Protect your trading accounts: Introducing Drawdown Manager EA for MT4/MT5! Say goodbye to account explosions! – Trading Ideas – May 1, 2024

The withdrawal rate is the largest percentage drop from the peak of your account balance. Let’s say you start trading with $50 and after making some profits, your account reaches the maximum of $100. Now, after taking a loss from this point, your account balance will drop to $70 and your loss will be 30%.

Why is it important?

Most algo traders add one or more professional advisors to their accounts without proper backtesting or money management. Sometimes, you only see ads and rely on the website for revenue. As a result, one day suddenly their account gets blown up. You need safeguards to protect your account from these unwanted situations.

Drawdown Manager is a professional advisor designed to manage your trading. These transactions can be done through expert advice or manually by you. Therefore, this will act as a safeguard for your account. This means there is no logic to make a trade. Rather, they only confirm the current trade, reach a downside, or other safety conditions before exiting.

There are a variety of inputs that give you a lot of flexibility in how you manage transactions for that account. Prop company traders have many rules to follow. For example, there should not be more than N trades per day, and the daily, weekly, monthly and overall loss rate of the account should not exceed x%.

So, to set it up, open a new chart with symbols in it. Then put a professional advisor on that chart. Then go to the input section of “EA”.

Now let me explain the inputs one by one.

log capture

If set to true, valuable information will be printed in the Expert tab in case an error occurs during a transaction termination or some calculation due to incorrect settings or other reasons.

Magic number activation

Setting this to true will cause Ea to only calculate losses for trades that have this specific magic number.

Magic number

When the Magic Number filter is activated, reductions and other calculations will only be performed for the magic numbers mentioned within this field.

Delete pending orders after N bar

Sometimes we manually place pending orders based on some signals or other “EAs” place orders. The orders for that signal may not be executed and you forgot to delete that signal after some time. Losses are likely to occur if activated long after receiving the signal. Because it wasn’t triggered when it should have been. We have this configuration to prevent this situation. So, mentioning 5 means that the limit order will be automatically deleted after 5 candles from the time it is placed.

loss amount

This input field confirms the total loss on your account. If the total loss in your account is greater than this value, take the action mentioned in the Actions tab. Let me show you a quick demo. Let’s set the loss amount to 10. Next, let’s scroll to the bottom of the settings and set the action to Close All Transactions. Right now I’m setting other values ​​to false. Now let’s make two random trades in succession so that the total loss quickly reaches that value. As you can see, all trades were closed as soon as the account loss reached this value.

loss rate

This time, instead of an amount, the EA checks if the total loss amount is equal to X% of your account balance. Where X is the value mentioned in this input field. So currently our account balance is 986. 1% if you mention it in this input field. Then, when the total loss on your account reaches 9.8, you take the action of your choice. Here we have chosen to close all active transactions. Again, we will make random trades to quickly reach this percentage loss amount. As you can see, all trades are closed when the total loss reaches 9.8, which is 1% of the account value.

Check out swaps and commissions.

If this input field is set to true, all loss calculations will also take into account swap costs and fees charged by the broker for rolling over trades to the next day.

Now let’s take a look at the most important sections of EA. What are protection settings?

largest public transaction

Opening too many trades in one account can be risky and break your trading discipline. This increases your chances of loss. That’s why we introduced this input. If set to true, a user or EA cannot make more than X trades. Where X is this input value. As soon as another EA or you attempt to place a trade manually, this logic will close the last trade.

Maximum long/short trading

These inputs are very similar to the last ones, but they end up with the last transaction depending on their type. When a maximum long trade is mentioned, it does not allow long trades beyond the specified amount, and the same goes for the maximum short trade input setting.

Maximum transactions per day, week, and month

This input is the same as the last input. The difference is that it checks the maximum number of transactions you have in your account over a specified period of time. If you specify a maximum number of trades per day of 5 and 5 trades have already been made that day, your account will be terminated by this EA if any additional trades are placed on this account. You can view this information in your dashboard. Likewise, if the maximum number of transactions allowed in a week is exceeded, further transactions will be suspended until the end of the week. And the same goes for the moon.

maximum reduction

If you set this field, EA will continuously monitor your account for losses. When the value mentioned in this input field is reached. Performs the corresponding action mentioned inside the action input. So let’s quickly test this feature. I’m setting the drawdown % to 0.2. In other words, all transactions will be terminated when the account loss reaches that value. You can monitor this value in your dashboard. So, let’s make a random trade and wait until we hit the downside. As you can see, the trade was closed as soon as it reached the downside. Now that you’ve closed out your other EA deals, you might be thinking, why not trade them again? We have a solution for this situation too. We will discuss this at the end of the video. So I request you not to skip any part.

Daily, weekly and monthly declines

These inputs are also intended to monitor declines. However, EA monitors declines over individual periods. All of these values ​​are displayed on the dashboard. If you are referring to daily, weekly and monthly declines of 5%, 10% and 20%. Action will then be taken once your account loss rate reaches 5% in a day and will remain in effect for the whole day. On the other hand, if the drop rate for a week reaches 10%, action is taken and applies for the remainder of the week. Eventually, action will be taken when the decline reaches 20% within a month, and this decline will continue until the end of the month.

Now let me show you the last and most important part.

Action settings

These inputs control what the EA does when it meets some criteria. At first glance, you might think that liquidating all your trades is the only course of action. But wait, what happens if someone tries to trade manually even after the maximum drawdown condition is reached? Although this will be terminated immediately by EA. However, if the lot size is large, a huge loss will occur even if the business closes immediately. To prevent this situation, you have two options:

Close all charts

Let’s say your trade is being made by another EA running on a different chart. So, if this option is enabled, the trade will be closed first when the trade close option is enabled. Then all charts are closed. As the charts are closed, currently EA cannot place, modify or close trades in the terminal. Users can only make manual transactions. So let’s take a look at the demo. We’ll increase the drawdown a bit and try random trades to reach the drawdown quickly. As you can see, all charts are closed.

Close the terminal

This is the ultimate choice. Here we close the running terminal itself. So we will ensure that no one can trade manually or on EA. This time, let’s increase the drawdown a little more. Now let’s once again get to the downside with some random trades. As you can see, this time the terminal is closed by the EA after all transactions have been completed.

Notification settings

There are three types of notification settings: notification, notification, and email. When set to true, the terminal will send notifications, push notifications from the MT4 or MT5 mobile app, and send emails configured in the terminal. If you don’t know how to structure your email, please follow this video.