You are probably looking for the low drawdown Forex robots or EA because you don’t want to expose your capital to too much risk and prefer low-risk expert advisors.
well, in the following table, you can find low drawdown forex robots in 2020 that I’ve gathered from more than 200 EAs. The drawdowns of them are less than 30%.
Forex Robots and EAs with Low Drawdown
Click on the titles on the table, for example drawdown, to sort them out from low to high and vice versa.
|Forex Robot||Review||Drawdown||Gain||Floating P/L||PF||Days||Trades||Chart|
|August Forex Golem||See Review||3.1%||363.8%||21.9%||1.42||248||459|
|Auto News Trader||See Review||6.9%||1736.2%||0%||10.39||852||588|
|Flex RSix3||See Review||19.56%||222.95%||0%||2.59||598||311|
|Flex SRV1/SVV2||See Review||17.55%||194.26%||0%||2.48||466||869|
|Forex Cyborg||See Review||16.13%||70.34%||hidden||1.26||974||2063|
|Forex Device||See Review||1.1%||45.5%||31.1%||1.78||261||268|
|Forex Real Profit||21.1%||407.87%||0%||1.18||2501||7366|
|FX Flight Pro||13.9%||164.7%||3.27%||1.74||158||1844|
|News Action Trader||See Review||20.07%||229.56%||0%||1.34||864||1111|
|The Wave Scalper||See Review||12.63%||106.72%||0%||2.35||275||151|
|The Skilled Trader||9.12%||111.77%||0.2%||1.99||177||247|
|NCM Signal||See Review||12%||213.09%||0%||1.88||803||791|
For finding the best forex robots, you can check out the following article
Why Low Drawdown Forex Robots?
One of the metrics indicating that an EA or forex robot is reliable to some extent is drawdown because it shows us how much money an EA is prone to lose before getting back to break-even and then profit.
In other words, how much risk it’s willing to take and how far it can dive into a loss.
When an EA has low drawdown, it means that the creator of that doesn’t let the losses grow too much and has a plan for that. It also means that he/she is well-informed about the money management and doesn’t want to risk too much at any cost
Apart from that, when you use too much margin and let your losses grow aggressively, what you do is more like gambling rather than trading, so your account has a high potential to be blown up at any time.
That’s why wise people are looking for the forex robots that have low drawdown because they know that these kinds of EAs have more chances to survive in the long term and as a result bring them profits.
Current Drawdown (Floating Loss)
This is the tricky part of a forex robot stats when it comes to drawdown. Some people just look at the drawdown of an EA to figure out whether it’s risky or more reliable but drawdown is calculated when trades are closed.
What if a robot keeps trades open for a long time?
Is it safe to go with an EA that shows a drawdown of let’s say 5% but it has 50% floating loss or current drawdown?
Technically, the EA is suffering a 50% drawdown in this scenario but we might not be aware of that if we don’t dig deeper and look at the equity and balance of the EA.
Some Websites that provide stats for EAS or strategies have metrics such as floating p/l or current drawdown so that you can see if an account is suffering a loss at the current moment but if you can’t see such metrics, you can just look at the difference balance and equity to notice that.
For example, if you see the balance of an account is $1000 but the equity shows $500. it means you have a 50% drawdown at the moment.
So when you look for the EAs with low drawdown, you should consider floating loss or current drawdown as well.
How Much Is Considered A Low Drawdown?
Well, the general answer for this question is the lower the better,
Because when you lose x% of your account, you need to gain x+n% to get to the break-even.
How’s that possible?
That’s very simple. Let’s say you have $100. Then you trade and lose $10. In this case, you’ve lost 10% of your account.
Now you have $90. How much you need to gain to come full circle? Obviously $10.
Now what percentage of $90 becomes $10? The answer is 11.11%. So we’ve lost 10% of our account in the first place but now we need to gain 11.11% of our account to breakeven.
That becomes even worse when we lose a larger portion of our account.
For example, if we lose 50% of our account, we need to earn 100% to get to the point where we started.
All in all, most people consider a drowdown less than 30% a low drawdown. Above this number, a forex robot enters in a risky zone.
Does Low drawdown Always Mean Low Risk?
Not necessarily. As we saw earlier, there are some forex robots that show low drawdown and sometimes even zero drawdown but they always have a huge amount of floating loss or current drawdown.
A good example of that is grid EAs. What grid EAs do is that they open several positions consecutively in one direction with a specific distance, so when the market moves to that direction, it starts hitting the TPs of those positions.
For example, a grid EA opens 0.1 lot positions every 10 pips that the market moves. So if the market is bullish and the EA opens buy trades, after 50 pips, it’s opened 6 trades with 0.6 pips in total.
Another version of Grid EAs is opening positions in the opposite direction of the market.
For example, a forex robot opens a buy position. If it hits the target, it’s won a trade and nothing else happens. But if the market doesn’t get to the take profit and it changes direction, the EA starts opening trades in the same direction of the first position, which is actually the opposite direction of the current direction of the market.
The EA keeps doing that until the market gets back and closes all the positions either in a break-even point or in profit.
That’s why sometimes you see EAs with large current drawdown but 0 or very low Max drawdown. When you look at their positions, you can see lots of open trades that are kept for days.
An example of a poorly programmed forex grid robot is an ea with small targets and very long average trade lengths.
Basically, such a Forex robot lets trades keep open for a very long time which means it hopes the market gets back before the account gets a margin call or blows up entirely as a result of using high leverage.
That’s why low Max drawdowns in stats offered by some websites such as Myfxbook or FXBlue don’t necessarily represent low risk and you need to look into other metrics in the stats such as floating P/L, the historical difference between balance and equity, the average trades’ length, and the statements of EAs.