how do you control or minimise drawdown

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hi 

i find it very difficult to set stop loss, because it is either hit too often or gives me a big loss.

so i want to know how people do on this.

i just want to have some ideas, discussions, inspiration. i know there is no prefect sure win system.

many thanks
 
luckyvictor: i find it very difficult to set stop loss, because it is either hit too often or gives me a big loss.
A SL can not give you a "big loss." Only your risk can. Control your risk. Risk depends on your initial stop loss, lot size, and the value of the pair.
  1. In code (MT4):
    1. You place the stop where it needs to be - where the reason for the trade is no longer valid. E.g. trading a support bounce the stop goes below the support.
    2. Account Balance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the SPREAD, and DeltaPerLot is usually around $10/pip but it takes account of the exchange rates of the pair vs. your account currency.)
    3. Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
                MODE_TICKVALUE is not reliable on non-fx instruments with many brokers.
    4. You must normalize lots properly and check against min and max.
    5. You must also check FreeMargin to avoid stop out
    Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5=0.1 Lots maximum.

  2. Use a GUI EA like mine (for MT4): Indicators: 'Money Manager Graphic Tool' indicator by 'takycard' Forum - Page 6

 
whroeder1:
A SL can not give you a "big loss." Only your risk can. Control your risk. Risk depends on your initial stop loss, lot size, and the value of the pair.
  1. In code (MT4):
    1. You place the stop where it needs to be - where the reason for the trade is no longer valid. E.g. trading a support bounce the stop goes below the support.
    2. Account Balance * percent/100 = RISK = OrderLots * (|OrderOpenPrice - OrderStopLoss| * DeltaPerLot + CommissionPerLot) (Note OOP-OSL includes the SPREAD, and DeltaPerLot is usually around $10/pip but it takes account of the exchange rates of the pair vs. your account currency.)
    3. Do NOT use TickValue by itself - DeltaPerLot and verify that MODE_TICKVALUE is returning a value in your deposit currency, as promised by the documentation, or whether it is returning a value in the instrument's base currency.
                MODE_TICKVALUE is not reliable on non-fx instruments with many brokers.
    4. You must normalize lots properly and check against min and max.
    5. You must also check FreeMargin to avoid stop out
    Most pairs are worth about $10 per PIP. A $5 risk with a (very small) 5 PIP SL is $5/$10/5=0.1 Lots maximum.

  2. Use a GUI EA like mine (for MT4): Indicators: 'Money Manager Graphic Tool' indicator by 'takycard' Forum - Page 6

Appreciate for your sharing, I think you have pointed out one of my incorrect mindsets, and I should focus on risk itself.

Do you have any good recommendation for reading material of risk/money management please?

 
luckyvictor:

Appreciate for your sharing, I think you have pointed out one of my incorrect mindsets, and I should focus on risk itself.

Do you have any good recommendation for reading material of risk/money management please?

Money Management

The forum

  1. MM (money management) calculation, indicators, discussion, tools: calculate your lot size and so on. Original thread with several versions.
  2. MoneyManagement EA is on this thread: it shows you market information and money management on the chart. 
  3. Forex Money Management, Part 1 - good small thread
  4. Useful money management expert - the thread with the EA 
  5. Stop Your Mind From Causing You to Take Profits Too Soon - the post with the educational video 
  6. Money Management: How to Determine an Initial Stop Level - the post with the educational video 
  7. Why Most Traders Lose Money and The Solution - the post with the educational video

The articles

  1. Statistical Verification of the Labouchere Money Management System 
  2. Functions for Money Management in an Expert Advisor 
  3. Fallacies, Part 1: Money Management is Secondary and Not Very Important 
  4. MQL5 Wizard: How to Create a Risk and Money Management Module 
  5. Money Management Revisited 
  6. Cross-Platform Expert Advisor: Money Management 
  7. Limitless Opportunities with MetaTrader 5 and MQL5 
  8. Money Management by Vince. Implementation as a module for MQL5 Wizard

CodeBase

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