Trading Strategy Optimization (User Guide)

In this video-Trading Strategy Optimization., we will be discussing the strategy optimizer.

Now, the role of the trading strategy optimizer is to improve existing trading strategies. To get access to the tool, simply select the strategy, and in the taskbar, click on Optimizer.

Now, we strongly recommend that you optimize only your strategies that are profitable. And the reason for that is let's say that you use the Forex strategy optimizer to fix a losing strategy, it might just make you trade less, and in this way, you will simply lose less money.

However, it doesn't mean that it will start making you money. Once you go into the optimizer, what you'll see is that there is a taskbar.

The first thing is the Start button, and this you can click to start or stop the optimizing process.

The second is the Progress, indicating how far a strategy has been optimized at the current point in time.

And the last is the Calculated, which shows you how many variations of the strategies have been calculated so far.

And the goal of the Forex strategy optimizer is to accomplish better backtest results by trying out various alternatives to the strategy.

Below the taskbar, you'll find the parameters that you can optimize. Simply select or unselect any of those that you want to change or to optimize.

Then we have the settings. In the settings, we have Out of Sample, Numeric value range, and Search best.

With the Out of Sample, the program runs an Out of Sample test over the optimized variance of the strategies, and the ones that pass the test are the ones that we take into account.

Then we have the numeric values range, and the value set here will be added to the current value of the indicator. So let's say, for instance, that the value of an indicator is 35.

After that, you set the numeric value range to plus-minus 20 steps and the step to 1. As a result, the minimum value of the parameter will change from 35 to 15, and the maximum value will go from 35 to 55.

And lastly, we have Search best. And here, we will set the value that we wanted to search best on and compare the different variations of the current strategy. As soon as it finds a better variation of the older one, the new modified strategy will replace it according to the option that we choose here.

Below that, you'll see the checkbox to Optimize Stop Loss and Take Profit. With this selected, the Forex strategy optimizer finds better values for the Stop Loss and the Take Profit.

Below that, we have to Optimize preset indicators.

If we enable this option, all of the parameters can be used for trading strategy optimization. If you disable them, they will no longer be included in the strategy parameters.

Then we have the Use the optimizers Acceptance criteria. This will be additional criteria that your strategies will need to meet.

Below that, we have to Use the common Acceptance criteria. Again, please note that it says common. So when we click on that, it will take us to the tools menu to the Acceptance criteria.

And here, you can add, remove, or change any of the Acceptance criteria.

Lastly, we can add the optimized strategy to the collection, and once the tool has optimized the strategy, it will be added to our collection.

And lastly, we have the Acceptance criteria tab, and this tab provides us the opportunity to add specific Acceptance criteria to the overall backtest or separately for the In Sample and for the Out of Sample trading parts.

And just like the Acceptance criteria in the tools menu, if you want to add or remove anything, you can simply click on it, add what you want, you could remove something by clicking on the red X, or you can change any of the values once you've added them.

So let's run a quick optimizer on this strategy that we have in front of us just to demonstrate what the optimizer can do.

If you want to learn more, watch the whole video - Trading strategy optimization.

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