Compounding lot size and optimization

Do you determine your lot size based on account balance, so as balance increases lot size increases?

If so, is that mechanism included in your optimization passes?

I have these random light bulb / duh moments that remind me I’m not an expert at anything.

If we strap-up our lot size in accordance with account balance during optimization, results will obviously be weighted towards happenings in the latter end of the range. In other words, you’re not getting a true representation of what worked and what didn’t across the spectrum, because if successful trades in the first half of the range increased your account balance to bump up lot size on the trades in the second half, you don’t have an even P/L baseline across the timeframe.

Long story short, if your EA compounds its lot size as a percentage of account balance, turn that off and work with a fixed lot size throughout optimization if you want an accurate representation of effectiveness across the time range.

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My 3 cents, fixed stop loss in pips is very important to better risk control.

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I follow a different route all together. With each trade where I set a 1:2 RRR on each entry, I set a static stop to 50 pips and a static limit to 100 pips for each trade I wanna initiate.

Let’s put things into perspective here. If suppose I’m setting a static stop loss of 50 and limit as 100pips, what does it mean in a volatile market and in a quiet one?

Not that complicated actually. So if the market’s quiet, a 50 pips can prove to be a large move. If it’s volatile, the 50 pips can be considered as a small move. What I do is use indicators with different brokers for the same strategy for better clarity. With turnkeyforex, I use the pivot points and average true range. While with icm, I use price swings for accurately analyzing the risk management options.