limit DD protection

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Francisco 123321
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backtest


Backtest CP v. 2.25 ,default settings,  Lot size (fixed/per 1000=0.02), on 5M chart of all 2020 wiht IC Markets  Leverage 1:500,  4.000.-€ initial deposit. It took a few days to complete. Very good results but note 4 big decreasing DD in the chart . First one of 81,39%. The proposal is to implement a kind of security protection of maximum DD with an option to auto hedge 5 martingale current opened positions when Equity < 50%-60%.  EA would check a trend filter like  MA50 or smoothed Heiken Ashi filter of bigger TF (1H - 4 H) and when price bar crossover the trend filter close the hedged and restart nomal functionality. It is obvious that when big DD occours its becouse there is a long trend in place as seen in the chart below and somehow it could be put undercontrol using trend filter of bigger TF. It would be worhwhile despite of having worse overall results and even if it makes small losses  sometimes, as a kind of account protetion insurance. 


Image 672

Image 671

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Francisco 123321

Yes, you are right. We should not open new deals while in "Lock DD" mode. 


Let's see if we succeed in protecting the account under any market conditions with the less possible impact to the overall results of CP v2.25 default settings which are great.

Thank you. 

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3
drago babnik

How to manage a big DD? 

When DD rises to 30% there is a high probability that something is going wrong. I manually manage such a situation as follows: I hedge with a single deal that the number of lots is equal (sell = buy). I wait at least 1-2 weeks or until the monthly maximum or minimum price (the most important thing is patience). Closing all sell or all buy positions is allowed only with a large profit or. when all indicators indicate that there will be a change of direction. I close all deals that show a profit (I still have 60-70% DD available here) and wait for the next 1-2 weeks or when the loss of open deals is very small. In this way, I can achieve even better profits on a monthly basis than in normal months. The question is how to build this into EA. I think it's possible!

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0
Sai Pratap
Quote from drago babnik

How to manage a big DD? 

When DD rises to 30% there is a high probability that something is going wrong. I manually manage such a situation as follows: I hedge with a single deal that the number of lots is equal (sell = buy). I wait at least 1-2 weeks or until the monthly maximum or minimum price (the most important thing is patience). Closing all sell or all buy positions is allowed only with a large profit or. when all indicators indicate that there will be a change of direction. I close all deals that show a profit (I still have 60-70% DD available here) and wait for the next 1-2 weeks or when the loss of open deals is very small. In this way, I can achieve even better profits on a monthly basis than in normal months. The question is how to build this into EA. I think it's possible!

Guess this should be moved to new risk management idea. :)

I liked this idea, though at the cost of compromising on profits.We shud take reverse positions once certain % DD has crossed. Thanks.

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drago babnik
Quote from Sai Pratap

Guess this should be moved to new risk management idea. :)

I liked this idea, though at the cost of compromising on profits.We shud take reverse positions once certain % DD has crossed. Thanks.

Hi Sai, 

I would really appreciate if you could refine this idea a bit and move it to new risk management ideas.

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1
Francisco 123321

This  or a combination of these ideas is what I would do:

1º.-After CP# 1,CP# 2,CP# 3,CP# 4,CP# 5, are opened set by parameter which DD% to admit.

2º.-At the chart example above at pinky arrow  DD= 35%-->Hedge  CP# 1,CP# 2,CP# 3, CP# 4,CP# 5 and place a SL= 10 or 15 pips of the hedge. If price hit SL and price move up again re hedge and repeat the process.

3º.-When  smoothed heiken ashi indicator of  1H or 4 H (set in parameters) change color and one bar 1H-4H close below/above Smoothed Heiken Ashi close Hedge. 

It is preferable to keep the account losing 20 - 30 pips in the process as a type of insurance than destroy it. In the overall results of the EA could repesent a low impact.

In any case I would not open CP# 1,CP# 2,CP#...etc after positive divergences have just happened in EURUSD Diarly, and 1H.

Alternatevely it could also work  Loss recovery strategies . But for that you should add funds to your balance to  average and lower DD.

https://www.mql5.com/es/market/product/16061?source=External%3Ahttps%3A%2F%2Fwww.google.com%2F#description

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0
Sai Pratap
Quote from Francisco 123321

This  or a combination of these ideas is what I would do:

1º.-After CP# 1,CP# 2,CP# 3,CP# 4,CP# 5, are opened set by parameter which DD% to admit.

2º.-At the chart example above at pinky arrow  DD= 35%-->Hedge  CP# 1,CP# 2,CP# 3, CP# 4,CP# 5 and place a SL= 10 or 15 pips of the hedge. If price hit SL and price move up again re hedge and repeat the process.

3º.-When  smoothed heiken ashi indicator of  1H or 4 H (set in parameters) change color and one bar 1H-4H close below/above Smoothed Heiken Ashi close Hedge. 

It is preferable to keep the account losing 20 - 30 pips in the process as a type of insurance than destroy it. In the overall results of the EA could repesent a low impact.

In any case I would not open CP# 1,CP# 2,CP#...etc after positive divergences have just happened in EURUSD Diarly, and 1H.

Alternatevely it could also work  Loss recovery strategies . But for that you should add funds to your balance to  average and lower DD.

https://www.mql5.com/es/market/product/16061?source=External%3Ahttps%3A%2F%2Fwww.google.com%2F#description

Thanks Fransisco. It makes sense to me. :)

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1
gamal rizaldi
Quote from Francisco 123321

This  or a combination of these ideas is what I would do:

1º.-After CP# 1,CP# 2,CP# 3,CP# 4,CP# 5, are opened set by parameter which DD% to admit.

2º.-At the chart example above at pinky arrow  DD= 35%-->Hedge  CP# 1,CP# 2,CP# 3, CP# 4,CP# 5 and place a SL= 10 or 15 pips of the hedge. If price hit SL and price move up again re hedge and repeat the process.

3º.-When  smoothed heiken ashi indicator of  1H or 4 H (set in parameters) change color and one bar 1H-4H close below/above Smoothed Heiken Ashi close Hedge. 

It is preferable to keep the account losing 20 - 30 pips in the process as a type of insurance than destroy it. In the overall results of the EA could repesent a low impact.

In any case I would not open CP# 1,CP# 2,CP#...etc after positive divergences have just happened in EURUSD Diarly, and 1H.

Alternatevely it could also work  Loss recovery strategies . But for that you should add funds to your balance to  average and lower DD.

https://www.mql5.com/es/market/product/16061?source=External%3Ahttps%3A%2F%2Fwww.google.com%2F#description

My opinion, maybe its best when the cp open new sell transaction 5 its automatically open new buy transaction 1 with a lot total of sell transaction 1 to 5 with a stop loss on sell transaction 1. So the safety is more clearer.. 

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drago babnik
Quote from gamal rizaldi

My opinion, maybe its best when the cp open new sell transaction 5 its automatically open new buy transaction 1 with a lot total of sell transaction 1 to 5 with a stop loss on sell transaction 1. So the safety is more clearer.. 

This is also my opinion too. The most important thing is that EA starts dealing with all open positions at the second level (mode 2). Larger TF e.g. H4 or D1, completely different principles (indicators) for TP and SL, etc.

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0
Sai Pratap
Quote from drago babnik

Hi Sai, 

I would really appreciate if you could refine this idea a bit and move it to new risk management ideas.

Only Andrey sir can move to new idea section. Let us wait for his action :)

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Francisco 123321

Hello. I was wondering if at the end this limit DD is in the queue to be implemented or has been abolished