15 Fatal Forex Expert Advisor Configuration Mistakes.
1. Wrong money management.
Proper money management will save your account. If you using autolot algorithm 1-3% of your deposit is the good starting point for conservative trading. 3-5% for aggressive settings.
For fixed lot size settings is 0.01-0.03 lot for each $100. Risk is lot putting to a stop loss distance.
2. Points or pips values.
If your robot allows you to choose points or pips settings you should set this parameter by your preference. In my case I always using points values not a pips. 100 points equals 10 pips.
3. No stop losses or misunderstanding risk management.
Your stop loss is the risk you allow to take in case a wrong entry point. If you not using a stop loss parameter your robot should set for risk management by another tools or algorithm.
Perfect way for setting up a SL is based on ATR indicator or a fixed value calculated through mt4 strategy tester optimization process for current pair.
4. Targets or Take profit configuration.
Take profit should be at least x2 of your stop loss. As a stop loss you can set by ATR or optimized value. Also you can set a trailing stop or smart tool based on amount of floating profits of current running orders.
5. Stealth SL and TP.
I always using stealth sl and tp execution cause my robots are running on my servers 24/5. It's allows me avoid non market losses situations with spread control system.
6. Spread control ignoring.
If your robot allows you controlling broker's spreads for opening or closing orders process. Spread jumps, news, any broker's servers cheating tricks you can reduce by the algorithm. Max spread values should be calculated for each pair individually. Pay attention for spread rising on asian session so your robot should have separate parameters for the sessions.
7. Market execution errors.
If you're trading on ecn with market execution of orders your robot should have this setting.
8. Magic number.
If you want isolate your robot working from other robots or manually placed orders on one trading account. The parameter should be unique for each EA. If you want your robot will control your manually opened orders the magic number should be set to 0.
9. I always setting up a mail reports and push notifications to my smartphone.
It's very handy for controlling your auto trading without running a terminal or launching RDP connection to a trading server.
10. OnTimer execution.
If your robot trading with multiple pairs the parameter should be activated for reducing tick lag events.
11. Max trades.
You always should limit amount of open orders for prevent free margin drains.
Allowing your broker's servers open orders with different price from current value. Should be tight but enough for reducing off quotes errors. 5-10 by default.
13. GMT offset.
If your robot have this parameter it need to be specified correct by time of trading server not your pc local time.
14. Friday's evening trading.
At the end of each friday robot should close orders or leave some orders with nice profits to a monday. The bad decision is open new orders after 21pm. At this time all traders and banks closing their profits this non market impulses can hit your stop losses.
If your robot allows you to trade with built-in trade panel you should activate this opportunity even your strategy is full automated. Any time you can open an order with magic number of your robot or close all opened positions by a click the one button. It's very handy for correcting EA trading process.
Finally the MOST common mistake
Is running any new trading automation software on live account without backtesting or demo forward testing.
If you have recommend settings or optimized settings file for a robot it's not guarantee the same trading performance with your broker.
I do some tests and the same robot version, same settings, same account type, run at the same time have different results. Not fatal but different take profits, stop losses.
Just be smart and set your soft like you want to trade manually.