The strategy builders - Generating the strategies

A free video tutorial from Petko Zhivkov Aleksandrov
Forex, Crypto & Stock Trader
Rating: 4.6 out of 5Instructor rating
50 courses
82,140 students
The strategy builders - Generating the strategies

Lecture description

See how quick is a strategy builder in generating strategies, and how exactly we set it.

Learn more from the full course

Basic Cryptocurrency Trading Course + 12 Trading Robots

Learn Cryptocurrency Trading Starting from Basics, Going Through Manual Trading, up to Professional Algorithmic Trading

04:45:01 of on-demand video • Updated April 2023

Learn the basics cryptocurrency trading specifications and details about the platforms
You will know a profitable manual trading strategy that can be applied to all cryptocurrencies
How properly to trade with Expert Advisors(Robots) and eliminate emotions in trading
Learn the proper money management, which is essentially important when trading
Master a manual trading strategy that will provide you with great entry points
Learn to recognize the important levels on the market, and know when to trade and when not to trade
You will know how to use the major trend direction which will improve your results
Practice trading with different cryptocurrencies so you will have better diversification
Hello, dear traders. It's Petko Aleksandrov from EA Forex Academy and I will continue now with the generation of the strategies with Expert Advisors Studio, the strategy builder that we are using currently. What I have done in the previous lecture? I have imported the history data from the Meta Trader. If I go to Data Import, you will see that I have imported Pepperstone-Demo 01. This is the server, so this is the broker's data from the server where is our demo account with the Bitcoin, the Dash, the Ethereum and the Litecoin. And now, if I go to Generator, you will see that as a history data, data source I have Pepperstone 01. And if I choose the dropdown menu, you will see I have the Bitcoin, the Dash, the Ethereum and the Litecoin. OK? So now, we are ready to work. What is the Generator? Simply the Generator, guys, is an automated process which based on the history data we have imported in the strategy builder, will generate for us strategies and we can after that export these strategies as Expert Advisors or Robots and place them on the trading platform and they will trade automatically. Now, what will happen? I will go quickly over the menu in EA Studio. What will happen after the Generator starts working? It will put the profitable strategies into a collection. Now with the collection we have many filters that we can add and you will see here the strategies. After that we can open each strategy right over here into a strategy. And the nice thing here is that if you have already some strategy, some existing strategy, if you found any strategy over internet, someone share it with you and so on, you can immediately see if this strategy is working profitably or not. And this is very important because this save us so much time. OK? Let me just quickly show you what I mean. Pure example here, guys. So, for example, if I choose Pepperstone, let's say randomly I take the Dash. OK? This is the time frame on H1 hour and you will see here I have the history data from 2017, 29 of June until today. This is the spread. And here, what we have is the strategy. So, here you can add a Stop Loss and a Take Profit if you have into your strategy. And here you add the entry and the exit conditions. So, you see here is selected long entry. This means that we put entry conditions for buy. OK? So for example, lets take randomly the moving average that I have showed you in the first lecture in this section about the Indicators, period of 21. Lets make it and you see here are the conditions, so moving the average rises, morning average falls. The bar opens above moving average. So, if the bar opens above the moving average, it means it was below the moving average and it will open above it. It means there is a cross of the moving average and I click on Accept and you will see what is the result. It's a total loss. So. even I put more indicators, randomly indicators chosen, for example, lets take the MACD and I select MACD line rises. I click on accept, you will see this strategy is still losing. And this is very important, guys, because if you have any strategy, using indicators normally what people do, they put the strategy on a demo account, they test it for one month, two months until they realize actually the strategy is losing. And they start changing parameters, so for example, they try with 15 and they try with 10 and they look in YouTube people trying with different and they change it and change it and never, ever actually having any profits or some good trade, some bad trade and they leave frustrated. Now, the idea here is that you see the result immediately. Just on the moment, I see this strategy is losing and I don't want to use it. OK? So, here if you have any ready strategy, if you want to test the strategy, you put your entry conditions, you put your Stop Loss, you put your exit conditions and you will see the results immediately. Now, for every strategy there is the Optimizer. This means that I can optimize the strategy inputs. OK? And this actually means that the strategy builder will find better parameters for this Indicators. The other thing is the Monte Carlo which is a test for robustness. We have multi market, so here we can test if this strategy is working on another strategies, on the other markets like the Bitcoin, the Ethereum and the Litecoin. And here is the report of the strategies. All the statistics that we have, the next balance, maximum drawdown, the biggest loss in percentage, return to drawdown ratio, count of trades. How many trades we have, Ambiguouss bars and so on and so on. Guys, I'm not going into deep details about the strategy builder. Simply, this is a little bit advanced and I have a couple of courses, actually about algorithmic trading and how you need to use exactly the EA Studio. But here I want to show you a brief presentation, so you will have an idea at the end of the course what is algorithmic trading, what are the strategy builders and how we create strategies. All right? So, one more time, here we have many tests for each strategy and the last thing on the menu here is the portfolio. This is the very innovative thing here in EA Studio, something that is not