Demo testing EURGBP with Dukascopy 99% data

[ronjo]

I downloaded a demoversion yesterday and now I have demo tested with Dukascopy data
EURGBP 2009-01-01..2011-02-15.
I choosed to go with 5% risk and 100 pips S/L and all other settings at default. USD 10k account 1:100 STP.
http://www.palbury.com/EURGBP_5_SL100/

Total net profit 9861.45 for little over 2 years. Very low DD: Relative drawdown 4.29% (607.76)

When I looked at the result I saw that very few S/L hit the 100 pips. So I tried with 5% risk and 50 pips S/L.
http://www.palbury.com/EURGBP_5_SL50/

Total net profit 29093.70 for the same period. Relative drawdown 8.96% (1021.58)

Very nice results.
However it contradict your statement in the manual that bigger S/L gives higher profits.

/R

[Support_AdrianS]

Thank you for your research.
There are a few things to say to these tests:
1. The recommended trading time is 21:00 – 21:59 GMT for the summer time (USA GMT time) and 21:00 – 22:59 GMT for the winter time (USA GMT time).
2. We did our optimizations for Stop Loss and Take Profit without Money Management, because it is more accurate.
3. In the backtests that you made, the profit is higher for the Stop Loss set on 50 because the risk is doubled.
The robot calculates the size of the lots depending on Stop Loss and Risk Percent.
If risk is the same (5%) for both Stop Loss of 50 and for Stop Loss of 100, in the Stop Loss of 50 cases the lots are two times higher than if the stop loss was 100.
This is because you are using the money management.
The profit is higher because the risk is doubled.
4. We do all the tests and optimizations directly on Dukascopy with our java version of the program.

We are glad for your interest and we hope that you will continue this research. We will gladly respond to all your questions.

Kind regards,
ForexRealProfitEA Team.

[ronjo]

I saw the lots are twice the size at 50 pips stop loss.
If the S/L is hit the loss is still 5% of the account.
Can you explain how that can that be a bigger risk?

/R

I will continue my tests...

[Support_AdrianS]

The risk is equal for the same trade.
If the Stop Loss is set to 100 or if the Stop Loss is set to 50 and Risk Percent is set to 5, the same 5% can be lost within a single trade.
The difference between them is that if Stop Loss is set to 50 then more trades hit the Stop Loss than if you would use a Stop Loss of 100.
This influences the Maxim Draw Down negatively:
You can see in the tests you made:
If Stop Loss = 100, MDD = 8% for EURUSD
If Stop Loss = 100, MDD = 4% for EURGBP
If Stop Loss = 50 MDD = 14% for EURUSD
If Stop Loss = 50, MDD = 8% for EURGBP
In this way we understand a greater risk.
In a single trade, the risk is the same.

Kind regards,
ForexRealProfitEA Team.