hi everybody Alex du Plooy from expert4x and in today's video we're gonna
be talking about management of an EA now this morning I got a an email asking me
how often should i optimize my EA and recalibrate it for future trading really
as a result of that email I'm making this particular video why a making this
video is you have to see the rear optimization of an A in context of the
whole EA management process so what I'm going to be showing you is what I do to
manage my EAS now I don't say there hundred percent correct I'm sure a lot
of people don't do what I do and a lot of people have got much more advanced
techniques but I find this technique gets the job done so let me show you
what I saw on the screen you can see about 16 charts and I'll show you how I
use those 16 charts to manage my EA trading for a particular EA that I'm
trading so this is the EA management a process that I use when I get a new EA
the first thing I do is I back test that I optimize that I analyze it and I
create settings now these settings could be for many currencies many timeframes
and can vary quite considerably so that's the first step that I do then I
would forward trade that EA for one month using those settings that I've
just created and that might mean creating up to 20 sets of settings then
after a month I would determine the base currency the best setting and the best
timeframe for this particular EA and I heaven I wouldn't just go for the very
best is what we have three or four the the very best results but I would also
at the same time look at the very worst results and and compare the worst result
settings to the best result settings and to understand why certain settings are
failing and understand why certain settings are
succeeding and is it because of the time of day that's being traded is a because
of the maximum number of open deals or there's a whole lot of reasons but oh
it's been considerable time comparing the losing settings to the winning
settings and understanding the dynamics that create winning settings
I would also then decide on a number of those settings to trade live and I
generally don't trade one set of settings live I trade a basket of
settings and currencies and timeframes live that's what I would do at that
point so I would have a live foot folio and I would have a testing portfolio
which is done on demo accounts so then I would take the failing currencies at all
settings and I would change them from what I've learned so far and I'll create
more set file so I create more set files to firstly eliminate the losses but also
to eliminate badly performing currencies and I might even add new time frames and
I might even add new currencies then after that I would forward trade those
particular settings for another month and do exactly the same thing I would
identify the weak ones identify the strong ones identify good currencies
bad-bad time frames good settings and did and by doing that process I will
eliminate the negative ones and add to the positive ones and that is an ongoing
process from month to month I do that I would also then relook at my life
portfolio and say what it what changes do I need to make to my life fulfill it
should I change the currency could I change the time frame she has changed
the settings should I leave them the same and I do the same thing and that is
an ongoing process you cannot just stop there every month I review and review my
results on my testing and demo platform and on my live trading platform so let's
look at this in practice on your screen you can see some tests as
a testing schedule for the RSI envelope trader now what happened here is I
tested for currencies on a number of timeframes using completely different
settings and those settings were created from testing no year you can see 16
items I must have tested 40 items to get to the settings so those are the best
settings for that particular currency at those particular time friends that I
could find after doing some in intensive back trading optimization and analysis
work finding those settings and just by the way the optimal settings are very
seldom the settings that I use because they are the least likely to repeat so I
would look at robust settings when I do this kind of testing so that's where the
first set of settings happen and sometimes I'd actually repeat like said
to was repeated they said 3 was repeated there sometimes that repeats some
settings with different currencies play around with timeframes pair around with
can see Sarathy who run it for a month and here are the results that came out
after 1 months trading and you can clearly see some trends here you can see
set 2 is really really producing good results with a tan Tien and also is
producing good results with a hero it hasn't been traded any other other
times if set 3 is really bad it's producing losses and losses so that's
obviously one to avoid but before you avoid it before you throw it in the bin
you've got to understand why it's negative and you also have to understand
why the other ones are positive so there's quite a lot of analysis trading
interpretation and that type of thing that goes into this particular exercise
so what do we do about these underperforming currencies of time
frames or settings we create new settings I would create a new set of
settings for this particular set of circumstances to see if I can improve on
that negative result sometimes it's not only negative results that we do changes
for for this as years of positive results but because of what I
learned from the really good results I made some additional changes so I
created a new sit farm and then sometimes we just apply the the base
setting in the first month to some of the lost ones like in that particular
case so it's a bit of there's no rules to this thing you just analyze and
analyze until you feel more comfortable about the settings that you are going to
run so you didn't run it for another month and exactly the same processes
then followed at the end of that month you have a look at what which ones are
the positive ones which ones are the negative ones why the negative ones were
negative and why the positive ones were positive and and what you can do to
change the settings in general to improve the results now the idea is as
you can see you start with a certain amount of pips that get generated in a
month and you the idea is to always improve your pup's by analyzing the
settings and eliminating the negative settings or results and replacing it
