3/7 【Backtest Evaluation Method】 This explains all items in the backtest image ⑥
This is the Reiwa double-E here, the EA developer.
In the first place
EA developers gauge the quality of an EA by
checking it with a “backtest.”
Therefore, as users,
to determine the quality of an EA,
you need the skill of evaluating backtests.
With that in mind, this series
will write about “how to find profitable EAs from backtests.”
【1-minute chart to long-term chart EAs】
There are EAs for various time frames.
Mostly many use the 5-minute frame, but
there are also 1-minute, 15-minute, 30-minute, 1-hour, 4-hour, and so on
various time-frame EAs.
Basically,
short-term frames tend to favor counter-trend strategies,
while long-term frames tend to work better with trend-following strategies.
Even for the same currency pair,
the price movement characteristics change with the time frame,
and the applicable technicals also change,
so it’s good to incorporate EAs for various time frames into a portfolio.
As a caution,
1-minute and 4-hour EAs.
The 1-minute frame is the shortest.
The tick data used for backtesting consists of four OHLC values.
In the case of the 1-minute frame,
there is no shorter frame,
so it is not clear which of the high or low came first among the four values.
In this case, MT4 automatically decides which came first as a “pseudo tick.”
Because of that, backtesting on the 1-minute frame yields a modeling quality as high as 25% at best for all ticks.
In other words, reproducibility is reduced.
Unless you apply some special processing, such as adding filters from higher timeframes,
reproducibility remains reduced.
Also, for the 4-hour timeframe,
server time varies by broker,
so running it as-is may not deliver the intended performance.
For ordinary accounts,
in Japan time, winter time the server time is 7:00, in summer 6:00,
the server time becomes 0:00,
(Winter +2, Summer +3 accounts)
there are also accounts where winter and summer are both 0.
In that case, the switching time for the 4-hour chart changes.
Also,
for accounts with both winter and summer at 0,
the daily candles on Saturdays are generated,
so there will be six candles in a week,
so for EAs that use a daily timeframe,
their performance may not be as expected.
(I will announce when that happens).
Well then!
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【Reiwa no Double-Eye EA Listing】
https://www.gogojungle.co.jp/users/112481/products
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【Reiwa no Double-Eye Series Articles】
■EA Beginner Course
https://www.gogojungle.co.jp/finance/navi/series/1700
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https://www.gogojungle.co.jp/finance/navi/articles/64703
https://www.gogojungle.co.jp/finance/navi/articles/64738
https://www.gogojungle.co.jp/finance/navi/articles/65619
https://www.gogojungle.co.jp/finance/navi/series/1701
https://www.gogojungle.co.jp/finance/navi/articles/64723
https://www.gogojungle.co.jp/finance/navi/series/610
【Reiwa no Double-Eye’s Beliefs】
Develop EA with proper methods,
and gain the trust of more people,
while maintaining a long-lasting WIN-WIN relationship,
aim to revitalize the EA market and raise literacy.
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