Twenty Criteria for Screening Expert Advisors
Summary
This article proposes a rejection checklist for evaluating automated trading systems before adding them to a portfolio. Its criteria cover operational independence, errors and restrictions, spread and commission sensitivity, broker dependence, scalping and execution assumptions, risk controls, and the distribution of trades and returns over time. It also recommends checking whether results hold across parameter choices and account sizes, and comparing backtests with live performance.
The author suggests using a demo version and strategy-test logs to examine many issues before purchase, then monitoring a paid system in live conditions to identify gaps between simulated and actual results. Profitability is considered alongside drawdown, trade frequency, recovery, and profit factor. The checklist reflects the author’s experience and judgments rather than a validated scoring model; criteria such as acceptable trade counts or parameter robustness are not rigorously quantified. Live testing also introduces cost and capital risk, and past agreement between tests and live results cannot guarantee future performance.
Key ideas
- Screen for systems that require ongoing manual intervention, author assistance, or narrow operating conditions.
- Check logs, broker and spread sensitivity, commissions, and execution assumptions before relying on test profits.
- Assess trade distribution, performance across time periods, parameter sets, and account sizes.
- Set risk and capital exposure controls, and compare live behavior with backtest results.
- Treat the checklist as experience-based guidance rather than a validated guarantee of future performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.