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Your broker can shut down your whole account whenever he wants. I bet a lot of people didn’t know that.
The right risk setting depends on several factors. If you change the risk, you might see a completely different result.
Before I used automated trading systems, I often missed market moves because I wasn’t in front of my computer.
How do traders become traders? They just open an account and start to trade. They start to trade real money right away.
And with automated trading, you don’t need to rely on hope. I would say that you have much better options. For example, you can measure results, change one thing and measure the new results again. If your results are better, you might have found an improvement. It is a bad idea to try an airplane to take off with just 50 mph because that would be too slow.
It is also a bad idea to try to run with 50 mph because this is too fast.
The reverse test is to do the opposite of what you think is working to prove that it really produces a measurable advantage or disadvantage.
I think fear is one of the most common reasons why people lose money. Everybody can stick to a strategy when everything works well.
In the past I had a broker that declared insolvency, but before that happened, the broker raised the margin requirements in a way that caused lots of painful losses for thousands of traders. I prefer the equity curve to be as straight as the balance curve, but that doesn’t always work. From time to time, I read about people who talk about trading systems that really work, and most of the time those people only have 50 or 100 trades to back up their opinion.
If you want to improve your system, then you need to do things in a particular order. Do you have any trading skills? If not, you should probably start to learn the basics about trading. Market conditions might change, and what worked for the last trading year might not work for the current trading year. Some people set a break even stop that is protecting the position from becoming a loss after it is in the profit zone.
I know that I can stand drawdowns as long as I never use an unreasonable risk setting for my systems. A strategy test will run for a minute or so, and afterwards I have a result. Easy to do, easy not to do. Once I had a result, I changed one thing and tried to improve that lousy result. If I could do that for one currency pair, I would try to also do it for other currency pairs and other trading years.
I have done algorithmic trading for over half a decade, and still I don’t like to see a draw down. Once you have made it to a certain level with this automation thing, you’ve can easily prove or disprove every trading idea you ever might have.