Turning EA off in turbulent times

res114

Private, 1st Class
Messages
25
Hello other members.
I expect there will be turbulent times on the (stock) market after next week. The question is then whether you turn off the EA temporarily or for a longer period. With such a period, a high DD can arise that cannot be caught. Please give your opinion. It's not about which EA you have or what positions, but the general idea.
 

OldManIan

Private, 1st Class
Messages
29
When I backtest EAs, I typically test them through the GFC and Covid periods (beginning around March 2007 through now) - because I want to see how the EAs perform under extreme conditions. Although past performance can never be a guarantee of future performance, it gives me greater comfort to know whether an EA could survive an extreme condition and come out strong. As someone who also tried developing my own EAs in the past, and testing them through extreme conditions, I can tell you that many of them don't make it, and they crash and burn.
 

OldManIan

Private, 1st Class
Messages
29
So I would suggest you test your EA through extreme conditions like the periods I mentioned above. Some EAs can indeed be stopped (e.g. scalpers that don't typically hold a position for more than a few minutes or hours and you don't have any 'open' positions); but others aren't so easy (e.g. some grids or martingale type EAs which rely on 'open' positions for a period of time, often with multiple trades which then close as a group). Also, when you have turned off your EA, your stop loss may no longer function as intended; or when you turn it back on, and the prices may be going against you then bam! your SL triggers and you close out with losses the moment you turn it back on. So as is the case with many questions, the answer is "it depends"...
 

res114

Private, 1st Class
Messages
25
Hi thanks for your answer. My EA is a scalper with grid postions, so that is a mix. On the other hand it could be well that we do not get a creash that is so hars as the one in March for Corona. This could be more easy and then the EA could make big profits (swings)..
 

ulianacheck

Recruit
Messages
16
Hi thanks for your answer. My EA is a scalper with grid postions, so that is a mix. On the other hand it could be well that we do not get a creash that is so hars as the one in March for Corona. This could be more easy and then the EA could make big profits (swings)..
I saw a lot of EA closed and then after couple weeks started working again. They tweaked their systems so they can gain profit even now in such unstable times. So maybe you can do that too?
 

Troca

Private
Messages
24
When you pause an EA, you also reduce its ability to recover...so that is also a risk.
 

kingsman

Sergeant
Messages
202
EA if designed keeping in view of the market makers moves, then it is good. Otherwise, it will blow your account sooner or later. I have seen best of the EAs failing which were marketed heavily and at high prices.
 

Pheniox123

Sergeant
Messages
162
Hi there,

Here is my opinion and my real life experience (which caused me a huge loss).

I tried disabling/limiting the new orders the EA makes during the turbulent times; and I even tried to hedge the open trades etc. The problem is (thank you to the analysis carried out by the guys here) is that it becomes very hard to fully hedge the multiple trades that the EA has already opened; and before you know it you end up messing the calculations and it all goes pear shaped very quickly.

I think the only way to mitigate (if you are already in deep waters with the EA) is to let it keep doing what it's doing (as who knows it might just save all the positions with a sudden split second spike your way); BUT make sure you have a mental stop loss in your mind - as when the DD reaches this level you can say I am out and be happy or add funds to sustain the DD ONLY if you are happy to lose all of it...as you have no control at that point.

For me personally; going forward I will not be using this EA and will be developing a new one to ensure it has a failsafe system when crashes happen...something that triggers it to stop making orders by itself when it notices strange or extreme volatility in one direction.

See my thread here of how much I lost with the EA during turbulent times (I even thought I was being scammed but it turned out it was just me trying to save a sinking ship with a broken bucket) .

Resolved: IC Markets ($43,450 LOSS)
 
Last edited:

theskyu

Spamvertiser for BluFX.co.uk
Messages
3
Hello other members.
I expect there will be turbulent times on the (stock) market after next week. The question is then whether you turn off the EA temporarily or for a longer period. With such a period, a high DD can arise that cannot be caught. Please give your opinion. It's not about which EA you have or what positions, but the general idea.
I never use an EAduring turbulent times. I wait till its all over
 
Top