available with the other strategy builders. Here you can trade many strategies in one robot. OK? So, many strategies you can put it on the Meta Trader and they will trade for you automatically. Now, if I go to Generator and this strategy that I had it, I will just remove it from the collection. I will go back to the Generator, now. And I will show you how I am using the Generator to generate strategies for me. So for example, I will choose Pepperstone, Bitcoin, H1. This is on H1 chart and I will go to Strategy properties. So, here is the entry lot that we want to enter. Lets say we want to go with 0.1. I choose whether I want to use a Stop Loss or Take Profit. If I select - Always use, this means I want always to have a Stop Loss and a Take Profit. And the other option is May use. So, I will leave it on the software to decide whether to use a Stop Loss or a Take Profit and do not use obviously, I don't want to use Stop Losses or Take Profits. OK? So now, I will choose Always use and since the spread is $100 with the Bitcoin. OK? I will need to write 10 000 of a pips. So, here is the point. OK? Just before the last two and I will give it a little bit bigger range here. The idea here, I don't want to limit with any criteria the strategy builder but to give it a huge range to find more strategies. Now, the Generator settings are where we choose the working minutes, how long time the Generator will generate strategies for us. Normally what I do, guys? I set it approximately to 8-9 hours. Simply, the end of the working day I set the Generator working. And in the morning when I'm in the office I have ready strategies, ready collections and simply the Generator is working while I'm sleeping. So, here what I will choose? I will leave it, for example, to 500 minutes. And here I will select Search best. This is the criteria that we want to arrange our strategies. Net balance, obviously, is the most important which strategy makes the most profit. In of sample and out of sample, I'm not using this one at the moment. I'm not going into details about it. The strategies fulfill the Acceptance criteria. So, what is the Acceptance criteria? We can add many things to the acceptance criteria but the basic is how many ambiguous bars would you like to have. Basically, these are the false bars from the Meta Trader. There are some bars, where the software cannot decide. For example, you see this huge bars with the Bitcoin. And if we have some entry or exit conditions in such huge bar, we don't know exactly what happened inside this day, when the price went up, when it went low. What we know are the four values - the open, the high, the low and the close. But for example, if we enter in the middle, then we have Stop Loss. Then we have a Take Profit if we were selling, for example, the software doesn't know exactly what happened during this day, where the price went first- did it went higher, did it went lower? And this is especially on the daily chart. That's why we do the strategies normally on H1 and H4, sometimes on M30 but very rarely on D1 to avoid exactly these ambiguous bars because on the hourly chart we have less ambiguous bars. OK? So, let's call it simply, these are the false bars where the program cannot decide what happened during this bar and especially on the higher time frames. The next thing is the minimum Net profit, how much minimum Net profit we want to have. So let's say, for example, $100 and what minimum count of trades, we would like to have 50. I will just leave it this way. So here, you can add some more criterias, if you want to the strategy. And what this means, if I go back to the Generator, that it will show only strategies that fulfill the acceptance criteria. Now, if I click on start, you will see here the speed of the software. Its really, really quick, guys. These are the calculated strategies and you see already I have some strategies into my collection. If I go to collection, you will see here that I have one strategy into the collection only. But here is written 8. Now, I have 2. Why is that? This is because I have here these filters - Passed strategies - 2 out of the 8. For example, I have selected 2 strategies filters that I would like to have maximum equity drawdown of 5%. If I just remove that and I remove this minimum profit factor, as well, you will see, I see all the strategies into the collection and they are arranging by the profit. You see, the first strategy made $750. And then we have the others going down. So, from here I can add some filters, maximum ambiguous bar, but we have this in the acceptance criteria. The maximum balance deviation, maximum consecutive losses, count of trades, equity drawdown. This is the thing I was setting to 5%. So, you see here from 31 strategies I have only 10 shown which were having a less than 5% equity drawdown during the whole period. And as well, you can add too many filters here, guys, profit factor as well, I prefer to stay at 1.2. I prefer to stay at 1.5 even and not only 2, so I have a bigger profit factor. Now, the other filters that I normally use here is Maximum consecutive losses. So normally, I don't want to have more than 10 consecutive losses. See for example, if I place 20, I will have more strategies into the collections 7 out of the 70. If I place 10, they will call lower and if I place 15, you will see that I have only 7 and if I place 5, for example, you see only one strategy will pass. So, I will leave it to 10. And what I will do now, guys? I will leave this Generator working for the whole night and tomorrow I will continue recording the course. I will leave it for 500 minutes to work and to generate strategies for me. As you can see the Expert Advisors Studio generated more than 11 000 strategies into the collection are 96. But because of the filters I see only 7 strategies over here. And tomorrow I will continue and I will show you how I am actually exporting a strategy into an Expert Advisor and how to place it on Meta Trader for trading. Now, if I click on each strategy, you can see here are the entry rules. The Stop Loss and the Take Profit. We have the Awesome Oscillator, the RVI single, Moving average crossover. Just what I was showing you, as an example but here is actually an exit condition. And if I click over the chart, you can see the indicators and you can see exactly where the trades happened. Where was the entry. Where was the exit for all of the period. And for each strategy you have the