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Hi everyone,
I’m still generating strategies but was wondering how I can manage risk in my live trade account when I finally start trading.
How many experts and lot sizes do we all trade?
I plan to trade 6 currency pairs, on 2 time frames with a starting balance of 2500GBP. Max leverage is 1:30.
I know that lot size depends on both the account risk and trade risk. But I’m not sure how the lots sizes of individual EAs will add up. Especially if I have 10 strategies trading on each time frame for each currency pair.
I’m careful not to risk too much at the same time.
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@Ossaio-Hi there! I think I saw a post from Petko on the forum with a suggestion on lot size for trading with a bunch of EAs. Numbers are based on a 1000USD account (Forex only):
Number of EAs: 1-10
Trading Lot size: 0.1
Number of EAs: 10+
Trading lot size: 0.01
Now because I trade more than just forex, my lot size changes depending on the asset. Here is what I have in my live account, when I started at 1000USD 1:100 account leverage:
Forex EAs: 0.1 lot size
Cryptocurrency EAs: 1 standard lot size (Bitcoing and Ethereum) 10 lots for Ripple
Commodities EAs: 0.01 lot size
I’m going to keep my lot sizes like this until I see a need to change. Also, I’m a US trader and we have to abide by FIFO rules. I trade 2 EAs for ever asset on 2 timeframes. Each EA has to have a different lot size in order for me to stay in compliance with FIFO. So for Forex, one EA is trading at 0.1 and the other is trading at 0.11.
Hope this helps.
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Thanks for the detailed answer Jacpin.
Using the example you gave, assuming you trade EURUSD and USDCAD on 2 time frames with the 2 EAs.
Let’s assume all EAs open a trade on each time frame at the same time for both pairs. Does it mean you have 0.1+0.11 lots opened for EURUSD and 0.1+0.11 lots opened for USDCAD. This will give a total of 0.42 lots opened for all Forex EAs at that particular time.
Am I correct with my reasoning? Thanks.
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@Ossaio-Yes, that’s correct. Another example is this: I am trading EURUSD and USDCAD on both the M15 and H1 charts. I have 2 EAs for each chart for a total possible amount of 8 trades happening at the same time. Here is how my lot size is setup:
EURUSD-M15-0.1
EURUSD-M15-0.11
EURUSD-H1-0.12
EURUSD-H1-0.13I would then repeat this same setup for USDCAD. I tend to have the best performing EA with the highest lot size.
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Thank you Jacpin. You’ve cleared this up for me. From what I understood, if I have a leverage of 1:30 with a £2500 balance, it means that the maximum lot size I can trade at any given time is 0.75 lots. So, I need distribute this (0.75) among all my EAs, time frames and currency pairs.
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Hello Ossaio,
the examples of Jacpin are great and clear, but one more time this is because she is from US. If you are not from US, you can keep it same lots as 0.1 or 0.01 which will make it easier for you.
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Good point. Thanks Petko.
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And regarding the money management, it is important to keep strict rules, so this way you will avoid emotions as trading with higher lots after successful period.
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I agree. I’ll start with conservative lot size and increase it only after I’ve had much experience.
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Hey Ossaio,
if you are really fully beginner, I would suggest you to start with Demo account. But the best way to practice trading is on live account with 0.01 lot.
But take your time, and do not hurry. Practice, and you will feel when you are ready to trade real money. With everyone is different, it could take you a month, it could take you a year. Depends on many things – how much time you spend on it, how strict you are with your rules, and most of all how much you really want to do it :)
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Hi Petko,
You are absolutely correct. I’m really taking my time. I want to make sure I get it right as much as posible. I have purchased a VPS where I’m collecting data on both MT4 and MT5 live accounts for about 1 month now. I noticed that MT5 accounts have more historical data than MT4 accounts. So, I now have more than enough broker MT5 data for strategy generation.
I’m using two approaches for strategy generation. 1) Allow FSB to automatically generate strategies. 2) Supply FSB with some fixed manual trading opening logic and then allow it to suggest exit conditions.
I’m looking at currency correlation also. I want to make sure the currency pairs I trade are either non-correlated or negatively correlated. I’m also looking at pairs which trend most of the time.
With my data analysis background, I’m trying to segment the historical data into different combinations of market conditions to see if the results will be improved. I currently spend 8 to 10 hours per day on this, outside my full time job hours.
I also have a 32GB RAM workstation which will be generating strategies while I’m at work. I’m committed to making this work and hope it does. I really appreciate your great efforts and also the help of all the members of this forum who have been selflessly sharing their experiences.
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Hello Ossaio,
Glad to hear you are so dedicated to the algorithmic trading. I am sure you will find your exact style and path in algorithmic trading.
