Well that is a good question that you can answer by doing some forward testing. And the answer may well be yes depending on the size of the account you wish to trade and how many positions you want to scale in with etc..
Thanks Joe
I mentioned this because on the higher time frames the swings will be bigger and the signals less frequent.
But anyway, I feel that 10 pips is too close for comfort.
If a pair starts to trend and is not swinging back enough, then recovery will be hard to achieve. Based on my extensive experience with similar EA's we will be making money nicely for months and one day we will get caught in a large move against us.
In order to mitigate this risk I tend to space trades by a 1/4 of the ADR. So if the ADR is 80 pips then the spacing will be 20.
Also, the next trade should not be placed automatically at the spacing distance, the indicators have to give a signal for a trade to be placed so the distance of our next trade can be 20 pips or higher, perhaps 25, 30 or more.
A larger distance means that our trades will stay open for longer periods and this is something traders have to consider because there could be a cost involved (perhaps a swap cost and/or an opportunity cost).
This is something we have to decide as individuals, I'm only mentioning this here for the benefit of the newer traders.
We have to ask ourselves, what is more important? having higher returns for a few months and then having a blown account or having steady gains and being able to sleep at night?
Something to think about.
Have a nice day :hi:
