What is the best strategy if account is going maximum drawdown

New comment
 
If account is going maximum drawdown then what is the best idea to short out this panic situation as well as what is next step to do for continue in market. 
 

If you apply proper money management, you will never reach such a panic/crisis situation in the first place ...

Excerpt from another post ...

Adjust your position size based on a small percentage of your capital and the maximum drawdown you are willing to accept. For example, if you normally risk 1% per trade, and only accept a maximum of 10% drawdown, then your true risk per trade should be 1% of (10% of your balance), and not merely just 1% of the entire balance. In this way, during a drawdown, as the balance drops, so does the risk, to the point that it becomes 0% at the maximum drawdown allowed. Keep track of your maximum balance, so that you can calculate your current drawdown and adjust the risk accordingly with this method.

There are other methods of money management that take into account the drawdown. The one above is just one that I often use, but there are others. Do some research on various money management methods to find one that best fits your needs and trading style. Here is a starting point ... Money Management Models
Preventing unreasonable losses in an EA - Making a successful autonomous expert advisor is like playing a tedious chess game against the market
Preventing unreasonable losses in an EA - Making a successful autonomous expert advisor is like playing a tedious chess game against the market
  • 2025.10.04
  • www.mql5.com
M the only one who came to think that making a successful autonomous expert advisor is like playing a tedious chess game against the market. It is a swing based strategy that i m trying to make autonomous with automation, but clearly it seems that reality does not bend to strategies
 
Your topic has been moved to the section: Trading Systems
Please consider which section is most appropriate — https://www.mql5.com/en/forum/172166/page6#comment_49114893
 
Pawan Kumar Sharma:
If account is going maximum drawdown then what is the best idea to short out this panic situation as well as what is next step to do for continue in market. 

It depends on the kind of strategy that you're using. If you're scalping, eliminate sloppy entries by going contrarian. Put your buy entry a tick or so below the last major swing low and then wait for the sellers to chicken out. A simple stop would be something like 2 and 1/2 x  ATR below your entry. Inverse for sell trades.

If you're swing trading, make sure that your exit conditions are faster than your entry conditions. For example for buy trades, use price above fast and slow moving averages (two) for entry, and price below the fast moving average for exit. Inverse for sell trades.

My point is that if your strategy is risking max drawdown (margin call?), then it's time to develop new trading logic. The next step after that is using Fernando Carreiro's money management info to refine it.

 
If you go into gambling mode and avoid risk management, then really the only thing you can do is wait it out. This is the hardship all gamblers face. You can't do anything about it. Trading with risk management is what is accepted as real trading, anything else is gambling
New comment