September 8, 2020 at 18:56 #59490fracleheMember
After one month running the August EAs, I’ve come across an interesting chart given by FXBlue, the MAE/MFE one. In this, we can see that profitable trades never have a negative excursion greater than 60 pips. However, losing trades may have negative excursions much higher than 60 pips (given by the SL).
If we did a cutoff for those losing trades setting the SL to 60 pips in all trades, we would not have losing trades greater than -60 pips, while profitable trades would not be affected.
Since the EAs sometimes have SL greater than 60 pips, do you think it would be a good idea to set the SL to this level to minimize loses (only in the Top 3 account)? I know EA Studio already releases the optimal settings, including TP and SL, but I think it could make EAs even more profitable as a whole!
Suggestions are wellcome!!
September 9, 2020 at 8:44 #59494richardParticipant
Looks interesting. I wonder how often fxblue is taking a snapshot of the price or is it live. Just to ensure it is not missing anything……
September 9, 2020 at 9:15 #59495Ilan VardyModerator
This is interesting, however the image doesn’t necessarily show the whole picture. In some or many of the trades, the trade may have moved into SL territory beyond the 60 pips, before turning and eventually closing at a TP up to the 60 pips. If you were to set SL at 60 pips, some of the trades that finished in profit, may have closed before they got the chance to correct. Remember, the EAs are based on historical data, and are executed according to current market conditions, which can change very quickly, especially in major news events. But as mentioned, it is an interesting observation, and probably worth exploring on a demo account. Maybe run 2 demo accounts – one with the EAs as they are and one where you set the SL for all of the EAs at 60 pips, and compare the results.
Let us know.
September 9, 2020 at 11:05 #59502fracleheMember
@richard, I have the FXBlue app (an EA added to any chart) which posts stats every 5 min 🙂
@ilan thanks for your reply. You say “In some or many of the trades, the trade may have moved into SL territory beyond the 60 pips”. However the definition of MAE itself is “Max adverse excursion”, that is, if a profitable trade (blue dots) had a excursion into SL territory, it would be shown in the chart above, ending up with a profit. But data doesn’t show that… Perhaps I have little data to compare with (just one month), but even if there are some cases beyond -60 pips it might be worthwhile, the losing trades going beyond -60 pips are many more!
You’re right, EA Studio already sets the SL to optimize gains, but perhaps it’s only a matter of optimization for a low % of cases that affects the whole model. Anyway, I’ll give it a try and let you know whether it works!! 😉
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