How can forex EA traders control the risks when using forex EA?

In fact, with the increasingly perfect financial market system, it is difficult to achieve risk-free investment, which is why every investor entering the financial market needs to respond to possible risks at any time.

Then we need to be proactive and make necessary preparations, which has become a knowledge that must be mastered when using EA. In the following courses, we will gradually teach everyone how to control the risks of EA and even forex trading.

Throughoutforeign exchange marketIn the process of theoretical and practical learning, many people believe that the two most false and empty words are risk control and mentality adjustment. They often listen to them a hundred times and then forget them completely in practical operation. They often feel like they are incarnating themselves as Tang monks reciting scriptures when constantly reminding various investors, but the results are often ineffective. If investors hope to gradually improve their risk awareness, please follow the analysis reports of recent weeks for in-depth thinking, and they will surely gain something.

Please answer the following questions first:

Question 1: Is profit more important or is principal more important?

Question 2: Have you considered the worst-case scenario before trading?

Question 3: Is it clear under what circumstances a position may be at risk?

Controlling EA risk is actually similar to controlling position risk, and the ultimate goal is to prevent position risk. However, EA is a program that cannot intelligently judge many factors that may affect the overall situation, so in some cases, manual intervention is required.GMI Forex

A simple example: Under the planning of the EA program, extreme market conditions such as Brexit and a 1800 point decline in the pound will not be taken into account, and even many EAs have relatively weak risk resistance capabilities in situations where their strategies do not align.

In response to the above viewpoint, let me give a specific case for analysis. If an investor is currently using the EA counter trend plus position type Martingale strategy, with a total position of $10000, leverage ratio of 1:400 times leverage, and a plus position ratio of 1.5 times, and currently holds 13 positions, the last position has 2.1 lots, and the total position is almost 6 lots, is it necessary to manually take over this position?

The answer is yes, for the following reasons: a $10000 position, although using 400 times leverage, has a total holding of 6 lots and a maximum holding of 2.1 lots. If the strategy continues, there will be an additional order of 3.15 lots, with a total holding of around 9 lots. If the market continues in an unfavorable direction, this position will be very, very dangerous and there is a high risk of liquidation.

Therefore, at the beginning of strategic planning, it is necessary to plan for possible situations. If there are small probability events, they need to be dealt with in a timely manner to avoid further losses or unnecessary losses caused by blind operations.

In this situation, it is necessary to decisively pause and continue to follow the program's method of adding positions, and adopt relatively conservative operations in order to potentially turn danger into safety.