7. EA Backtesting and analysis pt.2

Transcript:

Hello, dear Traders. In this video, we'll continue the back testing of, the strategy If you remember, we made a big test of two thousand and twenty three. Now we can go to the report, press the right button and, choose save as report.

Then we need to press save and, we're gonna see, the detailed report on this strategy.

What is important in this report? First of all, you need to check the maximal drawdown in percentage and to compare it with the profitability you got. Yeah. For example, here we had, one hundred and fifty, thousand dollars of drawdown. Please keep in mind that our account was a million dollar. It was an initial deposit and total net profit for, seven months, and two weeks of two thousand and twenty three is, more than four hundred thousand dollars. Actually, it's like it's a good result.

You can use smaller deposit to to check it on the amount you want to, like, to really trade.

We have twenty twenty four trades. It's not too much, but still it's enough, like, for this period to understand, if if the result is good. Then we have the number of, like, short positions, one long positions, one So we can see that it's around like seventy percent if we're gonna take, like the overall trades. Yeah.

We have, like, seventy, almost seventy one percent. And there are also, like, details about, other metrics like average, loss rate, maximum, like lost rate, Mexicans, consecutive wins, and so on. And, you can actually analyze it, to understand if the strategy, like, is is, good for you. If you have a drawdown that is bigger, then the profit, the yearly profit means the strategy is not really good.

If you have a huge loss rates, that consume, let's say, ten percent, fifteen percent of your capital it's also like not not a good thing. But from like this picture, like I presume that like it's like it looks good.

Let's get back to the platform and make, some analysis of, the strategy for, let's say, two thousand and two. We need to change the dates, and press start once again. If you remember, I was speaking about the visual mode here that I personally, I don't use it because, when you make, like, when you enter the back testing, you can look through, the traits, like life. You simply press open a chart Yeah. And you can see the same picture. Yeah. You can see the trace from two thousand and twenty two.

You can see the periods that the robot was trading or it was an elective, and you can save this report. Let's let's name it twenty twenty two, for example.

And you can see that here we had plus minus, like the same drawdown around one hundred and sixty k for a million dollar deposit. It's not a lot. But the profit is really good. It's more than, million and a half.

If we would be making it with a visual mode, even the fastest one, I'll just like show you how does it look like.

You'll see that it takes much more time to get the results and this mode doesn't give us, like any any benefits. Of course, you can freeze, the, testing and analyze this situation, that okay. We opened here. Then we went here.

Then here. Then, okay. Let's move it then let's pause it and so on and so on. But, still, a final result.

I mean, when the trade is closed, you already, like, had it from here. So it's it's the same, but, this test is made for for a longer period.

Let's test the twenty twenty twenty one, for example, and we'll stop with back testing and move to the, optimization of robots let's switch off visual mode.

We don't need it and press that.

As you can see, twenty twenty one also looks good. We can save it at the report of twenty twenty one and check the details here the drawdown was around a hundred k from a million dollar deficit. Yeah. Ten percent, like, less than, like, at the moment, we got this drawdown.

Yeah. They kept it was bigger than a million. So that's why you can see that the drawdown is, actually, a hundred but it shows as, seven point five percent because we had some profit at the moment. So when the profitability was seven hundred thousand dollars is like seventy percent from the initial deposit.

So it's it's it's also good. So the best thing you can do is to make the back test, year after year. Obviously, you can put a history from, like, two thousand and eight till two thousand and twenty three and you're gonna get a chart with a lot of, with a lot of trades with the good profitability curve, but, you're not gonna get the whole details because the maximum drawdown, for example, it's shown for the period. If you'll have a maximum drawdown of five hundred thousand dollars, for example, you'll have to look for, like, where did you get it like, what was the year, what was the time of this drawdown, and it's harder to, analyze the system.

But when you'll do it year, the year and save the tests in, like the folder, for example, somewhere, and then we'll make a table of the profitability and the drawdowns.

You had every year.

You get a clear picture if this strategy works stable because there may be some years when you have two hundred dollars of profit, two hundred thousand dollars and some years where you have more than a million dollars of profit. And, obviously, that on a global chart, you'll only have a global profitability, and you need to divide it by the number of yes to have an average. But, it's better to, like, see your average, yearly of profitability on each back test separately. So in the next video we'll continue with, the optimization of the robots.