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Risk Analysis and Custom Indicator for Tdurai84's Winning Strategy
bscholes Posted 20 Jan. in #Optimization #Cci #Ema #Indicator #Risk #Money Management #Rsi #Expert Advisor #Jforex Startegy47/65
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This article refers to tdurai84's article:Review of Winning Strategy in Dukascopy Strategy ContestWhenever I download the strategy of a contest winner, I ask myself: Would this strategy work in the long run, and which amount of risk/leverage would be optimal?The answer to this question is what this article is about.So I plugged the strategy into the tester, using 1min bars with cubic spline interpolation on EURUSD beginning 2009. Those settings would give me enough speed for the backtest but also enough precision to be confident with the results, since the strategy uses 10min bars only and no ticks:So the strategy made 1.4 million out of 100k in three years. Not bad.Note though what would have happened if we started three months ago:We had a nice equity peak of about $160000 but after that the account pretty much crashed and burned.So the question would be: Which risk settings would yield acceptable results without killing my account, considering there may be times that the strategy does not work well?Before we can answer let me clarify two common misconceptions about money management:Variable lot sizes are safer / yield better results than fixed lot sizesMore risk yields better …
