SQ3 Money Management Fixed Risk Percentage error?

6 years ago #117469

Hi guys,

I have ran into a problem. Below are my settings. If I were to use 0.5% risk for each trade on a 1000 account, as shown in the result my 2nd and 3rd trade would have cost me 700 and 300 dollars in losses consecutively. How is that possible? 0.5% of a 1000 account is nowhere near that number. The lot size in the results tab showed 0.1 which also escapes me, when most other lot sizes are 0.01.According to my calculations, it would be a trade with a 5 pip SL in order for a 0.1 lot size to take place, which is not possible as my settings in the generation stage is min 20 pips and the strategy SL is : Stop Loss = (7.52 * ATR(5)) pips. The problem seems to go away when I use larger account sizes like 5k and above.

Would really appreciate if someone would help clarify this, thanks guys!

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6 years ago #144345

Hi Shawn, I’m not sure is this is related (but probably is).

I discovered that if your account size is so small that a trade would be less than 0.01 lots, it makes a giant-sized trade instead (1.0). Therefor, I always use $100,000 as my account size and go from there. Then, you need to divide both the account size and *smallest* lot size by a number that brings the account size to your actual account size. After this, if the smallest lot size is less than your broker allows, the system is not tradable with your current account size due to a too large Standard Deviation.

In other words, if your actual account size is $1,000 and the smallest lot size using $100,000 as the SQ account size is less than 1.0 lots, then you must have a larger actual account size by a factor to bring the modified minimum lot size to 0.01 or larger. If the minimum lot size is shown as 0.5, for instance, you need a 2,000 account. Otherwise, when deployed, these lot sizes will not be traded (At least that’s what I assume…I haven’t messed around with actual trading on MT4 much yet!) and the system will be inaccurate.

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