EA w/ a 60% drawdown - Is it still good? | Forex Factory

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EA w/ a 60% drawdown - Is it still good?

  • #1
  • First Post: Jun 16, 2019 7:06pm Jun 16, 2019 7:06pm
Hey guys i am looking to buy and ea from someone that has been showing good results has over a 91% win rate but has a draw down of 60% Is it still a profitable EA? Need some advice
  • #2
  • Jun 16, 2019 7:31pm Jun 16, 2019 7:31pm
Quoting mikethadon
Hey guys i am looking to buy and ea from someone that has been showing good results has over a 91% win rate but has a draw down of 60% Is it still a profitable EA? Need some advice
Win rate alone means nothing ... It must be combined with Risk Reward to define if an EA is profitable.

1/ An EA can be profitable with 1% win rate

2/ An EA can be a loser with 99% win rate

All depend on the Risk Reward (R:R).

And keep in mind that "profitable" doesn't mean "not risky" ... Hence the DD is important. The 60% DD you are pointing is quite on the high side.
MT4/MT5 EAs/Indicators/Alerts coder
  • #3
  • Jun 16, 2019 8:31pm Jun 16, 2019 8:31pm
Quoting mikethadon
Hey guys i am looking to buy and ea from someone that has been showing good results has over a 91% win rate but has a draw down of 60% Is it still a profitable EA? Need some advice
i dunno whether that EA has money management options.. if it has try recuding risk percentage or lot size then test it for some time...figure out how it works, grid or martingale or something.if so better leave this Ea
Still learning. Telegram @TraderJaya
divergence scalping All Time Return: -99.8%
  • #4
  • Jun 16, 2019 8:32pm Jun 16, 2019 8:32pm
Quoting FerruFx
{quote} Win rate alone means nothing ... It must be combined with Risk Reward to define if an EA is profitable. 1/ An EA can be profitable with 1% win rate 2/ An EA can be a loser with 99% win rate All depend on the Risk Reward (R:R). And keep in mind that "profitable" doesn't mean "not risky" ... Hence the DD is important. The 60% DD you are pointing is quite on the high side.
Okay i see what your saying, its a 1 min scalper ea that goes for 10 pips each trade. the backtest seem to be great but there is there is no SL. Its hard to judge, the ea goes for highs and lows as a start so the guy im buying it from says there couldnt be a SL, What he said to me exactly was
" [16.06.19 10:06]
it predicts through the high and lows
, [16.06.19 10:06]
if there was a sl there wouldn't be any take profits hit"

Here are some screen shots below thanks for the response
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: Back tests results.jpg Size: 180 KB
Click to Enlarge Name: Back test.jpg Size: 43 KB
  • #5
  • Jun 16, 2019 8:36pm Jun 16, 2019 8:36pm
Quoting FerruFx
{quote} Win rate alone means nothing ... It must be combined with Risk Reward to define if an EA is profitable. 1/ An EA can be profitable with 1% win rate 2/ An EA can be a loser with 99% win rate All depend on the Risk Reward (R:R). And keep in mind that "profitable" doesn't mean "not risky" ... Hence the DD is important. The 60% DD you are pointing is quite on the high side.
It did well on usdjpy, only had a 34% dd with no SL lot size 0.1 on m1 10 pips each trade it was a 2 week backtest
  • #6
  • Jun 16, 2019 8:37pm Jun 16, 2019 8:37pm
Quoting vijiragavan
{quote} i dunno whether that EA has money management options.. if it has try recuding risk percentage or lot size then test it for some time...figure out how it works, grid or martingale or something.if so better leave this Ea
Okay thanks man if i decide to buy i will deff mess with it but im afraid because there is no SL lol
  • #7
  • Jun 16, 2019 9:11pm Jun 16, 2019 9:11pm
Quoting mikethadon
{quote} Okay thanks man if i decide to buy i will deff mess with it but im afraid because there is no SL lol
haha ok.. if there is no sl then better leave it...
Still learning. Telegram @TraderJaya
divergence scalping All Time Return: -99.8%
  • #8
  • Jun 16, 2019 9:29pm Jun 16, 2019 9:29pm
Quoting vijiragavan
{quote} haha ok.. if there is no sl then better leave it...
True i know but look at that backtest! lol ughhhh its so hard thats only after 2 weeks man, 10,000 of 1k$ he sent me the video to of the back test
  • #9
  • Jun 17, 2019 5:48am Jun 17, 2019 5:48am
what you can do against high DD is lower the risk. but if it has no SL, and the EA si not intended to be a no SL EA (not hedged) or it has no exit strategy, then it's not a good EA IMHO, meaning one day you'll have a bad trade that will grow and grow but on the losing side, and then what do you do ? unless the profits cover it but i highly doubt it
  • #10
  • Jun 17, 2019 6:04am Jun 17, 2019 6:04am
Quoting ionone
what you can do against high DD is lower the risk. but if it has no SL, and the EA si not intended to be a no SL EA (not hedged) or it has no exit strategy, then it's not a good EA IMHO, meaning one day you'll have a bad trade that will grow and grow but on the losing side, and then what do you do ? unless the profits cover it but i highly doubt it
Yeah thats what i was thinking to, because whats going to happen if the maket starts really trending in one direction one day. At the same time In the backtest video that happened and there was still profit made because he said its based of highs and lows lmao so idk man. Its a russian EA and those guys are amazing when it comes to indis and EA stuff lol. My mind is telling it doesnt make sense that these results are so good but the ea's back test say its one of the best out there
  • #11
  • Jun 17, 2019 6:05am Jun 17, 2019 6:05am
Does anyone here think that the backtest really can not be trusted? Because he backtested it on a few pairs like EUR/USD, GBP/USD and USD/JPY All having about the same results of about 60% dd. USD/JPY had the lowest dd of 34%! this ea is a scalping ea that opens tons of trades for 10 pips each. in 2 weeks on USD/JPY backtest it turned the 1k to 10k lol thats a 1000% gain and on GBPUSD in 2 weeks it turned the 1k to 5k thats a 400% gain and on EUR/USD it turned 1k into 8k thats a 700% gain! lot size used is 0.1... Its a Russian scalper EA, based of the screen shots he sent me it uses no SL! he says the strategy is based on highs and lows is there anyone that can explain to me how this ea is able to survive with out a SL on m1 with a 10 pip tp opening positions based of highs and lows
  • #12
  • Jun 17, 2019 6:18am Jun 17, 2019 6:18am
Quoting mikethadon
{quote} True i know but look at that backtest! lol ughhhh its so hard thats only after 2 weeks man, 10,000 of 1k$ he sent me the video to of the back test
Hi mikethadon,

