In this article, we are going to explain how to build an automated risk management robot for day trading and why it is so important for all traders. It does not matter if you are a full-time or part-time trader you need a fail-safe system to protect your money and the only way to do this is to automate it.
A classic example is that you have a robot that starts to lose on a massive scale
If you are out shopping when it happens, how do you deal with it?
This type of scenario is common and many traders do not know they are at risk until it is too late, you need to take action before it does too much damage. There is no single system that will cover all the market events that could cause financial risk, but you can take care of the most obvious.
Ask Yourself What Do You Need to Protect
If you want to protect your money, that is just part of the reason, what you really need to protect your strategy to make sure it operates within the boundaries and rules you set up when you analysed and designed the system, by doing this and making sure the boundaries are not breached you have a chance of achieving your goals and they may not always be financial.
Leaving Positions Open Over the Weekend
If you’re a day-trader and leave positions open only for a short time, a maximum of a few days then to leave any positions open over the weekend can be very risky as your stop-loss or the amount of capital you are using may cause problems if there is an unexpected price movement of 100 pips, if you trade longer-term looking at longer time frames, then you will ride out the larger fluctuations in price as you should have built this into your trading model. So let’s assume you trade with a small account and your average time a position is open is a few hours where you look at smaller time frames, you do not really want to leave any positions open over the weekend, so what can you do?
Close All Positions on Friday Afternoon
If you are lucky enough to work from home or not work at all, maybe retired then you can manage your own risk for this single example of weekend trades as long as you remember to close them. But if you have a full-time job and on a Friday, you are at the office or commuting home in busy traffic, you will not always be able to manage your trading, so we will explain how to create a simple cTrader Risk Management cBot.
The Solution is a Risk Management Robot
We are now going to show you how to create your own risk management robot which closes your open positions automatically at a set time on a Friday afternoon (GMT). The video below is from the cTrader Algorithmic School to help traders like yourself learn to create their own algorithmic & risk management strategies.
Watch the Risk Management Robot Training Video
We have many YouTube videos to help you, why not see them all, Our Algorithmic YouTube Channel.
Open the video on YouTube for best viewing at 1080p HD.
Duration: 32 minutes
Algorithmic Trading School
The Algorithmic Trading School for beginners is a hands-on school to help cTrader users build their own robots.