Oh yes, I forgot. Hats off to rookie detective. We bow down to you, his lordship. Am I missing something here? What is this system?
This looks like just a variation on No Stop Loss system that only ever has one loss. Because that loss is a 100% loss of the account balance
As I said before, ANY system that uses a Stop Loss equal to 60% of the account balance is guaranteed to crash and burn. Because the Stop Loss is so large, it will not be hit very often. But when it does, it will burn the account.
Just like a system that trades with NO stop loss, the Stop Loss will not usually be hit for many trades. But when it is hit, it is a 100% loss of the account balance
Reducing the risk will dramatically increase the number of times it will hit the Stop Losses.
Reducing the risk means to decrease the leverage not the SL, so no, it won't effect the winning rate. It will effect the percent gains, however.
This statement is incorrect. Reducing the capital risk will have no effect at all upon the number of times a stop loss will be hit.
Hotch
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I wouldn't say guaranteed. Rather depends on the system. Some systems are less likely to crash and burn on 60% risk than some are on 1% risk.
So the Stop Loss would be maintained at 60% of the account balance. What are the other parameters of this system?
An erudite comment.
There are, indeed, many factors that will have an effect upon whether a stop loss is hit and therefore affect the likelihood of losses.
A 'high probability trade', as part of a proven system, is worthy of a higher risk than a pot luck entry.
Let me see if I can explain. If I choose to risk 50% of my account and I know ahead of time that my stop-loss is 100 pips, I need to leverage according to the SL with regards to my balance. If my balance is $1,000 what would I need to risk per pip? Well, 50% of $1,000 is $500. So, $500 is what I have to risk. Therefore, 500 / 100 pips is $5.00 a pip. If a trade goes neg 50 pips, that would be -$250 or -25% of the balance. If it goes neg 100 pips, that would be -$500 and -50% of my balance.
I hope that makes it clearer.
Let me see if I can explain. If I choose to risk 50% of my account and I know ahead of time that my stop-loss is 100 pips, I need to leverage according to the SL with regards to my balance. If my balance is $1,000 what would I need to risk per pip? Well, 50% of $1,000 is $500. So, $500 is what I have to risk. Therefore, 500 / 100 pips is $5.00 a pip. If a trade goes neg 50 pips, that would be -$250 or -25% of the balance. If it goes neg 100 pips, that would be -$500 and -50% of my balance.
I hope that makes it clearer.
Thanks very much for the Intro Lesson of Evaluation of Trade Risk 101 I have sent you a PM
Hello tkbieber,
Looking at your account 2, there seems to be an error in each of the trades. Each of the trades are placed in advance to be started at 7.15am GMT
My question is, If you are placing all your trades in advance, how can you have your stop losses below your sell orders?
For example, in the last trade (2011.08.25) your opening price was a sell at 1.6371. Your stop loss was 1.6369. This is BELOW your sell at 1.6371. How does this happen?
It happens the same on your buy orders. All your buy orders have stop losses ABOVE your opening buy price
How are you doing that?
What you are seeing is correct. What is happening is when the market gets to a per-defined point in the positive direction, the SL moves from -250 to above the buy or sell line. Basically, I am after 25 pips each trade but you will see those +1 or +2 days. That is because the SL got hit. This is what a trailing-stop would look like if you placed a manual trade and set a trailing stop for X amount where the Trailing Stop got hit instead of your Take Profit. What has been your maximum drawdown in pips and percentage terms?
Do you have different strategies for Account 1 than Account 2?
I think someone calculated that one time I had a 42% dd. It was -219 pips. It depends on the account I suppose. The below account say Max DD was 46%.
You can view the highest and lowest DD by going to this account. It give you more data with respect to high/low trades and also how many pips a month my system gets.
Account 1 I added another system to it. It's for my clients' benefit. They should get an extra 5-9% a month.
However, today was unusual with today's identical trades on both accounts closed with 11 pips on account one and 2 pips on account two.
Occasionally, when the market moves fast, the EA doesn't have time to react and instead of dumping the trade at 2 pips, it dumped it at 11.
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Account 1 I added another system to it. It's for my clients' benefit. They should get an extra 5-9% a month.
Since you use an EA, there are no templates or other indicators used for your system?
Correct.
