While the concept is sound, the large DD's are a problem. The large DD's are caused by inefficient entry points. In general, efficient entries should be profitable at the outset. The EA basically gets in way to early without good confirming signals. If you read through Don's interview he freely admits the EA gets in very early before others see the trade. Anyway, trading without a SL can be very risky, but if the strategy is sound it should not matter. Having said that, my tests indicate that the EA has a very difficult time being profitable with a SL.
There are more than a number of people trading this EA successfully and they drop hints from time to time. Some of the suggestions are - closing out trades weekly, turning off money management and controlling risk yourself. Personally, I am researching currency trading to find markets uncorrelated to the equity market. As such, using all of the currency pairs without considering the correlation between the pairs only contributes to larger DD's. You should probably limit your portfolio to 4-6 un- or low correlated currency pairs. I changed the Lower TF to 30 minutes from 5 mintues. This should reduce the number of trades and improve entry points. I also use a trailing stop (#2). I also use the exit on color change. The only frustrating thing yet to solve is the risk / reward. It is hard to TP @ 20 pips after you experienced a 100 pip drawdown. I have always believed in letting winners run. I am also going to look at adjusting the start time for the various markets.
My demo has just started its 4th week and so far so good. I have yet to experience the big one, though I have had some interesting small DD's. I have been running a portfolio of 6 pairs. |