Discussing the article: "Risk manager for manual trading"

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Check out the new article: Risk manager for manual trading.

In this article we will discuss in detail how to write a risk manager class for manual trading from scratch. This class can also be used as a base class for inheritance by algorithmic traders who use automated programs.

In this article we will continue to talk about risk management methodology. In the previous article Balancing risk when trading multiple instruments simultaneously, we talked about the basic concepts of risk. Now we will implement from scratch the basic Risk Manager Class for safe trading. We will also see how limiting risks in trading systems affects the effectiveness of trading strategies.

Risk Manager is my first class, which I wrote in 2019 shortly after I learned the basics of programming. At that time, I understood from my own experience that the psychological state of a trader greatly influences the effectiveness of trading, especially when it comes to the "consistency" and "impartiality" of trading decision making. Gambling, emotional transactions and inflating risks in an attempt to cover the losses as quickly as possible can drain any account, even if you use an effective trading strategy that has shown very good results in tests.

The purpose of this article is to show that risk control using a risk manager increases its effectiveness and reliability. To confirm this thesis, we will create a simple base risk manager class for manual trading from scratch and test it using a very simple fractal breakout strategy.

Author: Aleksandr Seredin

 
Wow! I'm going to try to incorporate this into my bots. A product FOR PEOPLE! Thanks for bringing the topic of risk to light!
 
Yevgeniy Koshtenko #:
Wow! I'm going to try to incorporate this into my bots. A product FOR PEOPLE! Thank you for bringing the topic of risk to light!

Thank you very much) I plan to write an article for the successor of this class for algorithmic trading in the nearest future.

 
Useful article. Thank you!
 
ZlobotTrader #:
Useful article. Thank you!

Thank you very much) Very much appreciated. Do you think to write the next one about algorithmic successor of risk manager?

 

Of course you write - it is very useful for beginners, but since your articles are oriented at beginners (subjective opinion),

then pay attention a little more to "chewing up" the code.

Good luck)

 
Алексей #:

Of course write-beginners are very useful, but since your articles are oriented to beginners( subjective opinion),

pay more attention to "chewing up" the code.

Good luck)

Accepted, thanks)

 
You have done a very good job.
The important thing is that the EA should can prevent the opening of a new deal after exceeding the defined limitations.

As you mentioned, there is no way to prevent users' manual trading. But your EA can immediately close any new trade that is opened after exceeding the limits (this will only cause a loss to the trader equal to the spread).  This leads to the trader avoiding to open further trades. Maybe this method is better than informing the user using comment.

Good luck

 
HasiTrader #:
You have done a very good job.
The important thing is that the EA should can prevent the opening of a new deal after exceeding the defined limitations.

As you mentioned, there is no way to prevent users' manual trading. But your EA can immediately close any new trade that is opened after exceeding the limits (this will only cause a loss to the trader equal to the spread).  This leads to the trader avoiding to open further trades. Maybe this method is better than informing the user using comment.

Good luck

Servus! Thanks for the feedback! I agree with you. In many situations, discipline begins to play a much greater role in trading than applied knowledge, for example, in technical analysis.

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