subject: Forex Expert Advisors - How You Can Make Forex Expert Advisors Profitable Forever [print this page] We can explain this here: We can explain this here:
Forex expert advisors are represented by a source code that is the sum of a trading system's algorithms otherwise known as a trading strategy.
Forex expert advisors are also called trading experts. The best method of picking the optimization intervals for forex expert advisors will be reviewed here.
What is so important when it comes to choosing optimization intervals for forex expert advisors?
When optimizing Forex expert advisors, traders don't think about optimization intervals.
As a rule, their choice is limited to the last period of time, as it is this period that contains the most likely market conditions for the future.
It's important that the right length of time is used so that a sufficient number of positions can be opened in order to generate statistics about the performance of the forex expert advisor.
But it isn't professional to work this way and big mistakes can occur which will bring about big losses because the risk of using the forex expert advisor was underestimated.
So what is this error and how should a trader choose intervals?
The most common mistake when it comes to selecting intervals
Quite simply, when optimizing Forex expert advisors, the state of the market is not taken into account.
The big assumption is that forex expert advisors are optimized for the existing market conditions and any future changes will be protracted and smooth in nature.
However, the reality is that market conditions will alter quickly at times and are very different from earlier periods.
So if you want to avoid making big losses it is important to make a clear distinction between periods.
For instance, what is the difference between a period of calm just before a crisis and the crisis period itself?
Hugely different! In truth, in this case the borders are clearly visible, but it happens quite rarely.
But will a Forex expert advisor trade successfully in the period of crisis if it is optimized for the period of 'calm'?
Similarly, would a forex expert advisor trade with success if it has been optimized or crisis periods in a period just after a crisis?
How to select the intervals that are incorrect when optimizing a forex expert advisor
Pic 1
The picture shows how to choose intervals incorrectly. When picking out the 'test' and 'training' timeframes it is incorrect to determine a 'training' period with one set of market conditions and then select another interval with different market conditions for 'test' periods.
In this case, it turns out that a trading Forex expert advisor may be unprofitable using the current interval as it has been optimized for another interval.
Or a forex expert advisor might not get used because the 'test' period results were not as good as what really happened.
How to correctly pick intervals for forex expert advisors optimization
Pic 2
The picture shows how to choose intervals correctly.
Both 'training' and 'test' periods have many different market conditions included.
This means that from any good results that the advisor shows over the test period, it is quite likely that the profitable market opportunities will be used with very little or in fact not at all dependant upon the observed market conditions.
So this advisor set up is more likely to be successful permanently as long as the other requirements of the expert advisor are met.
Another question would be 'what is the best timeframe for 'test' and 'training' intervals?
Or how is it that you can identify what marks out differing market conditions to enable you to select 'training' and 'test' periods?
The answer isn't easy and comes from many years of communication with leading professionals who work for some of the world's largest financial investment companies as well as hands-on experience.
