This Expert Advisor builder software for Windows is going to be of great interest to anyone who uses Metatrader 4 and wants to develop their own forex robot expert advisors.
Genetic Builder by Mark Fric is an amazing program that can:
- develop profitable trading strategies for any timeframe or market, completely from scratch
- automatically forward-test strategies and discard unprofitable ones
- generate a fully-editable Metatrader 4 Expert Advisor of your strategy, with just one-click
In this review, I’ll be taking a detailed look at a piece of software that got me so excited, I’ve been using for hours every day since discovering it last month.
Let’s be clear on exactly what an expert advisor builder is: it’s a software application that generates trading strategies by testing millions of combinations of indicators and trading ideas against years of historical data and then generates a tradeable expert advisor automatically. You don’t need to have any ideas of your own: you simply tell Genetic Builder which indicators & order types you want to use (“building blocks”), the kind of stoploss and profit target you want, which market you’re trading and which timeframe. Once started, the software will test every possible combination at a rate of about one strategy every second !
Pretty quickly you’ll end up with a lot of found strategies, so you’ll need to tell Genetic Builder what you consider a “good” or “bad” strategy: these are known as ‘Custom Conditions’. Now, this is highly subjective, but for example if you have the kind of personality where you hate to lose, then you’ll prioritise your win/lose ratio. Alternatively, if you care more about profit than being right a lot, then you’ll prioritise net profit or perhaps profit factor.
One of the most useful features of Genetic Builder is it’s ability to split (the supplied) historical data into two sections: these are known as in-sample (IS) and out-of-sample (OOS). The expert advisor builder uses the IS data to generate strategies. When it finds a strategy that meets your requirements (high percentage wins, high profit, etc.) it then automatically tests the strategy, without changing any parameters, on the OOS data. This closely simulates what you or I would do after finding a strategy that was profitable in the past: we would start trading it without changing any of it’s parameters.
If a strategy is profitable using both IS and OOS then that is a very good sign for future profitability.
So, the fact that Genetic Builder takes care of this testing for you is a major timesaver.
REVIEWING YOUR STRATEGIES
Thanks to the IS/OOS testing and the Custom Conditions, you now have a number of strategies that have passed some major hurdles and are worthy of further investigation. What you choose to do next is again a matter of subjectivity or personal opinion, but one of the most obvious things to do is to look at the equity curve of each system: does it go up in a reasonably straight line, such as the one above ? Or does it go sideways ? Or perhaps, maybe most of the profit was in the early part of the IS data, and it only barely gained since then.
Fortunately, Mark has again found a way to automate this as much as possible, and you can actually filter out any strategy that does not have a reasonably straight equity curve (“stability”).
So, what I do next is to take the strategies that have been created by the expert advisor builder, on – in my case – EURUSD and test them on a different market, using the same timeframe. I like to test on USDCHF first because it has a high correlation with EURUSD: if a strategy is not at least 75% as “good” on USDCHF as it was on EURUSD then I would reject it. Next I’d try GBPUSD and then one of the Yen pairs such as USDJPY.
IT’S ALL IN THE GENES …
However, another major feature of Genetic Builder, and the one that gives it its name, is the use of Genetics. Up until now, I’ve only been discussing strategies created from a random combination of building blocks. Genetic Builder can also generate strategies using genetic algorithms, either from scratch or by using the best strategies you discovered by random generation. This is a feature I’ll come back to on another day, but it adds a whole new level of search capability to the program.
EXPERT ADVISOR BUILDER
Of course at the heart of the software is the MQ4 code generator. There’s not much to say about this as it just … works !! Any strategy that you are interested in trading, simply click the ‘Save to File’ button on the Source Code tab, and you instantly have an MQ4 file that you can bring into Metatrader 4 and start trading immediately. If you know a bit about MQL4 (the programming language used by Metatrader) you can even amend the template that Genetic Builder use to generate the expert advisors.
When I first started using Genetic Builder I had a ton of ideas on how to improve it, and quickly gave Mark the benefit of my opinions ;) He has already started incorporating many suggestions from my wishlist, including some fundamental changes to the kind of strategies that get filtered out automatically by the expert advisor builder. I’ve found him to be one of the most responsive developers I have ever encountered and he is genuinely interested in user feedback to improve the software for everyone’s benefits. He has some major features planned for future versions such as Monte Carlo analysis, Metatrader 5 compatability and automatic testing on multiple timeframes &/or multiple markets.