Here are some things to consider - 1k to 10k in 2 weeks - why wouldn't a bank buy it off them if it is that good? 2. Why are they even selling it? A big question to ask I think. I have many EA's that have been coded and they all work in different types of market conditions but none of them are a set and forget option. I mainly use them for entries or when I am going to be away from the screen for extended time (99% of them were coded for me buy Ferru FX - great job Ferru as always!). I originally thought it would be easy to get an EA to do what I do - I was very wrong! So many small things come into play when trading that most EA's can never be coded for. If you treat it as a tool that can assist you then all good.

In the samples, you showed trades at .10 lots on a $1000 account for a starter - 10 of those is a full lot so you would need to be running very high margin. Assume you have 10 open and they are all going negative, a 1k account is going to be in trouble pretty quickly. Also, remember in a backtest there is no slippage, price gaps, requotes and so on. So many other factors can influence the result. I have an ea that closes out in sequences that may take a half a second or more and that can have a big impact in a fast moving market.

Anyway, just be careful! I am fairly sure I know the EA you are looking at and I hope it works OK for you and wish you good luck.
Cheers
maahome
  • #13
  • Jun 17, 2019 6:29am Jun 17, 2019 6:29am
Quoting maahome
{quote} Hi mikethadon, Here are some things to consider - 1k to 10k in 2 weeks - why wouldn't a bank buy it off them if it is that good? 2. Why are they even selling it? A big question to ask I think. I have many EA's that have been coded and they all work in different types of market conditions but none of them are a set and forget option. I mainly use them for entries or when I am going to be away from the screen for extended time (99% of them were coded for me buy Ferru FX - great job Ferru as always!). I originally thought it would be easy to...
Damn thats a powerful argument "1k to 10k in 2 weeks - why wouldn't a bank buy it off them if it is that good?" Didint even think of that, thats true, honestly im thinking majority of the thoughts your thinking haha thanks for the words of wisdom brohter! I use coinexx so the spreads are little to nothing they offer 500x leverage but slippage, price gaps, requotes did not come to my mind honestly so thats true. Its on the m1 so as soon as a position opens another closes you get what i mean? based of the backtest video there will be many open at the same time but many positions closing at the same time. So for example if the EA took the 1k account to 10k at that very moment the account isnt at 10k because the equity is lower because of drawdown. the equity would be like 9, 500 or like 9,800 you get get what im saying?
Attached Image (click to enlarge)
Click to Enlarge Name: photo_2019-06-16_10-04-42.jpg Size: 269 KB
  • #14
  • Jun 17, 2019 8:58am Jun 17, 2019 8:58am
Quoting mikethadon
{quote} Here are some screen shots below thanks for the response {image}
____
With that "n/a" modeling quality, all your tests potentially be pointless.
L.L.L.T
  • #15
  • Jun 17, 2019 10:35am Jun 17, 2019 10:35am
Quoting KayStreet
{quote} ____ With that "n/a" modeling quality, all your tests potentially be pointless.
These arent my test, these are test from the guy that im buying it from. What is the "n/a modeling" can you show me on the screen shot so i can point it out to him
  • #16
  • Jun 17, 2019 11:13am Jun 17, 2019 11:13am
If an SL is applied and it is not profitable anymore, what is your judgement? It has very high DD, so with an SL the loss(es) would have been effectuated...and the performance affected...can you stand this big a DD in the knowledge it could wipe out your entire equity any moment? Try a test with a valid quality (i.e. every tick), or a forward test, or interpolate the effect of an SL manually. If the test is so bad that it uses only close values, the DD could even be bigger. All questions can be answered this way. Mostly, an SL is removed to pertain an EA's profitability, which wouldn't be workable irl.
  • #17
  • Last Post: Jun 17, 2019 12:26pm Jun 17, 2019 12:26pm
Quoting mikethadon
{quote} These arent my test, these are test from the guy that im buying it from. What is the "n/a modeling" can you show me on the screen shot so i can point it out to him
probably you are not ready for EA trading, looking at the pict, most probably it is a grid EA, this type of EA works...... until it doesnt...
Backtest can be manipulate, i prefer forward testing.
making money is easy in forex, losing money is even easier...
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