I got a question, which i don't have an answer to, because it would require me to get a working strategy in the first place to test this out, but I think this is a good idea, so I count on your experience to help me
So, if we have a robot that trades in multipairs, the drawdown is the enemy right, but I thought of a method to limit DD :
the idea is : let's set a drawdown limit for each pair : then, do we have a DD higher than this limit on one pair ?
- If yes, then do not open other trades on other pairs, maybe even close the other trades, and wait for the DD to get back to normal.
- If not, then open orders on other pairs as usual.
This way can we limit the max DD?
If the set threshold is 2 percent for instance, then we stop trading on the other pairs (that could add to the max DD) and we wait to the DD to be resolved on the culprit pair.
I know that trading on multiple pairs lowers the DD globally, because max DD of every pair is rarely occuring at the same time on every pair, but what about the idea to stop trading on other pairs if the DD of one pair is higher than a threshold ?
thanks for your participation
Jeff
So, if we have a robot that trades in multipairs, the drawdown is the enemy right, but I thought of a method to limit DD :
the idea is : let's set a drawdown limit for each pair : then, do we have a DD higher than this limit on one pair ?
- If yes, then do not open other trades on other pairs, maybe even close the other trades, and wait for the DD to get back to normal.
- If not, then open orders on other pairs as usual.
This way can we limit the max DD?
If the set threshold is 2 percent for instance, then we stop trading on the other pairs (that could add to the max DD) and we wait to the DD to be resolved on the culprit pair.
I know that trading on multiple pairs lowers the DD globally, because max DD of every pair is rarely occuring at the same time on every pair, but what about the idea to stop trading on other pairs if the DD of one pair is higher than a threshold ?
thanks for your participation
Jeff