How To Win With Trading Robots Using A Portfolio Approach

Introduction

Many people fail to use trading robots successfully because they are so focused on using one robot in one specific way

This basically sets the stage for an All or Nothing situation if the robot works then they do well if it doesn’t, it probably will blow their account

In this video, we will go over the best way to use trading robots through a portfolio approach and provide you with some links and free resources to help you as well

Managing Risk

The challenge in using trading robots is how to manage risk and to make sure that the robot doesn’t over leverage your account and cause you to lose everything

The best way to manage risk using trading robots is to use a collection of robots that trade Different Strategies at Different Times on Different Instruments

This way you can balance your risk across a variety of assets and have a better chance at maintaining and growing your account

You can also use a trading robot called an account protector for added security of your account but more on this later

By far the most important thing to consider to manage your risk is your lot sizing. Always be conservative with your lot sizing when using trading robots. Losses hurt a lot less if they are small. Sure winners feel great when they are big but if you have a portfolio of trading robots winning small more than they lose then you are going to win big in the long run.

Creating a Portfolio

To create a portfolio of trading robots you have to test your strategy on a variety of assets

You want to find the settings that have the lowest drawdown and the highest return

And you want to make note of the days of the week that are best for that asset

Next, you want to upload the set files into the various instances of your trading robot and backtest them, this way you can watch in real-time how the settings trade and whether or not you will be able to handle the moves that are happening.

You also want to forward test your results to make sure that they are not just an anomaly. Markets change and if a trading robot is successful during a downtrend it may not be successful in an uptrend or even a sideways market.

Creating set files with robust results that can trade in a variety of market conditions is the key to a fully automated successful trading system.

Some key tips to pay attention to are:

Use Correlated Pairs – try to use correlated pairs to hedge one against the other

Stagger Trading Days – Try to stagger the trading days of each robot so you don’t have a large drawdown in one day

Account Protector

As promised here is the one key tool to help protect your account from blowing up while using trading robots. Make sure you use an Account Protector.

An account protector is a trading robot that acts as a kill switch on your account. It is especially useful if you are using more than one robot on one account, this is not recommended, however. If the total account reaches a specified level of drawdown, the account protector will stop all trading and close all trades. This can be very useful if you are close to a margin call.

You can download a free account protector here:

https://www.earnforex.com/metatrader-expert-advisors/Account-Protector/#Downloads

Below you will find a link to one of our robots currently running that is up 100% for this year. This account is using the exact same methodology described in this video. We are running one of the EAs from Expert 4x on several forex pairs. We use correlated pairs that trade at different times and make sure the lot sizing is small so there is little drawdown.

Leave a comment below if you are interested in learning more about how to create and test set files for EAs. If we get enough requests we’ll make a video on how to create the best set files quickly for EAs.