Strategy Normalizer

Normalizer

The Strategy Normalizer tool in EA Studio ensures that your strategy is neat and its main task is to enhance its performance.

It is much better when a strategy consists of fewer components and the parameters of its indicators are intelligible.

In order to open the Normalizer, just click on Strategy from the main menu of the program.

Toolbar

forex strategy normalizer toolbar

The Strategy Normalizer has the same control buttons as the Optimizer. They have the same function as well.

Strategy Parameters

In this tab, you can view the values of the indicators that you have set. After that, in the "Normalized" section you can see if there are any changes to them.

Normalizer Settings

forex strategy normalizer settings

Remove Take Profit - it tests if the strategy has a higher performance without using a Take Profit.

Remove needless indicators - if it detects that there are indicators that do not benefit the strategy in any way, it removes them. This makes the strategy faster and it prevents the over-optimization.

Reduce Stop Loss - as long as the strategy is still profitable, making the stop loss smaller creates a move favorable risk to reward ratio and decreases the maximum loss.

The creators of EA Studio have not added an option for stop loss removal in order to keep the strategy safe.

Reduce Take Profit - another way of improving the strategy's performance is to decrease the take profit so that it is reached quicker and more often than the stop loss.

Normalize indicator parameters - most traders will advise you to use the default settings of the technical indicators. The creators of the technical indicators have put a lot of effort until they find their best workable values.

But EA Studio will give you the best parameters for the indicators based on the Historical data that you use.

How Does The Strategy Normalizer Work

Let us have a look at the following example where we have an AUDUSD strategy with a take profit of 2000 pips.

It is less probable for this profit to be hit, so the Normalizer removes it in order to calculate the strategy's performance.

This is the process the Normalizer goes through:

  1. In case you select the “Remove Take Profit” option, the Strategy Normalizer modifies the strategy.
  2. Runs a backtest of the strategy.
  3. Performs a strategy validation against the Common Acceptance Criteria (in case they are enabled).
  4. Calculates the quality of the strategy in accordance with the “Search best” option.
  5. If the strategy passes the validation and has an equal or better performance than the original one, it applies the "Remove Take Profit" setting. If not, the Strategy Normalizer restores the old strategy.

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