I’m going to show you here how the Excel tool I made works which allows scoring an EA.
This rating aims to highlight if you can trust or not the EA only on the backtest, thanks to that you will be able to avoid some EA that does not have a good trust score. You are free to judge the EA but this tool can help you to make a choice.
This tool is perfect for people who want a safe EA, again if you think you will get rich quick just by buying and installing an EA, believe me it’s not that easy.
In this tool you have only one sheet, to protect from bad manipulations I put a password: “eazone” it’s just to avoid erasing the formulas without wanting it.
Downloadable on the Discord.
All the boxes in “Orange” are the boxes to fill for the test, the boxes in grey are the formulas.
You have a box to write the name of the EA and maybe some other condensed information.
Then you have the P1, P2 and P3 which means “Period”, I recommend for P1 select all the history, P2 from 2010 to today and finally P3 from 2015 to today. For the 3 periods, it is important to use the same parameters and not to change them, as well as not to change the settings, only change the dates.
You must also say if for the backtest you used a Grid or martingale, put a SL, a TP, say if there is a Money management and if the EA is sensitive to its environment.
- To know what is a Grid or Martingale, I refer you to my criteria page or you can do a search on Google.
- Attention SL and TP must be present! that is to say that they are declared for your broker, your broker knows that the position has a SL and a TP, often it is the EA that closes without declaring SL or TP, it is important that it is the broker who closes the positions and not your EA.
- When I talk about money management, it is a very precise management in percentages, that is to say that you know exactly how much capital you risk per position. What is not money management is giving a fixed lot size or a variable lot size every xxx of capital.
- Sensitive to its environment, there is EA that works only with a few brokers (sometimes dubious), with a VPS ultra efficient (it sometimes goes with the latency of less than 1 ms …) very sensitive to Spread and Slippage. Basically, without this, EA only makes losses.
We are talking about the Risk Reward, the Profit Factor, the Recovery Factor and the Sharpe Ratio.
For the Risk Reward you just have to take the average gain per trade and divide it by the average loss per trade, you get a result that you can round to the second decimal place.
When the others are found directly in the backtest report. You will have to fill in the 3-column table (with the orange boxes).
Once you have filled in the whole sheet, you will have a final score that will help you in your choices.
Enjoy your trading!