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Basic Terms?

  • #1
  • First Post: Mar 10, 2007 8:26pm Mar 10, 2007 8:26pm
  •  Trader#0000
  • | Status: Unregistered Trader
Can some tell me...

What is a drawdown and why do some Expert Advisors are more prone to it than others?

What is a Stop Out? I'm doing Strategy Testing and some of the test are stopped out at variours times. Also does a stop out effect ones balance?

Cheers!
  • #2
  • Mar 10, 2007 8:37pm Mar 10, 2007 8:37pm
Quoting XOLOSIS
Can some tell me...

What is a drawdown and why do some Expert Advisors are more prone to it than others?
Drawdown:
Starting Balance = $10,00.00
First Trade Ends up Gaining $100.00 BUT... Before it did, It fell to a position of being Negative $50.00. $10,000.00 Account Reduced Down By $50.00 = 0.005% Drawdown. So, you see, 2% Risk {as promoted here at FF} is actually very realistic.

Quoting XOLOSIS
What is a Stop Out?
A question for others to answer.
  • #3
  • Mar 10, 2007 9:15pm Mar 10, 2007 9:15pm
Quoting Bemac
Drawdown:
Starting Balance = $10,00.00
First Trade Ends up Gaining $100.00 BUT... Before it did, It fell to a position of being Negative $50.00. $10,000.00 Account Reduced Down By $50.00 = 0.005% Drawdown. So, you see, 2% Risk {as promoted here at FF} is actually very realistic.
lol...Bemac, I'm surprised...I thought for sure you'd have known the second one too.

A stop out is when the price hits the price of your stop, or "hits your stop" and your trade is closed.
  • #4
  • Edited 7:24am Mar 11, 2007 3:19am | Edited 7:24am
  •  Trader#0000
  • | Status: Unregistered Trader
Ah okay. I think the Strategy Tester should keep going instead of stopping the entire test all together.

Thanks All!
  • #5
  • May 11, 2016 9:51pm May 11, 2016 9:51pm
A Great Forex Trading Course - Work smarter, Not harder (15 Videos)
  • #6
  • May 12, 2016 3:42am May 12, 2016 3:42am
Quoting XOLOSIS
Can some tell me... What is a drawdown and why do some Expert Advisors are more prone to it than others? What is a Stop Out? I'm doing Strategy Testing and some of the test are stopped out at variours times. Also does a stop out effect ones balance? Cheers!
Stop out means margin can no longer support your trade, so you need to deposit more money to keep the position open or you will face stop out level (which is different in different brokers) and your orders will be closed one by one
  • #7
  • Jun 9, 2016 9:30am Jun 9, 2016 9:30am
Although this thread is quite old, it might still be useful for others.

For basic FX terms, google "Forex glossary"
  • #8
  • Dec 27, 2020 12:29pm Dec 27, 2020 12:29pm
Successful trading is about consistency. If you can make money consistently, you are successful. To become such one needs a lot of knowledge, experience and skills.
  • #9
  • Dec 27, 2020 5:16pm Dec 27, 2020 5:16pm
Quoting Salvatorefx
{quote} Stop out means margin can no longer support your trade, so you need to deposit more money to keep the position open or you will face stop out level (which is different in different brokers) and your orders will be closed one by one
It is kind of irritating if you are trading with small amount of money by using low leverage
  • #10
  • Last Post: Jan 5, 2021 8:34am Jan 5, 2021 8:34am
Quoting Bemac
{quote} Drawdown: Starting Balance = $10,00.00 First Trade Ends up Gaining $100.00 BUT... Before it did, It fell to a position of being Negative $50.00. $10,000.00 Account Reduced Down By $50.00 = 0.005% Drawdown. So, you see, 2% Risk {as promoted here at FF} is actually very realistic. {quote}
Yes, you are right I agree with you.
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