with more positive Rell so again here you create new settings you drop all the
old settings create new settings and then you rerun those these tests again
for another month now all of us can be done on one account you can either have
one account but sitting or you can do it all on one account I tend to do it on
one account and then analyze the results in if exclude so you need to start with
a count with a huge balance also you need to find a broker that will allow
you to use demo accounts for as long as you can tell an ex for instance this
very happy that we used the emoticons as long as they are being traded if we stop
trading them they delete them after a month so as long as they active they
will never delete them there these particular accounts so the same thing
after a month to you'd also read relook your life portfolio in the light of what
you've learned after two months of forward testing you would then either
leave your life portfolio if you're getting good results all you and
appropriate changes to your life portfolio settings and you might even
change the currency timeframe all those kind of things and
then move on so you'd have to sits going you to have your live account trading
one or two or three currencies and you'd have your demo account constantly
trading different currencies and the more the merrier because the more
results you can get the more you can analyze them and get the best settings
or the or the best knowledge about this particular EA and understand where the
sensitivities lie is that in the time of day setting is it in the target or is it
in the price setting the stop setting this is a continuous learning process
now that hopefully answers the question how often must I update and analyze and
reoptimize my yeah that Pro that is part of a continuous process now I'm using a
month year some guys like using two weeks other guys like using two months
so you can decide how often you want to do it but I think a month is a good time
to give the setting enough time to prove itself for us to get results that we can
analyze and move on to but you will see this particular process I have found
what happens is your turtle always goes up because you always go the eliminating
the negative you increasing the positive and you're adding other currencies that
might have better results than the ones that you using and also you would
eliminate a few of the if a particular time frame is clearly giving losses all
the time like for instance this hero yen it's it's had to losing month in a row
you would consider instead of putting another a different set file you could
consider just dropping that complete set they and replacing it with some other
currencies and things like that so I hope this is giving you some idea of
firstly how expert advisors should be managed and
optimized so in other words I don't actually go to the the strategy tester
to reoptimize you can if you want can't go to the strategy tester to optimize
some of the currencies but on the whole I like doing my reoptimize ation from
forward testing rather than back testing so I use actual forward testing demo
account and live account results to decide what what changes to make to my
settings now if you're doing this with a number of EA's then you can start
comparing EA's to each other and you can start building a portfolio of EA's that
each have maybe 20 test accounts running all at the same time and you then in a
really good position to decide to get the very best out of your portfolio of
EA's that you're trading and sometimes one would even eliminate an a and from
your portfolio and not traded live and only bring it back
when the market conditions are more appropriate to that particularly EA so
all of this is a whole lot of work as you can see I am doing a lot of work I'm
doing it for myself for my own benefit and I've looked at teaching people to do
this but a lot of people have severe limitations on doing this firstly they
they use very bad data when they are testing firstly and secondly they don't
have the live trading experience to decide what changes to make to to
settings to improve the results they just don't have that trading you you
actually need manual trading experience do you know that you also need
experience on how to optimize obviously you need experience on how to analyze
the results of your testing and you also need to know how to control risk because
risk is what it's all about if you can risks a small amounts to make big
amounts that's what forex trading is all about so you have to then apply risk
management changes to your optimize and analyze settings not an easy job for the
or the person who works a nine-to-five so I
hope you found this interesting this is the way I do things as I say this is the
way I achieve really good results with my ei trading and my ei portfolios is I
do quite a lot of work on it yeas are not a work reduction tools they
actually a work increasing tools and you and you have to do it properly to make
money if you are making money with EAS that you have to always ask yourself is
what I'm doing sustainable can what I am if I'm just using the set files from a
vendor is that sustainable in the next two years and and I'm not saying that
you can't make money that way if you do make money that way you must probably on
the side of Lady Luck but this way is a much more scientific way we do a lot of
analysis work really homed in on winning combinations on a continuous basis month
by month if you've done this exercise of first doing the optimization and then
doing a month testing then you are less likely to have started with a poor set
of settings for your live trading you can use your live trading results you
can either stop you can actually change them in midstream at any time you don't
have to wait for the end of the month you can strain change them in in
midstream from information that you've gathered up to them again from me Alex
deploy I hope you've enjoyed this video I must apologize I have gone on a little
bit I do get quite passionate about this process because it's such a common sense
process it's something you know that you think everybody should be doing and it
has eliminated an incredible amount of risk out of my eyes and have allowed me
to focus my resources which is my trading capital on winning settings and
winning is not all the EA's are winning years so it helps you focus on what what
to focus your money on and your money making skills on again from me Alex du Plooy from Expert4x
cheerio