HOW TO MANAGE YOUR ALGOS

🎓 This is for educational purposes and to illustrate a point of crucial importance to perform in algo-trading

📍 LET THE ALGOS RUN FOR AT LEAST A MONTH 

📍 Only monitor the LONG RUN KEY METRICS OF THE SIGNAL (Drawdown and average monthly returns) to decide about it

◽ gets immediately 2 negative trades -$34 (-3% DD) get scared; stops the EA; (starts complaining about the performance after 2 trades …)

◽ IMPORTANT: would had he launched it on the 15th of July, he would have been immediately positive by +$26 and would probably would not have cut it … then

◽ but he did cut it, so he did not benefit from the coming positive trades

◼️ relaunches the EA (probably on a demo account) and enter a streak of Losses (-1% Drawdown…) 

(see picture with green outlining of his reported trades on the right. The Signal’s trades are on the left outlined in blue)

◽ because he stopped the EA, he did not benefit from the last streak of Wins that would have given him a + 8,6% (see picture with blue outlining below the green ones)

◽ gets even more frustrated and unfoundedly delusional about the EA

This is exactly what NOT TO DO.

👉 hadn’t he stopped the EA he would be positive by now

👉 had he launch it on the 17th, he would be positive by +7,6% (date of launch has an impact in the first months of course)

———————–

1. Do NOT ALGO-TRADE WITH YOUR EMOTIONS or you will reproduce exactly the same mistakes than in manual trading and be sure not to be profitable.

2. Only monitor the LONG RUN KEY METRICS OF THE SIGNAL (Drawdown and average monthly returns) to decide about it

3. If you want to minimize the emotional impact of a launch, LAUNCH AFTER A STREAK OF LOSSES of the Signal so that you maximize the probabilities to starting with WINS.

Hope this helps, staying at your disposal