Building Automated Trading Strategies October 2018 | Page 30

Adding Extra Parameters
Money management should not be limited to position sizes and stops. There
are many other parameters, filters, and actions capable of reducing the risk
exposure of an automated trading strategy:
➢ Measuring the maximum drawdown (%)
➢ Inserting time parameters (i.e. trading from Tuesday to Friday)
➢ Stop trading when there are consecutive losers in a row
➢ Stop trading before and after scheduled news-releases
➢ Setting a max amount of accepted loss for a particular period
(day/week)
➢ Identifying a significant break in the equity moving average
➢ Many more parameters
Growing Small Accounts
One of the smartest tactics of money management is to trade many small
accounts for every automated strategy you want to implement, instead of
using a single large account. This will provide you with an enormous
advantage.
•
“Don’t put all your eggs in the same basket” or else “Don’t put all your
capital in the same trading account”
30 / 64
« B u i l d i n g A u t o m a t e d T r a d i n g S t r a t e g i e s »