indicator chart, the balance chart, the equity and you have the journal. So, here are the actual trades that happened during this period of time. And here we have all the statistics for each strategy. Net balance, Maximum drawdown, Return/ Drawdown ratio, Count of trades, the Ambiguous bars, Profit per day on average basis, Win/loss ratio, Sharpe ratio and so on so many things that are not going into details. But the idea here, guys, is that we do this automatically. OK? The Expert Advisors Studio calculates for us the strategies. We just need to set up, the inputs that we want, the criterias that we want. And it's very important that these strategies are created over the same server where I will be trading and they're using the same history data. The very nice thing with EA Studio, since it's a web based program, is that during the same time while I am generating these strategies for the Bitcoin, I can open a new page and I will go again to EA Studio. But the important thing here is to make it on a separate browser because this way EA Studio works faster. I will just login here, as well, and I will do the same generation for the other cryptocurrencies. So, I will do it with the Dash now. Also, for H1 chart and then I will go to strategy properties. Here 0.1 and let's see how much was the spread with the Dash. So, if I go to strategy and I select it, you will see it here, the Dash, it's 1100. So, I go back to the Generator, I always put the minimum as spread in here I just give it a bigger range. So, I will use this as a minimum, as well, for it to Take Profit. The Generators settings, also 500 minutes here. Let's see the acceptance criteria. We said we want minimum $100 of profit for our strategies and that's it pretty much. I click on start. And now, the Generator will start creating strategies. Now, I will open in one more browser another EA Studio and I will run there for the Ethereum and I will run, as well, for the Litecoin. OK? So, I'm going to my account, log in, I go to the Generator and let's see first how much was the spread. So, from here I choose Pepperstone-Demo 1 and here I choose Ethereum. The spread was 700, go to Generator. I choose the wanted cryptocurrency. So, I'm going to Ethereum. I select H1, as well, and I'm going to strategy properties, entry lots, 0.1 again, I will enter. I'll put a minimum of 700. As I said this is the spread. Another bigger number here and then 700 here. The acceptance criteria 500 minutes. Let me see here I will put it again. Minimum Net profit of $100. Generator and I click on start. OK? And the last one I will go for.. and I will open one more browser. The last cryptocurrency. OK? I go to EA Studio. I will just quickly log in and I am going to the Generator. And first let's see again the spread, I go to strategy. I choose the broker's server and I choose the Litecoin. So. here I have 500 as a spread. I'm going to Generator, 500 is $5, guys. OK? Because this is in pips to make sure I am clear. Pepperstone-Demo01 and I'm going to Litecoin and I'm going to H1 again. Strategy properties, so the minimum is the spread. Here is exactly like that. I will give a little bit bigger range again. I will go to 0.1, the strategy properties here I will go for 500 minutes again. And acceptance criteria, I would like to have a minimum of $100. I am going to Generator, I click on start and now I have these four generators, as you can see, working over here, guys, and I will leave them over the night. So, tomorrow morning what I will have? I will have ready strategies into the collection, already hundreds of strategies. These are different strategies. What we do after that, we select the best ones and we place them on a demo account for trading. And after that we followed their performance. I will show you how we follow the performance of the Expert Advisors, guys, and we place on a separate live account only the best Expert Advisors. So simply, this way we automate the whole process. And we used these strategy builders in order to create for us hundreds of strategies on a realistic back tested result. So anyway, guys, this process would be impossible if we don't have these strategy builders because even we have some strategies for manual trading. They are not so many and their result it's very hard to be back tested and actually to automate this whole process takes so much time if I use, for example, developers because I was using this system for a long time. I was giving strategies to developers to automate my strategies. Obviously, this was a horrible process, it was taking so much time and so much money because one strategy, one simple strategy like this one to be automated by a developer. That would cost somewhere around $200 to $300, guys, depending on the entry conditions. They charge you even more and they take so much money. Obviously, in the code of the Expert Advisor, of the robot it's very possible to have mistakes. So, with the Strategy Builders, we eliminate the mistakes and we are sure into the code. And obviously, guys, this gives us the opportunity to trade a portfolio of different strategies. So for example, what I will do? I will select the best 3 strategies from the Bitcoin, the best 3 strategies from the Ethereum, the Lite and the Dash and I will have 12 different strategies on 4 different cryptocurrencies and I will place them in one and the same trading account which will give me a good diversification of the risk. OK? So, I will not put all the risk into one strategy, into one Expert Advisor, into one cryptocurrency. But I will divide the risk, I will diversify the risk. So, this is pretty much about it. There are free videos over internet how to use EA Studio. There are free materials, so that's why I'm not going into details, guys, in the help of the EA Studio there is so much more information about each one section. I just showed you the very basic, so you can have an idea what are the Strategy Builders, how we create strategies, hundreds of strategies, actually thousands of strategies because you see here I have already just 3% from the progress and I have nearly 30 000 strategies calculated. Into the collection I see always the top 100 and with the filters that I am using at the current moment I see only 19 strategies. So, I will continue the videos tomorrow and I will show you how I export these strategies and how I put them on Meta Trader for trading. Thank you, guys, for watching. Wish you always, have a great day. Cheers. Bye.