Running a grid EA on purpose: where do you put the hard stop?
Hi everyone,
i run a grid style EA on purpose on some of my accounts, with a stop loss on every position. In September it still went deep into floating loss within about ten days. The balance looked fine the whole time, only the equity showed it. Looking back, my accounts were simply too small for a move like that.
So now I'm rethinking when to step in. Do you close everything at a fixed equity drawdown, or do you rather limit how many levels the EA can open? And is that rule inside the EA or do you do it by hand?
Curious how you handle it.
Best regards,
Chris
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Christian Kotschote:
i run a grid style EA on purpose on some of my accounts, with a stop loss on every position. In September it still went deep into floating loss within about ten days. The balance looked fine the whole time, only the equity showed it. Looking back, my accounts were simply too small for a move like that
i run a grid style EA on purpose on some of my accounts, with a stop loss on every position. In September it still went deep into floating loss within about ten days. The balance looked fine the whole time, only the equity showed it. Looking back, my accounts were simply too small for a move like that
That is the quintessential pitfall of every blind Martingale "strategy." I see 2 options for you:
- Actually create a underlying strategy/filter that identifies optimal entry opportunities based on statistical analysis, and/or...
- Invert the entire Martingale operation to stack profitable trades instead of losing trades. In this way, you start with the largest position size and scale it down as the trade runs. Just know that using this option alone, you'll still need substantial trading capital because it will still be blind─likely incurring 30% drawdown when price inevitably goes sideways for an extended period of time.
