume compared to past years.
I suggest you to try to catch some different market disruptions in your back-test and that should be enough for your short term goals.
Wrong approach in my opinion
I think the following things:
It depends also of the number of trades
to be succesful it should have always an earning in the time.
it shouldnt care of the pair
should have no input parameters
Thank you so much, Marco.
Your comment always outstanding.
What do you mean "should have no input parameters"?
Could you explain?
Thank you so much, Marco.
Your comment always outstanding.
What do you mean "should have no input parameters"?
Could you explain?
Thanks for your compliments,
I invested( maybe better to say wasted) a lot of time in adjusting parameters, trying EA and indicators...but what you find it s somthing good for the past, but how can you know it will be good for the future? Indeed it doest not work.
I mean: if market is dynamic, how can you set a fixed parameter? Ea should have an adaptative algorithm. Only input could be how much risk you wanna have....but about length, threshold and so on, I think they are not good to have.
Thanks for your compliments,
I invested( maybe better to say wasted) a lot of time in adjusting parameters, trying EA and indicators...but what you find it s somthing good for the past, but how can you know it will be good for the future? Indeed it doest not work.
I mean: if market is dynamic, how can you set a fixed parameter? Ea should have an adaptative algorithm. Only input could be how much risk you wanna have....but about length, threshold and so on, I think they are not good to have.
Perfect way to think. Thank you so much.
Market conditions have changed. I want someone who is forward-looking, not backwards-looking.
Mutual funds always have this statement-past performance is not indicative of future performance. What more can we derive by extrapolating current performance onto past history?
Thank you so much, Koh.
I'm considering about one question, if the EA even pass the past test, how can it pass the future test.
May I ask your opinion about this point?
It really depends what are you looking for.
My personal opinion is that you should test shorter periods of time if you intend to recheck and update your EA periodically. It depends very much on what you're actually trading. For example my EA trades Index and futures but not Forex. Having this in mind I believe the data more than 3-4 years in the past isn't relevant. The Nasdaq 100 has grown more than 100% in the past few years which changes the value of your starting balance. Many companies have changed and grew differently. It is worth mentioning the different economic conditions and the changed companies in each Index. You might also want to exclude 2020 in various tests, considering that this year has way too much volume compared to past years.
I suggest you to try to catch some different market disruptions in your back-test and that should be enough for your short term goals.
Thank you so much, Pavel.
The market is very complex. How do you separate/define the different market?
Could you tell us more?
Related topic:
For a sustainable EA, how much win% should be needed at least?Thank you so much, Koh.
I'm considering about one question, if the EA even pass the past test, how can it pass the future test.
May I ask your opinion about this point?
You can test it risk free on demo for a few month, if its profitable then it will be in the future on live account. Backtest is always important, EA that passed backtest year after year with high profitability will likely to perform the same in the future.
You mean sustainable in the tester ?
A backtest say's absolutely nothing about potential future performance.
You can test it risk free on demo for a few month, if its profitable then it will be in the future on live account. Backtest is always important, EA that passed backtest year after year with high profitability will likely to perform the same in the future.
Thank you, Anak.
Do you mean EA should be update timely, and it have to pass one year back test?