Normally the Historical data on the broker is from the broker itself not from being on MT4 or MT5. Keep in mind as well that most of the brokers do not allow hedging with MT5. That is why I normally teach and demonstrate MT4.
It is great you have a powerful workstation. You will be able to generate strategies quickly which will make the whole process fast with you.
And take it easy with the hours you spend :) It took me years to find the maximum I can stand in front of the monitors. Normally if you do it as much as possible, you will exhaust yourself, and after a few days, you would be able to work effectively.
So just spend a lot of time, but find enough time to rest. It is quite important.
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Thanks for the kind words Petko. Fortunately, Pepperstone allows hedging on MT5. I agree I need to take more rest. From few strategies I generated so far, I can see this is more of a marathon rather than sprint. So, I’ll go easy, keep learning and gradually work towards becoming a better trader.
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Good to hear that, Ossaio! Wish you safe trading! Do not hesitate to drop any more questions.
Cheers,
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Hi Petko,
How do you modify the lot sizes of the EAs after strategy generation? Let’s assume you generated a strategy using 0.02 entry lot, 0.04 max lot, add 0.01 lot and reverse 0.04 lot. If the EAs are doing well in demo or live trading, what do you do? Increase the lot size in MT4 or FSB?
I’m asking this because I generated some strategies with good equity lines using a particular set of lot sizes. Then I started experimenting with different lot sizes after generation to see if the net balance will increase with increasing lot size. However, I was surprised to discover that increasing the entry, max, add and reverse lot sizes made the strategy become unprofitable.
Have you experienced something like this?
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Okay, I see what the problem is. I was initially using 1:1 leverage like I have in my demo account. However, when I changed it to 1:30, the strategies became stable.
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Hey Ossaio,
Yes, the idea in Forex trading is to trade with leverage. Of course, it should be smart, and you need good money management.
When you trade 1:1, it is more for investment and to hold your savings in another currency. But if the swap is high this might cause you losses.
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Ossaio, where did you find a broker with leverage 1:1? I never saw such a thing with the brokers?
How much is the spread and the swap in this cases?
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Hi Maria, the 1:1 leverage is only in the demo account.
Live trading accounts have a maximum 1:30 leverage due to limits placed on European brokers.
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Hey Ossaio,
Yes, the recent limits affected very negatively the brokers. Most of them fired most of their employees.
You can make a conclusion of how much the people are losing before with the high leverage. This is how brokers benefit a lot.
However, this is not about anyone in this forum. Everyone who is here knows clearly that education is needed before trading.
The brokers benefit from the people who jump in real trading without any idea.
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You are right, Petko! I jumped into trading without an idea. Zeroed small account for less than a month. :)
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Unfortunately, most of the traders that come to Forex Academy lost some money. This is how everyone realizes that education is needed.
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Hello everyone,
I started adding some cross pairs to my portfolio. Anyway with some ideas?
At the moment I am on AUDUSD, GBPJPY, and EURNZD.
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Hello Haliffa,
it is interesting to trade cross pairs because you will avoid the effect of the Red Hot News that normally affects the major currencies.
If you really want to stay away from the “big shark” currencies that are affected by the huge daily bank transactions, you should stick with currencies as AUDNZD and CADJPY.
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I am working now on my portfolio with the cross pairs. I want to compare in live account with the results from the major currencies.
i want at the end to make a nice mix of major and cross pairs. But first I want to see which one will show better results.
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Hey Desita,
good point here to compare the results between cross pairs and major pairs. Let us know how it goes.
But again, focus on the profitable strategies with nice backtest output. Do not make compromises with any strategy just because you want to trade that currency.
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I always get better results when generating strategies for the major pairs. I try to generate strategies for the cross pairs, but I do not see what I want to see…
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Hi Andi,
By major pairs, are you referring to EURUSD, USDJPY, GBPUSD and USDCHF? Are you trading only these 4 pairs?
I’m still on demo account and I started with minor/cross pairs like EURJPY, EURGBP, GBPCHF and EURAUD. I plan to start looking at few major pairs soon. It will be nice to know which currency pairs have delivered most profit to experienced members of the forum. Thanks.
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I avoid trading the USDCHF after it was released from the euro
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Desita, I avoid it too, but I consider adding it soon to my portfolio because there is already enough Data from that time.
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I saw in previous posts that many of you trade with 0.01 and just adding the good EAs. That is what I need!!
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Hello Violet, that is a great method by the way that keeps you away from high risk and at the same time, you are actually trading on live.
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Hello all,
did someone try trading with over 100 EAs in the account using the Portfolio EAs? I wonder if I put 10 Portfolio EAs with 50 EAs each will I be able to follow the results. Also, will there be any delay in the execution because this would be 500 strategies trading in one account?
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Hey Van,
give it a try :) See how it goes. Experimenting is how you get to success
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