[Four Checks to Understand] I will teach you how to analyze an Expert Advisor (EA) from the basics!!
Hello everyone!
Today I will guide you through the basics of how to analyze EAs.
What we are analyzing is the "DOES" released on Gogojungle.
https://www.gogojungle.co.jp/systemtrade/fx/17024
First, check the chart.
Choose something that is trending upwards.
From Golden Week onward, various EAs were performing poorly.
However, this DOES shows a straight, consistent performance as shown here.
A good EA is one that keeps earning solidly during such downturns.
Check the performance figures.
The first thing to look at is the "Maximum number of open positions." An EA that holds too many positions should be avoided. DOES forward has a maximum of 3 positions. It’s better to avoid EAs holding 10 or more positions.
Next, look at the maximum drawdown. Drawdown indicates how far the equity has fallen from the peak profit. DOES is 4.03%. Under 10% is excellent; under 20% is normal; EAs over 20% are excluded from candidates.
Finally, let's look at the win rate.
Win rate is only a guideline.
DOES shows 95.45% (42/44).
This means a win rate of 95.45%, with 42 wins out of 44 trades.
① A 100% EA may be a candidate that will never lose until it collapses.
② An EA with 60% or lower win rate may be hard to operate as you may lose more often and it could be exhausting.
③ An EA in the 40% range is a breakthrough. It has small losses and large profits.
Summary
① Check the chart
② Check the maximum number of positions
③ Check the drawdown
④ Check the win rate
Please take a look at “DOES” once. Purchase is also welcome.
