If you had to choose ONE, what defines a good EA?

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  • 19% (11)
  • 39% (22)
  • 19% (11)
  • 23% (13)
Total voters: 57
 
Eusebiu Dascalu:
  • High Win Rate
    0% (0)
  • Low Max Drawdown
    0% (0)
  • High Profit Factor
    33% (1)
  • High Recovery Factor
    67% (2)

We want : Low Max Drawdown, High Recovery Factor, High Profit Factor & High Sharp Ratio

:)

 
Yohana Parmi #:

We want : Low Max Drawdown, High Recovery Factor, High Profit Factor & High Sharp Ratio

:)

correct answer
 
Eusebiu Dascalu:
  • High Win Rate
    17% (1)
  • Low Max Drawdown
    33% (2)
  • High Profit Factor
    17% (1)
  • High Recovery Factor
    33% (2)
Low Drawdown keeps you in the game :) ,Recovery Factor makes you a winner.
 
Mostafa Ghanbari #:
Low Drawdown keeps you in the game :) ,Recovery Factor makes you a winner.
A professional response.
 
LOW MAX DRAWDOWN. and it's not even close.

For what you called "High win rate" That’s how beginners get trapped. You’ll see 90% win rate EAs that quietly stack risk… then one bad move and boom, account gone. Just like many Grid EAs on the marketplace for example 

As for "High profit factor" Nice on paper. Can be inflated by a few lucky trades.

"Recovery factor" Sounds impressive, but it only matters AFTER you've already taken a hit (the damage already happened)

Drawdown is different. It tells you one thing :
"Can this EA survive bad conditions without killing the account?"

No survival = no consistency = no money.

So yeah, if you strip everything down, A good EA is the one that Protects Capital FIRST, Makes Money SECOND.
 
Alex Holloway #:
LOW MAX DRAWDOWN. and it's not even close.

For what you called "High win rate" That’s how beginners get trapped. You’ll see 90% win rate EAs that quietly stack risk… then one bad move and boom, account gone. Just like many Grid EAs on the marketplace for example 

As for "High profit factor" Nice on paper. Can be inflated by a few lucky trades.

"Recovery factor" Sounds impressive, but it only matters AFTER you've already taken a hit (the damage already happened)

Drawdown is different. It tells you one thing :
"Can this EA survive bad conditions without killing the account?"

No survival = no consistency = no money.

So yeah, if you strip everything down, A good EA is the one that Protects Capital FIRST, Makes Money SECOND.

You just stretched my vote out into long form. Well done, sir.

If recovery factor ends up taking the cake, then I guess that Martingarbage is brainwashing people.

 
Alex Holloway #:
LOW MAX DRAWDOWN. and it's not even close.

For what you called "High win rate" That’s how beginners get trapped. You’ll see 90% win rate EAs that quietly stack risk… then one bad move and boom, account gone. Just like many Grid EAs on the marketplace for example 

As for "High profit factor" Nice on paper. Can be inflated by a few lucky trades.

"Recovery factor" Sounds impressive, but it only matters AFTER you've already taken a hit (the damage already happened)

Drawdown is different. It tells you one thing :
"Can this EA survive bad conditions without killing the account?"

No survival = no consistency = no money.

So yeah, if you strip everything down, A good EA is the one that Protects Capital FIRST, Makes Money SECOND.
Well said. Capital protection comes first.
 
Ryan L Johnson #:

You just stretched my vote out into long form. Well done, sir.

If recovery factor ends up taking the cake, then I guess that Martingarbage is brainwashing people.

Low DD, but i can`t vote! :)
 

The most irrelevant of the four is the high win rate, you don't need a high win rate approach for a strategy to work. 

Low max drawdown and high recovery factor will always outperform high win rate strategies!

 
Sotirios Apostolos Adaloglou #:
Low max drawdown and high recovery factor will always outperform high win rate strategies!

There is no law that says high win rate contradicts low drawdown and high recovery factor. It can have all over the above.

Also your assesment about outperforming is incorrect. There is a direct relation between RR and win rate, also there are cases when a higher win rate with more trades is prefered over lower win rate with less trades, for example when compounding.

Forum on trading, automated trading systems and testing trading strategies

Food for thought and brainstorming

Simon Gniadkowski, 2013.03.14 23:13

Take a look at this chart,  it shows the relation between Win rate (WR)  and Risk:Reward (R:R), in this case the spread was 0 and uses a simulated coin toss with an even number of Long and Short trades taken at random with no attempt to predict the direction of the market.  You will see for a 50:50 R:R scenario the WR is 50%.

 

 


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