Advisors for automated trading can be divided into conservative and aggressive. In the settings of conservative advisors, the most attention is paid to the parameters of risk management (calculation of the lot, stop loss, etc.). Aggressive advisors earn on the fact that they open as many transactions as possible, covering the loss with several profitable positions. Most aggressive advisors are based on Martingale and averaging strategies that are considered unacceptable for conservative (novice) investors.
Conservative and aggressive automated trading advisors
The disadvantage of conservative automated trading advisors is a rare opening position, the advantage is that the maximum drawdown is within 10-15%. The maximum drawdown of an aggressive adviser can reach 50-70%, but it is possible to evaluate the effectiveness of the robot almost immediately after its launch. Aggressive robots are first tested on cent accounts. The ideal is the simultaneous combination of both types of robots. There are two ways of combining: creating a security deposit from the amount of profit with its periodic withdrawal. And the method of redistribution of the deposit, depending on the impact of robots.
For example, there are three accounts: A, B and C with a starting deposit of $ 100. USA. After launching the robots (on account A, an aggressive adviser, on account B and C, conservative ones) we get the following performance:
- account A – 220 dollars. United States;
- B account – $ 115. United States;
- C account – 90 dollars. United States.
An aggressive automated trading adviser turned out to be the most productive, one of the conservative robots is unprofitable with a 10% drawdown. It is important that there is no correlation between advisers and assets, the relationship between robots is not acceptable.
In accordance with the first method, it is necessary to withdraw profits from account A in the amount of 120 dollars. USA. In accordance with the second – we trade further. After time, we get the following situation:
- account A – 60 dollars. United States;
- B account – $ 135. United States;
- C account – 105 dollars. United States.
Conservative advisers gave a small profit, but an aggressive adviser showed a drawdown of 40%. Compare the drawdown with statistical data. If in the test period the maximum drawdown of an aggressive adviser is 35-45%, we understand that a reversal will now occur. We transfer money from conservative accounts to an account with an aggressive strategy.
- A bill – 300 dollars. United States;
- B account – $ 0. United States;
- C account – $ 0. United States.
By increasing the amount of the deposit and leverage, we take the maximum profit from an aggressive strategy (+ 120% received after the first trading period – 660 US dollars.). Part of the profits we withdraw and return 135 and 105 dollars. United States on the accounts of B and C.
This strategy uses the strengths of an aggressive automated trading advisor based on test period data while maintaining moderate returns. Combining strategies of different types allows you to increase trading efficiency due to the synergy effect.