Market theory - page 81
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Yusuf, I don't believe it. Your trades - I repeat - have been hovering for a long time, and you can tell by the smoothness of the chart. I would not be surprised if some trades have been hanging around for six months or more. You show the drawdown on closed positions. The question remains - how many points of drawdown may accumulate in the worst case with open orders?
I was making a similar chart using a strategy similar to yours and I got also about 100-200 points of drawdown and 95% of profitable trades. But when I calculated the drawdown on open trades in the same excel, the rose-coloured glasses flew off instantly, as the FS became small.
What kind of drawdown do you think is acceptable?
What do you think of the drawdown in this question?
In % of the initial deposit.
If initial deposit is 1000$, balance is 10000 and drawdown is 2000 - what is the drawdown?
If we estimate the drawdown as a percentage of the initial deposit, we get 200%. It makes sense to estimate the drawdown as a percentage of the initial deposit, because such a drawdown can happen immediately after launching the Expert Advisor, when it has not yet earned anything. This is on condition of trading with a fixed lot.
Yusuf, I don't believe it. Your trades - I repeat - have been hovering for a long time, and you can tell by the smoothness of the chart. I would not be surprised if some trades have been hanging around for six months or more. You show the drawdown on closed positions. The question remains - how many points of drawdown may accumulate in the worst case with open orders?
I was making a similar chart using a strategy similar to yours and I got also about 100-200 points of drawdown and 95% of profitable trades. But when I calculated the drawdown on open trades in the same excel, the rose-coloured glasses flew off instantly, as the FS became small.
See how the algorithm frantically searches for the trend https://www.mql5.com/ru/forum/58256/page82#comment_1653512. In order to assess the frequency of changes of trading direction I have placed there a graph "Buy-Sell". At such frequent changes of trading direction, in principle, large drawdowns are excluded, because we cut losses immediately when changing the trading direction, not touching profitable positions. We have long trends but they come in handy as drawdowns are excluded. Equity is always higher than the balance at these points. If the algorithm loses equity, it actually loses its own earned money, not the equity of the deposit. Do you understand the difference? Therefore, those 2000 points I have cited are relative drawdowns. The drawdown of 500 points is caused by the algorithm at the stage of acceleration. You don't believe because you haven't encountered such self-regulating, self-regulating automatic systems until now. The algorithm simply fits into the controlling mechanism of the market and saves and builds up profits on its own, getting rid of substantial losses in time and taking losses. I think I explained it somehow. If I do not understand, I will explain more.
This raises the question: why do we need a system at all? After all, you can "out of the blue" and open in any direction and self-regulate - when you make a loss, you close, when you make a profit, you let it grow.
This is the system! You have not noticeably described how the system works. It will become a full-fledged ATS, if you refrain from "out of the box", and introduce a reasonable logic.