Forex Expert Advisors - Making Forex Expert Adviser Profitable Forever

Here we can explain:

Forex expert advisors represent a source code which is a realization of algorithms of a trading system (a trading strategy).

Forex expert advisors are also called trading experts. The best method of picking the optimization intervals for forex expert advisors will be reviewed here.

What is so important when it comes to choosing optimization intervals for forex expert advisors?

Optimization intervals tend to be forgotten about by traders when they are optimizing forex expert advisors.

Normally, the last time period is the extent of their choice because it is this time period that is more likely to be the future condition of the market.

This period of time also has to be of the right duration that would allow enough positions to be opened to produce statistics on the success of a Forex expert advisor.

But it isn't professional to work this way and big mistakes can occur which will bring about big losses because the risk of using the forex expert advisor was underestimated.

So what is this mistake and how do traders pick intervals?

The most common mistake when it comes to selecting intervals

Simply, the market's state is ignored when forex expert advisors are optimized.

The assumption is made that the forex expert advisors are optimized for current conditions in the market and changes are assumed to be protracted and smooth.

In reality, market conditions sometimes change quite rapidly and differ considerably from the previous period.

So if you want to avoid making big losses it is important to make a clear distinction between periods.

For example, how different are the periods of calm before a crisis and the period of the crisis itself?

Hugely different! As it happens, it is easy to spot the borders in these situations but this is quite rare.

But will a Forex expert advisor trade successfully in the period of crisis if it is optimized for the period of 'calm'?

Similarly, would a forex expert advisor trade with success if it has been optimized or crisis periods in a period just after a crisis?

How to choose intervals incorrectly when optimizing Forex expert advisors

Pic 1

The incorrectly chosen intervals are shown in the picture. When choosing 'training' and 'test' periods it is not right to define an interval with one market condition for the 'training' period and an interval with another market condition for the 'test' period.

In this case, it turns out that a trading Forex expert advisor may be unprofitable using the current interval as it has been optimized for another interval.

Or a Forex expert advisor may show worse results for the 'test' period than in reality so wouldn't be used in future.

How to correctly pick intervals for forex expert advisors optimizatio

Pic 2

Here the picture shows the correct intervals selected.

The 'test' and 'training' periods include several conditions of the market.

This means that from any good results that the advisor shows over the test period, it is quite likely that the profitable market opportunities will be used with very little or in fact not at all dependant upon the observed market conditions.

It means that, most probably, this type of advisor will work successfully all the time, provided that all other requirements of the expert advisor are fulfilled.

Here is another question: how long should 'training' and 'test' intervals be when it comes to deciding on a timeframe?

Or how is it that you can identify what marks out differing market conditions to enable you to select 'training' and 'test' periods?

The answer isn't easy and comes from many years of communication with leading professionals who work for some of the world's largest financial investment companies as well as hands-on experience.