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OK so my first trade didn't go to plan :o) I will admit, this may have been due to operator error.

Here's the data:

Bought 2008-10-01 14:56; Size=0.1; Price=1.4094; S/L=1.3444;

Sold (manual Intervention) 2008-10-06 12:14; Price=1.35666; Swap=-0.96; Profit=-528.00 (-528.96)

I manually closed the transaction because I had assumed that trading would stop at my 10% risk level ($500 loss) when it didn't. I needed to re-assess the situation (had I done something wrong originally) and start afresh.

I need to get my head around the basic math here so any help in pointing me in the right direction (books, internet, etc.) would be appreciated. For example a pip = 0.0001 movement??

Excuse my ignorance - but I'm only at day 6 of my Forex trading :o)

On the figures above:

That's a drop of 527.4 pips @ $0.1 - which does not equal $528 or even 527.4??? (or am I missing something, leverage for example?) On that topic, how do I adjust leverage on the Trader??

Risk Level set to 10% (on a $5,000 account) - why didn't the robot kick out at a drop of $500 which should have been at a price of 1.3594????

The S/L level (for the trade) was set at 1.3444 which seems in line with the 650 parameter.

Thanks for any help.

Hi David,

Here's my data from an earlier post:

Downloaded Autocash Robot yesterday evening - set up a Demo account with ForexMeta. Nothing happened for over 18 hours then "here we go!" The software made its first buy at 14:56 today (12:56 UK time) info:

Type - Buy; Size - 0.10; Symbol - EURUSD; Price - 1.4094; S/L - 1.3444

So Autocash Robot is working - I made some initial mistakes on setup (hey this is my first foray into Forex) the most glaring one was trying to use it on GPBUSD - whoops!

My settings (click on the smiley to access):

Inputs: StealthMode - True; Risk Level - 10; Stop Loss - 650; Maximum Lots - 0.0; Slippage - 5; Close Delay - 90; GMT Offset - 3;

Common: Positions - Long & Short; Enable Alerts - ticked; Disable Alert once hit - clear; Allow live trading - ticked; Ask manual confirmation - clear; Allow DLL imports - ticked; Confirm DLL function calls - clear; Allow import of external experts - ticked

Meta Trader itself. Tools - Options - Expert Advisors Tab: (picked this up from the ForexMeta videos)

Only tick - Enable Expert Advisors; Allow Live Trading; Allow DLL imports; Allow external expert imports. Ensure that all other boxes are clear. I'm no expert on Forex but the second and third options on this tab (if selected) may be the reason for some of the problems.

Cheerz

chicago

Chicago,

Review what a pip is, 0.0001, at 100/1 leverage. Therefor: 1 full lot costs $1,000 and controls $100,000 currency, each pip is worth $10.00. 1 mini lot costs $100 and controls $10,000 currency, each pip is worth $1.00. 1 micro lot costs $10 and controls $1,000 currency, each pip is worth $0.10.

ForexMeta dosent offer micros, at least not on the demo that I'm on. So our smallest position is a mini. Each pip is worth $1.00. With our stop set at 650 pips that is a $650 risk.

If we have a $5,000 dollar account and set the risk at 10 (10%), the risk should be $500, but with a 650 pip stop we can not trade that small. So the system overrides our stop and asigns us the smallest position available, 1 mini.

If we have a $10,000 dollar acount and set the risk at 10, we are accepting up to $1,000 of risk, but we can still only trade 1 mini, 2 would go over our risk setting. The unused capital sits there stagnant.

Now this is where it gets interesting:

If we run a $650 dollar account, with a 100% risk setting, we get the same 1 mini. Our risk in dollars is the same. The rest of our capital we put somewhere else.

Over a 1 year period, the return on the $650 dollar account is almost 70%. The position size doesnt change untill the account doubles at $1,300, at which point we can run 2 mini contracts.

Over a 1 year period the return on the $5,000 dollar account at 10% risk is 8.9%.

Over a 1 year period the return on the $10,000 dollar account at 10% risk is 4.4%.

All the 1 year accounts make the same $443.29, and trade the same 1 mini contract all year. None increase the position size untill the risk allowance reaches $1,300.

Over a 5 year period, the compounded return on the $650 dollar account is $4,551.25, or 140% annually. At the end of this period of time we are running 7 contracts, and our risk is $4550. Will you gamble it all for anouther 5 pips x 7 contracts, $35.

Over the same 5 year period, the compounded return on the $5,000 account is, $1784.00, or 7.5% annually. At the end of this period we are still running 1 contract, we need to reach $13,000 before the computer will add anouther contract.

Over the same 5 year period, the compounded return on the $10,000 account is, $1784.00, or 3.6% annually. We still havent added anouther contract. But our risk is still only $650.

Over the same 5 year period, the noncompounded return on $650 is of course $1784.00, or 54.9% annually. With the same $650 risk.

Its just a matter of how you look at risk and money managment. If you can handle the 100% risk, by only allowing absolute risk capital to be used, capital that you are comfortable losing, you can potentialy make a much greater percentage return. Remember, every time you trade you are risking the entire stop amount x as many contracts as you trade. You can, and sooner or later will, lose it all.

Therfore, it may be a better idea to run a fixed account/fixed contract size and increase it manually only if you are truly comfortable losing that much money. If you start with a set account size that you can afford to lose, and remove the gains every month as income, until you have accumulated an extra $650, then you can decide from a more objective position whether you want to add more risk to potentially make more.

Its still a huge amount of risk to stomach every time you trade, for such a small reward. If everything goes well and you constantly win its great, but that falls in the "to good to be true category".

Hi chicargo,

I think Ken has got it right in his explanation and has provided even more information on how to look at things so now you know why you went over on the limits you set.

Thanks Ken I got to learn some things as well.

I've got the Robot loaded on 5min, 1hr, 4hr and daily so I'll let all know which one appears to be the best.

Thanks for all the info Guys