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How to make money with no high frequency trading
Good tips for your expert advisors
Some tips according to our trading approach.
First of all I would like to say that we take inspiration from Larry Williams who we believe to be one of the few trader explaining real statistically valid strategies.
Here the list of things to consider for an expert advisor:
- Define the maximum risk allowed for each trade. If you think that it's hard for you to loose more than the 1% of your entire capital for each trade well, set up a strategy where the stop loss does not exceede that amount.
- While optimizing the strategy, your backtest could tell you to set the stop loss to an amount you do not like... The best way to solve this problem is to use this increased stop loss, but reduce the leverage for that trade. This way you risk always the same and your trading strategy is optimized.
- Define the maximum drawdown for your trading system. Thinking of a portfolio of expert advisors, it is possible to define a global drawdown or a singular drawdown for each strategy. Once the strategy run over the drawdown, the expert stops itself until the drawdown comes back into the boundaries decided before. For example: I allow a maximum drawdown of 20% for a singular expert advisor. Once it goes beyond 20% I stop it until the hypotetical deawdown for the uninitialized expert comes back under the 20%.
- Make a lot of money management. We use variable contracts according to the performance of our strategies and the quantity of equity and/or the eurusd exchange rate (we trade in euros). If our capital raises we buy more contracts, if it decreases we buy less contracts. If eurusd raise we buy more contracts otherwise less ones.
- We use to backtest our strategies with a wider spread than the one really applied by the broker and consider always a margin of error (the slippage). We hardly trade overnight positions, but we do not do scalping or high frequency trading, because we think that the price has to run to make profits. Especially with an automated EA.
December 16, 2015
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Categories: Blog, General Articles
| Tags: earn money, make money, make money with trading, no high frequency trading
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By: Cesare Gonzi
About the Author
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