burrup.lambert wrote:1. This one can be a "doozy". In general there is less noise in the higher timeframes (> H1) but it depends on what you mean by "reliable". I would say as a general rule that the lower the timeframe the more often you will need to swap out strategies that become unprofitable. Personally, I don't trade anything less than M15, mainly to decrease the risk of adverse moves due to news events and to decrease trading costs like spread and slippage.
Yes lower time frames may seem to have more noises (if you don't know how to filter them out). However, lower time frames EA is more versatile and reacts faster than higher time frames. EAS open and close based on Bar Open/Close data and imagine using a H4 EA that only open or close on 4 hours intervals! In a volatile market like forex, can a strategy be robust with such lagging reaction? Can a lagging EA consider as "stable" just because we use a longer time frame data does it mean you are using a more stable execution? Data vs Execution is a different ball game. Like driving, you use a Big Map (data) to plan which is the shortest route to a particular destination but when we are driving, we use a GPS (real time execution) to navigate us with real time response to get from point A to B. Imagine using a GPS that will only update your driving position every 4 hours, you would have missed your turning points and go off the course. Unless the trading style is position holding whereby the EA is supposed to trade and hold positions for weeks or mths. I personally only use M1 time frame EA and don't venture anything more than M15 (maybe in future if I want to develop position trading EA but not now).
burrup.lambert wrote: Because you are heavily exposed to the USD. 4 pairs with USD, and 1 each with AUD/JPY/CAD/EUR.
Provided you are using the same EA for all these different pairs and hence you are overly exposed, i.e the EA has the same risk management in terms of TP, SL and trading rules, hence the EA can repeat it's mistakes in all these different pairs. Whereas, If I were to use different EA/strategies/trading theory, I may not be overexposed because I'm not using the same decision-making strategy (EA) to repeat my "mistakes" elsewhere in other pairs. With different EA/trading styles installed in different pairs, I may not be necessarily overexposed. It all depends on what do we mean by exposure (risk or market conditions). If it's about risk, different EA or trading style has different risk exposure (SL, TP, trading rules). If it's about market conditions such as volatility, then different EA has different trading styles/rules such as swing, scalper, intraday etc to handle these different market conditions. So besides just plainly looking at the currency pairs, we also need to examine our portfolio composition of EA/trading rules etc.
burrup.lambert wrote: When I generate strategies I also don't care about PAIR correlation, like EURUSD and GPBUSD. I do not care that the pairs in general are correlated, what is important is that the individual strategies that are generated do not have balance/equity curves that are correlated to each other. This can be performed using the EA Studio setting "Detect balance lines correlation" for strategies generated on the same pair. For different pairs (like EURUSD and GBPUSD) you are going to have to run them on a demo/live account then perform a correlation analysis.
Getting back to the main part of the question, you might consider generating strategies on higher time frames to negate "wild swings".
Balance line correlation does not necessary mean that the EA has the same trading styles. It's like assuming if you are in the same income group, you must be in the same profession. The same group of people who earns $10k a mth, does not mean they must be in the same profession. Likewise, you can't really distinguish the EA simply by their Balance line correlationship. For example, 2 very different strategies that somehow has very good entry and exit rules, they both would have the same balance line profile. The balance line is a reflection of the accumulative net profit the EA make, not a reflection of the types of strategies it contains. We can't read too much into the balance line to determine what kind of strategies is contained in the EA, unless you are going to zoom into the balance line to examine it closely. But if you are backtesting it over large data period, I personally don't think the balance line is a good indication of whether the strategies have closely correlation entry/exit rules because I have a number of EA that have the similar balance lines but these EA are made up of different trading rules and have different trading behavioral and trading metric performances.
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