Let’s trade the Stochastics oscillator for the year 2011 in this automated video. We are using a risk setting of 8.
I really prefer the equity and the balance to go up as straight as possible and I think that is the same for you.
But from time to time it pays to accept a draw down for a better result.
In our case we use a risk of 8 and we could decrease the draw downs if we would use a lower risk.
A low risk will give us more security for the trading capital.
But it would also decrease our possibility for higher profits, because fewer positions are traded.
So you need to find your own comfort zone to adjust the risk setting.
For me it is okay, if the draw downs don’t go significantly below the initial deposit.
For example I would have problems if my system would have 50 percent or more, but I wouldn’t manipulate it.
I would just decrease the risk setting.
Depending on your broker and your finances, you might find that a higher or a lower risk is better for your needs.
If you want to find out more about the right risk settings, maybe you want to watch the other performance videos on RobotTradingSystem.com – or wherever you get your trading performance videos…