Big loss on March 16, 2011

[Support_AdrianS]

A tsunami hit the forex market last night right at 21:00 GMT, on our robot trading time.
Our Alpari UK real account has suffered the greatest losses and it seems like some of the trades were not closed as it should have.
Our MBTrading real account made an unexpectedly large profit, as trading began a few minutes late, due to MBTrading roll over break.
In this extreme situation, the broker and the luck made the difference between good and bad.
It was an unusual situation, an exception we could say and we will treat it as such.
Both our real accounts are on profit since when we use our robot, and we do not consider that it is necessary to radically change a good strategy due to exceptional circumstances, but we will take precautions to avoid large losses if such things happen again, if it will happen again.
All strategies are long term tested and optimized to produce the highest possible profit and therefore the trades follow a pattern.
Sometimes this pattern seems disadvantageous on a short term but on the long term is the best solution.
Loss is part of the trading and cannot be avoided.
For us it's not a start, only the continuation of 10 months of live trading.
We hate to lose also and therefore we constantly test the best strategies on other testing live accounts.
All the improvements will be included in the next updates.

Kind regards,
Adrian.
ForexRealProfitEA Team

[senan]

Adrian,

How big was the loss? When i read you manual i saw there is a hidden SL on all the orders did it not protect against it?

If we place a fixed max stop loss of 100 pips for all the orders how do you think it will affect performance?

Is there any other changes made to the EA to protect against it?


Thanks

[support_CataH]

According to our MT4i.com statement link at http://www.mt4i.com/users/forexrealprofitea2 the loss on the 16th of March 2011 was of 14%. You can check it yourself at the up said link.
Yes, our EA has a dynamically (hidden) stop loss value, and a MAXIMUM of 100 pips stop loss, although, if you check our statement you can see that on the 16th of March we had a position closed at -218.5 pips, one closed at -181.9 pips and one closed at -137.9 pips. This is not normal when you set up a MAXIMUM stop loss of 100 pips. Yes, we can understand slippage, and we can understand some differences between theoretical and practical but there is no such normal thing to close a position at a difference of 118.5 pips of your maximum stop loss. That's why we stated that the way to go when trading forex is ECN, not commercial brokers. We will probably soon move our funds from Alpari UK to another broker (ECN) because of the negative impact that this broker had on our live account.
We want to let you know that we have updated our EA with a volatility filter (starting with version 5.20), that prevents it to trade when the market is too volatile. Until now there was no need of a volatility filter because things like the ones on 16th of March 2011 never happened before in our tests, and any extra filter diminish the profits, so we wanted to keep the trading filter free. But the reality showed us that things that never happened before, can happen, so we included the volatility filter to be used by anybody who consider it safer. Me personally, I wouldn't use it, but it is each customer's choice whether to use it or not.

Fixed max stop loss of 100 pips has a weaker performance compared with a dynamically internal stop loss combined with a max stop loss of 100 pips. Of course, max stop loss value can be altered for a better performance, but with bigger draw down also.

I hope that I made myself understood.

Regards,
Catalin
ForexRealProfitEA Team

[senan]

Thanks for the information. How is fixed 100 pips SL different from dynamic internal stop loss combined with a max stop loss of 100 pips. Is it becoz of brokers SL hunting?

[support_CataH]

Fixed 100 pips stop loss is the maximum loosing limit. Usually ForexRealProfitEA closes before this limit is hit, and this is done by the dynamic internal stop loss. It doesnt have anything to do with broker SL hunting. For this, invisible mode is available, but we do not advise anyone anymore to use the invisible mode due to the loss we are talking about in this thread. Instead we advise our partners to use an ECN broker.

Fixed SL is what its name says. Its the SL that you normally set after you open a trade. Our EA has 2 methods to close a trade. One is the fixed one, and the other one is the internal one, which is not fixed. It can vary with market conditions.

Regards,
Catalin
ForexRealProfitEA Team.