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How do you know if one version is better than the other one?
You can see the quality indicator for the historical data at the end of the back test. Just click on the back test tab in MetaTrader and look at the history quality score. Sometimes you need to go with a very small trading risk. But from time to time trading a lot of positions at the same time will work.
A small change like a floatingtype variable for risk settings can make such a big impact for the results. There is no one size fits all solution. I found out the right risk setting for me by increasing it. Making people believe that the right entry signal is the key to fame and fortune is a very strong force that will make the financial industry rich for many more years. And rookie traders will gladly give away all their money for this false belief.
It is like in real life. You wouldn’t expect all traffic lights to be green before you start your car, would you?
Some people try to go all in and after the takeoff they want to turn around. This is the best way to make sure that you will never reach the other side of the gap. Do you have any profitable trading systems yourself? I have. And do you also have trading systems that are not profitable?
I have those too. Making selfmade insights is very helpful to get a good understanding about what works and what doesn’t work. Being a broker is a simple business because the owners know the probability for their profit is based on two fundamental laws. If a potential loss is too big, this will probably cost you good night’s sleep.
One of the biggest problems is the sizing. What is the right size for a position or for your trading account? As a discretionary trader, I learned that the price seemed to know what I did and it did the opposite of what I had expected. Little decisions can have a big impact and I really like the fact that it is possible to see all the different results with an automated trading system.
Trading heuristics is like selling Christmas trees in January, because the sales in December have been so good.
I often intentionally turn off my systems for a few days. And it also happens regularly that they fail by themselves because, for example, the operating system thinks that now updates must be installed and the computer must be restarted.
I prefer the equity based stop because of the results it produces for my systems. You need to keep the course of your ship even when you find yourself in a storm with higher waves, also known as volatility in trading. With automated trading you can always prove an idea and disprove it by doing the exact opposite. We have seen the Swiss bank giving up the bonding for the Swiss franc that caused several bankruptcies in 2015.
If you put a $20 bill on a plank on the ground and tell somebody to walk on the plank to get the money, he will most likely do that without any hesitation. If you do the same thing and put the plank between two skyscrapers, it is very unlikely that he will do that for a $20 bill. You could create a fixed stop, a trailing stop, a stop loss that is based on an indicator, and so on.
Most traders probably would have no problem to lose $0.17. Everybody has his or her own idea about how much is too much.