Hi Petko,

My EA portfolio made up of several assets was doing relatively well this month. I had large profit in the first week of May, followed by some losses and then steady movement, up and down, but overall profitable.

With the massive moves in the market today, specifically with the USD pairs, my portfolio suffered huge losses, and all the gains from the month are lost.

I change my EAs weekly, based on their performance in my demo accounts.

Is there a way to protect my positions from such massive market moves? When creating EAs, should I change my Stop Losses to a smaller amount?

 

Thanks as always,

 

Ilan

Hey Ilan,

It always happens that there will be unexpected moves. And as it happens all the time, it means we have such moments in the Historical data that we use while generating the strategies. So the EAs are expected to go well over such days on average(one time could be bad, next will be good).

Anyway, what is the range of SL and TP that you use, and do you perform robustness tests as Monte Carlo?

Hi Petko,

 

Thanks for getting back to me. What you say makes perfect sense – I guess this is where money management is important, as well as making sure there is enough money in the trading account to ensure there are no margin calls while the market recovers – which it has since I posted my initial question. I have since updated the EAs and my account has recovered.

 

The SL and TP I an using for my EAs is 10 – 100.

 

Thanks again,

 

Ilan

Hey Ilan,

Yes, you are right. Glad to hear that the account recovers.

Anyway, there is a saying in trading that “History repeats itself” I never saw that in a 100% happening, but there are times when similar moves happen.

When using the EA Studio or FSB Pro we have the chance to generate EAs that take the average best parameters for the indicators and SL and TP.

So there is no guarantee that the values we use will work in the future, but at least we know which values worked the best for many cases – exactly the Count of Trades. These are the events that repeat with the EAs, and this is what we need to focus on.

So the more count of trades the strategy has, the bigger chance this event will work for the future as well.

I hope that makes it a bit clearer.

Cheers,