drawdown when testing an expert advisor

nduru22
128

Hello everyone,

Id like to know, how do you reduce the drawdown that an expert advisor has? Iv been trying many things such as reducing the lot size that my expert uses, or adding code that i think will mitigate the potential losses that the advisor may make when trading, but i think that these codes just add on to the overall drawdown sometimes.

So does anyone have any ideas on how to reduce drawdown?

Thank you in advance

Jozef Bartek
247
Jozef Bartek  

You have 5 options:

  1. add more filters to reduce number of losers
  2. cut losers earlier
  3. increase number of winners
  4. let the winners run
  5. rework your EA
Unfortunately, there's rarely a change you make in the EA logic which would only cut losers without affecting winners too. In my experience, if I find myself tweaking EA logic too much and any change I tried helped only a little, it starts to look I'm curve-fitting so then I tend to go back to the general EA idea and try to look at how that idea could be implemented differently.

BTW Have you tested your EA on different pair or timeframe. Results on different pairs/timeframes may give you more clues what could be improved.

Jozef Bartek
247
Jozef Bartek  
One more idea, if your EA uses only one timeframe, it could help to add another timeframe. You can use current timeframe for entries and a higher timeframe to check for example if there's a bigger trend and filter entries accordingly.
nduru22
128
nduru22  

thank you,

i have coded my e.a with only one pair in mind, thats pound/usd. After observing the way the pair moves i developed a strategy to trade on it and then just recently coded it into an expert advisor so its only configured to that pair and on 1 hour timeframe

i think i need to rework my advisor.

Simon Gniadkowski
17410
fxjozef:

You have 5 options:

  1. add more filters to reduce number of losers
  2. cut losers earlier
  3. increase number of winners
  4. let the winners run
  5. rework your EA
I agree with number 5,  and it encompasses numbers 1 to 4.  
Jozef Bartek
247
Jozef Bartek  
RaptorUK:
I agree with number 5,  and it encompasses numbers 1 to 4.  


True. Although how I meant it was 1-4 being sort of incremental changes to existing EA and number 5 meaning "start from scratch and try to look at your EA idea from different perspective".  For example if I have an EA which trades from support to resistance and gives large DDs and I run out of tweaking ideas (MM, filters, etc.) to achieve any of 1.-4., then I would take a step back to actually re-think the core strategy for identifying S/R.