Strategy testing

Beginner Questions
1

I opened a demo account a week or so ago and making trades based on 3 standard mt4 indicators. Generally my trades are solid most of the time but stops close my position more than I would like.

A brief overview of my trading position…
I am opening trades based on trend changes(on 1 hour charts) only on 5 of the major pairs and pips with my broker are to 5th and 3rd decimal places. My accepted loss per trade is ~$100 and so far I have been opening with a volume of 1.0 and set a 100 pip stop loss with a trailing stop of 20 so a ~100 pip movement in the wrong direction closes my position. A high percentage of trades follow the change in trend but often stop out first before the trend heads in a profitable direction. I don’t know where to find what leverage I’m using but a 1.0 trade volume drops my balance by about $300-400. This seems to be ok but I don’t know whether I should modify something there with my trading too.

Now I need to adjust my trading to avoid early stops but without dropping more than $100 per trade. There are several options such as opening with a lesser volume of 0.1 or 0.5 and adjusting stops to still allow my $100 loss limit and accepting lesser profits but profitting more often. (Any other suggestions welcome)

I would like to be able to back test various combinations of volume vs stops to find what is most effective for my trading style however because I open trades manually at certain times of day by reading charts, I don’t know how to do this without manually testing hours and hours of historical charts. I have a small amount of programming knowledge, but not enough to develop my own EA based on my specific trading requirements. What are my options or where can I find more information on this topic?

2

Your best bet is to write an EA to test. Another solution is to use Excel or another analysis tool like MATLAB. But I think Excel would be the easiest, fastest to learn while getting the job done.

Good luck!

3

You should be able to set and view your leverage in your broker account through their website so it applies to your account or MT4 account.

I actually had the same problem when I first started. I solved it by only looking to enter after the price has started to descend off of a bounce. Place your Stop Loss above the hump, resize your position so it matches the dollar amount you want to risk, and don’t use a Trailing Stop. When you gain whatever the pip size of the position is, move the Stop up. So for example; if you stick with 100, once you gain 100 move the stop up 100; gain another 100, move it up another 100. And so on.

There is such a thing as over-managing your trades.