What’s a method?
If we speak in programming language, A technique is a tactic which outputs two boolean – true or false or win or loss
Instance : Purchase when RSI is 30 and worth is above EMA 50 or SELL if RSI is 70 and EMA beneath 50
This technique is utilizing two indicators. EMA and RSI
Similar to that any technique can use tons of of indicators or worth motion techniques akin to
situation 1 : If there’s a bullish engulfing return true
situation 2 : If any candle breaks excessive of bullish candle by shut, return true;
situation 3: add purchase orders on 50% of vary of bullish engulfing
On this instance a method is verifying two circumstances
if(situation 1 & situation 2) //true
return true
else return false;
You possibly can code these in lower than an hour however while you begin testing you’ll encounter tons of of issues the place SL hits.
So constructing a method is 1 hour job whereas optimizing a method is a number of years of job.
Optimization will be categorized as
1. Regular Optimization – when a dealer provides some filter to technique e.g. provided that situation 1 and a couple of is true, add situation 3 to measure the well being of 2nd engulfing candle, if well being is weak keep away from shopping for else purchase.
2. Over Optimization – When a dealer optimizes it utilizing Machine studying or thoughts when it’s actually not wanted so should roll again and delete some optimization
3. No Optimization – when a dealer has no thought about the best way to optimize it, he normally use martingale or grid based mostly strategies to enhance accuracy
Coding an EA is a greatest thought however the primary downside is coding the algorithm of discovering highs and lows. For instance discovering excessive low on seen chart isn’t an issue however discovering and saving that time the place your TP was triggered is an issue, you want additional abilities to code such system which may bear in mind your key occasions of buying and selling akin to final commerce factors.
Normally MySQL and different DB integration articles are already accessible on database. However for a easy course of a dealer might begin with easy DB, saving as a textual content or CSV file which is straightforward
If you bear in mind your buying and selling key occasions on chart, and should you code in such approach that they bear in mind key occasions in database, in your request you’ll be able to pull and discard entry exit with full technique visualization wherever on chart, then this may assist you to ending your optimization in a number of months solely.
For instance : Let’s imagine i over optimized my technique and added a brand new situation 12, however I dont have sufficient knowledge to commerce it. If I resolve to manually backtest that filter, I actually dont know when this situation occured on chart and since i dont have knowledge I’ll concern to set off any commerce on that filter regardless of i added that situation on my buying and selling program.
So to resolve this downside, use of Database is extremely advisable
