Ways to Improve Your Expert Advisor's Performance (EA)

It is a labor of love and toil, yet all of the hard efforts frequently result in an Expert Advisor EA that falls short of expectations. Perhaps it operates inconsistently, or in the worst-case scenario, it does not function at all.

But don't yet toss the baby out with the bathwater. With these suggestions, you may not only transform a losing EA into a winner, but you can also improve the performance of an already lucrative EA.

Let's get this party started.

• Determine the market circumstances

The most common reason why EAs fail to persist is that they do not adjust to changing market circumstances.

Building an EA that works in all situations is, if not a fool's errand, a close second. It's much simpler to create an EA that performs well under certain situations and then activates it when those parameters are met.

Is the market trending？ Execute your EA tailored for trending marketplaces. Have the seas turned choppy？ Run your trading EA for ranges.

Ranges and trends in the forex markets tend to last longer than you may imagine, so use your judgment to capitalize on this.

• Have an escape strategy in place.

Do you know what to do if your range trading EA is caught in a breakout, or if your momentum EA is trapped in a short squeeze？

It is just as important to have an exit strategy in place when market circumstances change as it is to detect market conditions in the first place.

Moreover, doubling up and hoping for the best is not a suitable exit strategy!

Make a strategy for what you will do in an emergency. Should you cut your losses altogether or lower the magnitude of your trade？ To mitigate the risk, you might consider hedging using an option or making a manual transaction.

• Non-correlated EAs should be used.

This leads us to our next point.

Run several non-correlated EAs across various currency pairings, periods, and techniques.

• Do you have an EA that works in the short term？ Create one that works on daily charts.

• Do you have an EA that runs on majors？ Consider creating an EA that works with unusual currency pairings.

• Do you have an Algorithmic EA？ Why not include a discretionary copy-trading method into your investment portfolio？

The more you diversify your EA portfolio, the more robust your trading may become. Ideally, you want to be in a position where one EA's performance balances the performance of another, resulting in a continually expanding equity curve.

• More cash should be allocated to high-performing EAs and less to low-performing EAs.

As a system trader, one of the most crucial questions you must ask yourself is “how much？”

The amount of money you put into a system will impact whether or not you achieve your objectives. If you have a fantastic system but distribute the incorrect amount of cash, it will be useless, regardless of how big of an advantage the entrance and departure rules have.

This is a relatively frequent mistake.

Not all systems need the same level of funding. A higher-quality system might take a bigger portion of your wealth, while a lower-quality system (worth trading) receives less.

This is the portion of system trading that is entirely at your discretion and may have a significant influence on your results. As a system manager, you must be proactive in taking control of your performance rather than merely relying on your code.

• When the market is in a slump, trade less.

When your EA is suffering a downturn, the fifth technique to enhance your system is to reduce the size of your trades.

When your EA is losing, sitting on your hands is a recipe for catastrophe. Learn about your EA and what to anticipate from it, and when it begins to lose money, reduce your size.

Sure, you may lose some earnings now and then if your EA heals faster than planned, but that is merely a consequence of having an efficient risk management strategy.

• Trading on a low spread account might help you save money.

One of the most basic strategies to increase performance is to save expenses. Spreads that are too wide are damaging in two ways. One is self-evident, whereas the other is not.

• They cut into your earnings. Every additional fraction of a pip you pay goes into the pocket of your system.

• You have a higher number of losing transactions. The greater your spread, the more likely you are to get stopped out. As easy as that. So, although you may spend a fraction of a pip more, you may lose many pips if a trade is stopped out.

This is also why a low spread with a commission option may be more suited to EA trading. If the cost is not included in the spread, the spread will be reduced, which means you will get stopped out less often.

• Minimize your MT4 workspace.

Execution is critical since it may be the difference between a profitable and a losing deal at the end of the day. When it comes to the most rapid market moves, milliseconds may make a significant difference in the price you obtain.

Reduce the number of windows open in your MT4 workspace. This is a little-known method for improving performance. Close the market monitor window and any charts you are not using, since they are data-intensive components of the site.

During turbulent moments in the FX market, the number of price ticks rises, increasing the quantity of data that MT4 must update. This may slow down your terminal's processing speed and, as a result, the time it takes for your EA to route orders into the market. Making the modifications outlined above lowers the platform to its essentials and simplifies the system's operation.

• Reduce latency by using a co-located VPS.

Consider having your EA operating on the computer directly next to your broker's, eliminating any order execution delays.

This is precisely what you get with a co-located virtual private server (VPS). Your EA is installed on a computer in the broker's data center that you may connect to over the internet.

This not only eliminates delays but also gives a substantial advantage in terms of stability and redundancy as compared to operating your EA on your PC.

• Understand your MAE and MFE.

Knowing your Maximum Adverse Excursion (MAE) and Maximum Forward Excursion (MFE) provides you a big advantage when it comes to improving your system's performance.

Your MAE will inform you how far your system's trades normally go into negative territory before becoming profitable. This may greatly increase the risk/reward ratio of your system's trades by improving stop-loss placement.

Similarly, the MFE will tell you how deep into profit your trades normally go before reversing. This helps you to optimize your trading strategy's profit-taking component.

The good news is that businesses such as www.fxblue.com enable you to run these reports for free by linking your account to their analysis software.

• Back-test your approach using real-world data.

Too frequently, trading systems that seem to be wonderful on paper fail to deliver when they go live.

Sometimes this is due to faulty system design, but more often than not, it is due to inadequate price data on which the approach was back-tested.

Make certain that you test the technique on the same data that you want to trade with. The identical problem happens when you run your EA on a demo account.

• Use a position sizing algorithm that scales in.

Instead of concentrating on strengthening your entry rules, shift your emphasis to the more profitable area of position size.

Test your approach in particular by running a scale-in model that adds to successful trades as they go for you. Market Wizard Van K. Tharp discovered this to be one of the most efficient strategies to improve the effectiveness of a strategy in his book The Definitive Guide to Position Sizing.

Try including some scale-in rules into your EA; you may be shocked at how much of an effect they have.

Now it's your turn...

It's now your turn.

Using any or all of the tactics discussed above may make system trading a lot less stressful and a lot more enjoyable.

You will give your EAs a huge advantage if you are proactive and manage your “system trading company.” So, without further ado, ask yourself the following question: Which of these suggestions can you put into action to enhance the performance of your EA？

Try including some scale-in rules into your EA; you may be shocked at how much of an effect they have.

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