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eas-guide:monte-carlo

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eas-guide:monte-carlo [2018/01/09 12:48] – yavoreas-guide:monte-carlo [2018/01/09 13:08] – yavor
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-**Execution problems** - Those are related to problems when executing the signals given by the strategy to the broker.+**Execution problems** - Those are related to problems when executing the signals sent from the Expert Advisor to the broker.
  
-    * **Randomize slippage** - Slippage is present on markets, where the prices change fast. It might happen that the price changes by one or two ticks, while the the order gets to the broker and gets executed there. If you enable this option Monte Carlo will sometimes add a slippage in a direction contrary to the direction of the position. In the Options you can set how often to use slippage and how much the slippage should be. +    * **Randomize slippage** - Slippage is present on markets, where the prices change fast. It might happen that the price changes by one or two ticks, until the the order gets to the broker and gets executed. If you enable this option Monte Carlo will sometimes add a slippage in a direction contrary to the direction of the position. In the Options you can set how often to use slippage and how much the slippage should be. 
-    * **Randomly skip position entry** - Will just skip opening some of the positions. This sometimes happens in the real world. It might occur due to problems on the broker side, internet connection issues or slowness in the machine executing the strategy. +    * **Randomly skip position entry** - Will skip opening some of the positions. This sometimes happens in the real world. It might occur due to problems on the broker's side, Internet connection issues or slowness in the machine executing the Expert Advisor. 
-    * **Randomly skip position exit** - Will sometimes skip exiting the position. This one of course is much more important. Not opening a position is not so destructive since we won't lose any money. But not closing a position might result in a loss. +    * **Randomly skip position exit** - Will sometimes skip closing the position. This one of course can be very destructive to the strategy. **Not** opening a position is not so bad since we won't lose any money. But **not closing** a position might result in a loss. 
     * **Randomly close position** - This happens only occasionally. Your broker might close your position for some reason. Of course brokers who close your positions when they find suitable are not brokers you should be trading with.     * **Randomly close position** - This happens only occasionally. Your broker might close your position for some reason. Of course brokers who close your positions when they find suitable are not brokers you should be trading with.
  
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-    * **Randomize indicator parameters** - EA Studio comes with this option off by default. This is because usually strategies do not change. If enabled will choose some of the indicators in the strategy and change their numeric values by a certain percentage. If you have an over-optimized strategy, even minor changes in parameters will make its profits drop significantly or will even lose money.+    * **Randomize indicator parameters** - EA Studio comes with this option off by default. This is because usually strategies do not change. If enabled EA Studio will choose some of the indicators in the strategy and change their numeric values by a certain percentage (only for the test). If you have an over-optimized strategy, even minor changes in its parameters will make the profits drop significantly or the strategy will even lose money.
     * **Randomize backtest starting bar** - will randomize starting bar of the test. Sometimes starting at a different point in time might bring your account to zero in a very short period.     * **Randomize backtest starting bar** - will randomize starting bar of the test. Sometimes starting at a different point in time might bring your account to zero in a very short period.
  
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 {{ :eas-guide:monte-carlo-simulations-chart.jpg |}} {{ :eas-guide:monte-carlo-simulations-chart.jpg |}}
  
-By the default running the Monte Carlo tool will result in 20 colored lines drawn on the **simulations** chart. You can see if the lines are grouped and what is the end result of each backtest. This can easily show how destructive the simulations "noise" was for the strategy.+By the default running the Monte Carlo tool will run 20 tests with randomized data. The randomization of the data will be done according to the **Simulations** checklist and the values in the **Options** tab. 
 + 
 +Each of the tests will be drawn on the **Simulations chart** with a colored line. You can see how the lines are grouped and what is the end result of each backtest. This can easily show how robust the strategy was and how destructive for it the randomized environment and data turned out to be.
  
 ===== Confidence table ===== ===== Confidence table =====
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 The first column shows the percentage of tests that showed results better than the current row. “Confidence” column shows the probability for the profit to be higher than the “Net Balance” value. The first column shows the percentage of tests that showed results better than the current row. “Confidence” column shows the probability for the profit to be higher than the “Net Balance” value.
  
