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Old 21-07-2011, 12:43
Johnnykanoo's Avatar
Johnnykanoo Johnnykanoo is offline
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Join Date: Jul 2011
Location: Manchester, CT
Posts: 186
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Well I just wanted to give a quick update. I have added 8 "alternate" pairs for wally to trade. So far so good :D I am liking what I am seeing. I was risking 1% per trade but I have decided to risk 2%

In terms of WSFR risk is a little tricky. We are taught to risk max 2% of our account on any one trade and that is sound advice. Of course there are some who will risk 5% and some who would never risk more than 1% This is the standard accepted range between 1% and 5%

With Wally its a little different. Technically I am risking a certain percent but Wally almost never closes for a full stop. In fact the average loss is about 13 pips

right now my account is at $817.50 so if the average loss is 13 pips and you are risking 2% than the pip value would be $16.35 However there is potential for greater loss.

By risking only 2% of my account my lot size is only about .13c a pip With these numbers than my average loss would be about $1.69 or about .2% If I win it would be slightly smaller maybe .175% For me that is not meaningful enough so I look at these numbers and I make decisions based on my comfort level.

Remember ea's don't trade like humans do so there risk should be looked at differently too.

If I risk 10% with Wally I am looking at about .68c per pip and an average loss would result in around -$8.85 or around 1% This is average. Larger losses can and do happen. If I hit a full stop loss it will cost me 10% of my account!

Here is some more things to factor when deciding risk for this ea. History. For starters how much data are you basing your numbers on? To be honest my sample of numbers is still very small. Several months of numbers would be better.

What time of year are we trading in? Its the dog days of summer and the markets may be thinner than usual. Other times factor in. Holidays are slow and unpredictable.

Finally I would also warn that my "style" of money management for Wally does not provide for a black swan. If something terrible happens and the markets crash I will certainly lose money.

Here is a breakdown of my risk profile so far..

GBP/USD 10%
EUR/USD 15%
USD/JPY 5%
USD/CHF 5%
USD/CAD 2%
EUR/AUD 2%
EUR/CHF 2%
AUD/USD 2%
EUR/JPY 2%
AUD/JPY 2%
AUD/CAD 2%
EUR/CAD 2%

All the 2%er's are being tested for long term vialbility.
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