Risk Appetite when Optimizing Settings

Which settings to choose after the optimizer is complete? I will highlight in this example:

The best way I found in my opinion to filter the optimization results is by sorting the results by the highest profit at the top then look for the lowest Drawdown percentage.

Your ultimate goal is to target both, the highest profit and lowest drawdown. Ok, so which one?

This decision truly depends on your risk appetite and that means for some trader like me, I target the minimum drawdown I can ever find that corresponds to resonable "target profit". In this example when optimizing EURUSD, I will sort my prefered settings as follows:

  1. Drawdown % of 12.13 and Profit 113,253.29 USD
  2. Drawdown % of 11.48 and Profit 106,836.59 USD
  3. Drawdown % of 9.83 and Profit 66,341.04 USD

The winning row in my openion is row number 1 above. The reason is that the maximum Drawdown in this case with the deposit of 10,000 USD is as low as 1,213 USD at the worst case running during high impact news!

In the foreward testing or after the next update, we will be able to see the maximum drawdown as low as less than 2 - 3% "which is the target".

From the setting I chose here, the opposite martingale order will start from the 5th position to recover the losing series and close it in profit. This was found the best combination with the rest of other settings. I'm not saying that this would be the best set file, however, it was found as the best set file for EURUSD so far.

Get the Investment Castle EA from here:

To find out more about the news option, read this post:

Here is the optimized set file used: https://drive.google.com/file/d/1zc2BmMum26GJJcdkBFielhYk1t9mGI0C/view?usp=sharing