Monday, December 29, 2008

How can I tell if panic mode has been triggered?

If you run the optimizer on the AME Cross Trader, you are likely to find hundreds of combinations that end in profit. Unfortunately, many of those combinations never survived the whole time period of the backtest. Instead, they ended prematurely due to a "panic mode". So how do you tell which ones made it all the way through and which ones didn't? Here's how...
  1. Sort the optimization results by profit.
  2. Double-click the highest profit result to load those parameters into the tester.
  3. Run a back-test and view the results.
  4. If the very last trade is closed by the EA instead of by stop loss or limit, then panic mode was triggered. This is not 100% accurate but pretty close.
Sometimes panic mode is a good thing, though, so don't discard it altogether. If you find a combination that has alot of trades, high profit factor (2.0+) but reaches panic mode near the end of the time period, then this is a fantastic combination that will probably work for you for several months without reoptimization.

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