-For example in the screenshot above, you see the last row shows 100% confidence. This assures us if we have traded this strategy, we could expect it to make at least 351 over the given period. This of course if based on 20 random tests and has a great risk of being incorrect.+For example in the screenshot above, you see the lowest row shows 100% confidence. This "assures" us that if we have traded this strategy, we could expect it to make at least 351 over the given period. This of course if based on 20 random tests and has a great risk of being incorrect as soon as we run the tests or trade the strategy on a live account.
  
 The tool is only named "Confidence Table" to be easily to recognized by traders who used it in other software. However neither here, nor in other software is the Confidence Table about confidence. It's only a tool that groups the results from the **random** tests in the **past** and shows us how many of them succeeded and how much did they succeed. This means that if you rerun the Monte Carlo tests almost certainly won't get the same results.  The tool is only named "Confidence Table" to be easily to recognized by traders who used it in other software. However neither here, nor in other software is the Confidence Table about confidence. It's only a tool that groups the results from the **random** tests in the **past** and shows us how many of them succeeded and how much did they succeed. This means that if you rerun the Monte Carlo tests almost certainly won't get the same results. 
  
 <WRAP center round important 60%> <WRAP center round important 60%>
-Monte Carlo uses historical data therefore it cannot guarantee or predict the strategy's future success. At best it can only point out if a strategy is over-optimized for the market data we have.+Monte Carlo uses historical data therefore it cannot guarantee or predict the strategy's future success. At best **it can only point out if a strategy is over-optimized** for the market data we have.
 </WRAP> </WRAP>
    
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 {{ :eas-guide:monte-carlo-options.jpg |}} {{ :eas-guide:monte-carlo-options.jpg |}}
  
-  * **Count of tests** - lets you choose how many test you want to run and display.+  * **Count of tests** - choose how many tests you want to run.
  
 All the options below will apply to the tests **only** if they are enabled from the **Simulations** checklist All the options below will apply to the tests **only** if they are enabled from the **Simulations** checklist
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 **Execution problems** **Execution problems**
  
-  * **Maximum slippage (points)** - how much can the maximum Random slippage be in points+  * **Maximum slippage (points)** - how much can the maximum Random slippage can be in points
   * **Skip entry probability %** - For each new entry there will be a probability (default 2%) to skip opening the position.   * **Skip entry probability %** - For each new entry there will be a probability (default 2%) to skip opening the position.
-  * **Skip exit probability %** - For each exit there will be a probability (default 2%) to skip closing the position.+  * **Skip exit probability %** - For each exit there will be a probability (default 2%) to skip exiting the position.
   * **Close position probability %** - What is the chance to close a position in each bar.   * **Close position probability %** - What is the chance to close a position in each bar.
  
 **Strategy variations** **Strategy variations**
  
-  * **Indicator change probability %** - chance to change an indicator parameter value. By default only 20% of the parameters will be changed and 80% of the parameters will remain unchanged +  * **Indicator change probability %** - chance to change an indicator parameter value. By default only 20% of the parameters will be changed and 80% of the parameters will remain unchanged. 
-  * **Indicator max change %** - shows how much the changed parameter’s value can fluctuate.+  * **Indicator max change %** - shows how much a changed parameter’s value can deviate from the original value.
   * **Minimum deviation range** - by default 20 steps. This setting is meant for indicators that have parameters with very low values where changing the value by 20% won't do much difference. In such cases the **Minimum deviation range** will be used and the indicator will be changed by 20 steps (by default) or however much you set.   * **Minimum deviation range** - by default 20 steps. This setting is meant for indicators that have parameters with very low values where changing the value by 20% won't do much difference. In such cases the **Minimum deviation range** will be used and the indicator will be changed by 20 steps (by default) or however much you set.
  
  
  
-  * **Reset** - resets all the fields within Simulations and Options to their default values.+  * **Reset** button - resets all the fields within Simulations and Options to their default values.
  
 ===== Validation ===== ===== Validation =====
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