What’s Your Go To Risk Management Strategy ?

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Hi everyone!

I’ve been testing several Expert Advisors lately and realized that risk management often makes a bigger difference than the actual entry logic. Curious to know what’s working for others here:

  • Do you stick to fixed lots, dynamic lot sizing, or use equity-based risk?

  • Do you apply stop-loss/take-profit hard rules, trailing SLs, or something custom in your EAs?

  • How do you handle high-impact news or weekend gaps in your automated trading?

I’d love to hear your thoughts or even see snippets of how you handle this in your code. Let's learn from each other!

Looking forward to your insights and setups 👇

 

Hello Ismaeel.

Well for me, I think one of the best practices is to build a portfolio using many different uncorrelated symbols. This is important because it enables you to spread risk. Other than focusing on one EA, one symbol that could easily disappoint you if things change. Or if you really like your symbol, I also think that it's important to use different EAs on that symbol so that if the symbol is maybe having a strong trend, one EA can maximize the opportunity and when the symbol is slow, another EA favorable for such conditions can capitalize. 

Thank you. 

 

My approach is a little bit counter mainstream, I use no stop losses, no trailing, no breakeven. I do not use any kind of news filter. There are no teacher out there suggesting to work like this, but all profitable traders I know use similar approaches (and for profitable I do not mean people with $100 on their account, but people owning millions worth funds).

There are also reasons why I choose this approach, and I choose this after tons of tests, realizing that:

  • Trailing and breakeven ALWAYS reduce the expected payoff without a significant risk reduction.
  • Avoiding news time is not always a good thing: you cannot know where a news will move the market, so generated volatility can move the price in your favor or against you. There are no certain that skipping news time will improove a strategy, surely will make the strategy to trade less, and so help a risky strategy to survive longer, but the problem in that case is not in the news filter but in the strategy itself.

The only thing I do is to shape lot size based on my balance.

Then, there will be people saying that this approach is very risky and my capital is always all on the market, they are partially right. The key is withdrawing money during time once some profits are banked, or use hard stop losses % on drawdown.


PS. Of course, as in all things into the world, there are not just a single way of doing them, it's more a fact of tastes and risk tolerance. I also have some strategies with use SL, but on that case, 99% of trades are closed due to dynamic functions based on technical conditions, and profit and time situation.

 
Fabio Cavalloni #:

My approach is a little bit counter mainstream, I use no stop losses, no trailing, no breakeven. I do not use any kind of news filter. There are no teacher out there suggesting to work like this, but all profitable traders I know use similar approaches (and for profitable I do not mean people with $100 on their account, but people owning millions worth funds).

There are also reasons why I choose this approach, and I choose this after tons of tests, realizing that:

  • Trailing and breakeven ALWAYS reduce the expected payoff without a significant risk reduction.
  • Avoiding news time is not always a good thing: you cannot know where a news will move the market, so generated volatility can move the price in your favor or against you. There are no certain that skipping news time will improove a strategy, surely will make the strategy to trade less, and so help a risky strategy to survive longer, but the problem in that case is not in the news filter but in the strategy itself.

The only thing I do is to shape lot size based on my balance.

Then, there will be people saying that this approach is very risky and my capital is always all on the market, they are partially right. The key is withdrawing money during time once some profits are banked, or use hard stop losses % on drawdown.


PS. Of course, as in all things into the world, there are not just a single way of doing them, it's more a fact of tastes and risk tolerance. I also have some strategies with use SL, but on that case, 99% of trades are closed due to dynamic functions based on technical conditions, and profit and time situation.

good point

 
Ismaeel Eid:

Hi everyone!

I’ve been testing several Expert Advisors lately and realized that risk management often makes a bigger difference than the actual entry logic. Curious to know what’s working for others here:

  • Do you stick to fixed lots, dynamic lot sizing, or use equity-based risk?

  • Do you apply stop-loss/take-profit hard rules, trailing SLs, or something custom in your EAs?

  • How do you handle high-impact news or weekend gaps in your automated trading?

I’d love to hear your thoughts or even see snippets of how you handle this in your code. Let's learn from each other!

Looking forward to your insights and setups 👇

Hello, Ismaeel Eid.
You're right about the importance of risk management, but it's equally important to continually update your market analysis to detect rapid changes.

Therefore, indicators and automated trading are used to track these rapid changes.
I wish you success.

 

Most risk management doesn't work too well in full automation. The basics work the most - trailing stop, an intelligent stop loss (if it works for the strategy), dynamic take profit as well if the strategy provides exit signals based on the trend strength. I created a function which assesses if the trade is weak or not after a specific number of bars pass - seemed like a good idea, but it's not that good. Breakeven functions also seem like a good idea, but they are not good either when they end opportunities quickly, and the trailing stop supersedes that.

 
Hi! Of course, management plays an important role. Personally, I prefer to use a fixed lot size to ensure consistent risk per trade. I limit the risk per entry to around 2% or less of total equity, with a fixed stop-loss of around 150 pips to avoid getting caught out by sudden market swings.

For stop-loss and take-profit orders , I rely on technical levels such as support/resistance or strong consolidation areas. I don't use trailing stops because I prefer to base my decisions on manual analysis of momentum and price action.

Regarding high-impact or negative news over the weekend, I tend to be more cautious. I usually avoid opening positions during major news releases or wait for volatility to subside afterward. On weekends, I prefer to close positions early to avoid unexpected encounters.

I hope this provides some useful insights. Every trader has their own strategy, so I'm open to hearing about other approaches.

[Deleted]  
Ampa Ndyamuhaki #:

Hello Ismaeel.

Well for me, I think one of the best practices is to build a portfolio using many different uncorrelated symbols. This is important because it enables you to spread risk. Other than focusing on one EA, one symbol that could easily disappoint you if things change. Or if you really like your symbol, I also think that it's important to use different EAs on that symbol so that if the symbol is maybe having a strong trend, one EA can maximize the opportunity and when the symbol is slow, another EA favorable for such conditions can capitalize. 

Thank you. 


Same for me. Multiple EAs and multiple symbols. Each with a very low risk and combined medium risk. But because it is spread out the medium risk total can have a very low drawdown...

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