Limiting Drawdowns, Maximizing Profits, XauBot’s Money Management and automated trading Techniques  - XAUBOT

Limiting Drawdowns, Maximizing Profits, XauBot’s Money Management and automated trading Techniques 

automated-trading

The goal and ultimate aim of using an automated trading solution such as the intelligent expert advisor XauBot Pro would be to minimize any potential risk and bring the losses to the lowest point possible while at the same time maximizing profitability and the potential profits that can be earned. 

This is what we are going to discuss in this article. We are going to focus on the aspects of XauBot Pro that are directly tied to minimizing losses and bringing potential risks to a minimum through the mechanisms that are integrated into it in the form of managing drawdown. We will also take a look at some of the mechanisms of this trading tool with respect to its money management techniques. 

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How Does Controlling Drawdown Help automated trading in Forex? 

We started this article by linking drawdown to profitability and the amount of profits that you can potentially gain in the forex market. But to elucidate on this point, we need to see the relationship that is between drawdown and profitability in the first place. 

The relationship that exists between drawdown and profitability is concerning the notion of drawdown itself. So let’s take a quick look at this concept and what it means in the forex market. 

Drawdown is simply the total amount of loss that you sustain. Not you exactly, but your assets. So imagine the total amount of assets or capital that you bring to the forex market, which is otherwise known as your trading equity or capital. After a certain amount of time that you spend trading and some possible losses that you might have sustained, the total amount of money that is lost from your trading capital is known as drawdown. 

So when you lose a number of trades in a row, the total loss that is the result from those losses is known as drawdown. 

This is precisely how drawdown is directly tied to the notion of profitability and the amount of profits that you make as a trader in this market. It is only natural after all that if you lose more than you gain, then you would have a low profitability rate and if you gain more than lose, well you get the point. 

So if you want to increase your profitability in the forex market, you need to implement mechanisms that can control the rate of drawdown. And this is exactly what XauBot Pro can do for you. Not only does it have mechanisms that are useful for increasing profitability, it also has specific parameters that are specially made from managing drawdown and keeping this rate at a minimum. 

In the following sections we are going to take a separate look at each of these capabilities integrated into this automated trading tool

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What Are the Drawdown Management Features of XauBot Pro as automated trading? 

So let’s see how XauBot Pro can handle the amount of drawdown in this market and how it is able to keep this rate to a minimum. Remember that in the last section we discussed the importance of drawdown and how it ought to be low in order for your profitability to be optimal. 

The way XauBot Pro is able to manage drawdown and limit it is through the many different parameters that it has integrated into itself that are specifically there for managing drawdown. 

It is with the help of these parameters that XauBot Pro has been able to maintain a low drawdown around 15% only. 

But what are these parameters? 

  • Daily drawdown limits: as the name suggests with the help of this parameter you can define the amount of maximum drawdown you can sustain on a daily basis. This can provide you with a great opportunity to manage daily losses and the total amount of loss that you sustain on a day to day basis. 
  • Maximum drawdown: this is the ultimate controller for drawdown. Obviously, the maximum drawdown value will let you define the total amount of drawdown that you want to sustain overall, hence the name maximum. This is perhaps the best ultimate limit that you can put on your account’s drawdown. For instance, if you set this amount as 20 percent, then it means that you are instructing XauBot Pro that you can sustain a maximum drawdown of 20 percent of your total account balance and no more than that. 
  • Then there are actions for when the maximum drawdown is hit. If and when this maximum drawdown limit is hit, you also have two choices and can define them for the EA. One, you can instruct the EA to halt all trading operations until you activate them manually again. Two, you can instruct the EA to halt trading operations for a certain amount of time, for instance 24 or 48 hours before resuming the operations once more. 
  • Different parameters for stop loss. There are different parameters that are integrated into XauBot Pro specifically for managing stop loss. These parameters also indirectly help manage and keep drawdown to a minimum. 

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A Look at the Money Management Parameters of XauBot Pro 

In the case of the money management feature of XauBot Pro, there are two overall and general approaches that this trading tool provides for users. First of all, you can opt out of it, which means you can define a fixed lot size for your positions in the market. 

Secondly, you can choose to activate the money management feature which will help you define and specify the lot size or position size for each trade in an intelligent manner. This calculation is carried out based on other parameters that you have defined for XauBot Pro, which are namely stop loss and risk per trader. 

In this way, as it can be seen, the size of each position is calculated based on your risk factor and risk tolerance thus helping you achieve the most optimal size for each position. 

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Conclusion 

In this article we discussed the importance of drawdown, what it means in the forex market, and how it is directly related to maximizing profits in this market. More importantly, we looked at how XauBot Pro is able to handle drawdown in this market and also what money management features it provides for users. 

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