Multi Brokers Test #6

This morning the entire account on the trials comparing various brokers who use 0.01 lots and 1250 capital experienced a considerable loss of $ 150. Because of this the Blessing EA stop trading activity due to equity protection feature is triggered.

Due to the test this time only used one pair only, research the cause of the loss is easier than ever before. Here below is a detailed history of trades:

Blessing seen yesterday doing 5 times entry and all is Buy. Though yesterday was very obvious EU is downtrend. But Blessing did Buy entry, it is definitely going the wrong direction and experience loss.

Blessing also did martingale method which increases continuously lot though entry is clearly in wrong direction. Consequently floating loss becomes very large over time due to many times entry which against the direction of the trend and compounded by raising the number of lots.

This is why equity protection is then triggered and finally the whole trading activity is automatically terminated by the Blessing.

From the above, it can be concluded that the Blessing requires a huge capital to withstand losses if the trend continuously moving in one direction just as it did yesterday.

In contrast to conditions in the last week which Blessing performance is very good due to the trend moved up and down within a narrow radius and not move only in one direction as it did yesterday.

Here below is the Open Trades this morning from FigFX broker:

Seen that although the floating loss has reached $ 2000 but entry is still left open to wait for the trend reversed.

In FigFX and FxPro used capital of 50 thousand with 0.1 lot so the ability to withstand floating loss on two accounts is greater due to capital employed is very large.

When compared with trades history above, because of insufficiency of capital then Blessing just do martingale up to 0.06 lots. But in FigFX and FxPro able to do up to 0.08 lots (0.8 lot divided by 10).

So that means when capital is still enough, Blessing will perform a continuous martingale although it will result in a large floating loss. And if equity limit is reached then the protection will be closed all open trades and trading activity is stopped.

This is what happens to a broker that uses 0.01 lot which at the time of loss has reached $ 150 or 12% (150: 1250) when equity protection feature is triggered. While on a broker that uses a large capital, although the loss has reached 2000 or 4% (2000: 50 thousand), equity protection is still not triggered and the open trades are not close.

From the above, it can be concluded that there are 2 main factors that support the performance of Blessing. First, trend condition itself and the second the existence of sufficient capital.

When the trend moves up and down within a narrow range as in the last week then the Blessing chances would be greater to survived, because floating loss will soon turn into a profit due to the trend reversed.

However, if the entry moves only in one direction just as it did yesterday then Blessing requires huge capital in order to remain able to withstand floating loss. If capital is not sufficient then the equity protection feature will be triggered and all entries will be in close so floating loss will immediately become realize loss.

For those interested to use the Blessing on the live account, be aware of the trend conditions. Never use Blessing if trends move faster in one direction only because if capital is not sufficient then it is definitely going to erode capital.

The results of the trial yesterday has shown us all one of the weaknesses of Blessing. Therefore, let us monitor the trial along with comparisons on the following days to find out whether there are other weaknesses of Blessing.