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Building a RMM strategy

 

 

 

  The RMM Robot is setup with a strategy to carry out the traders instructions. This is is done by entering a percentage or a value into the parameters of the robot. Over 40 parameters are at the traders disposal, and the trader can have total control to streamline the strategy to fit the desired outcome. The strategy can be setup to run just as a daily protection of the trading account or as a weekly protection. Any length of time that is suited for the trader can be setup. The length of the session depends on if the trader is only trading manual or with other robots, or a mixture of both. The knowledge of basic money management principles when setting up a strategy is an advantage. The more the trader educates himself on this subject, the better.

 

This is a step by step tutorial and by following it through the stages, it will come clear for the trader how to build a RMM strategy.

 

To start the setup of the RMM Robots parameters, it is recommended to start from the bottom of the robot for a better view of all the levels. It is a more logical approach then starting from the top. This is of course up to the trader, if he feels more comfortable with starting from the top, it is perfectly OK.

 

To explain the different Target Levels and Stop Loss Levels an illustration may come in place.
 
Imagine standing in front of a high story building with many different floors. You already know what floor you would like to get off at. That's where the party is and the rewards. Taking the elevator up you will arrive safely at your destination. The intention from your point of view is to take the ride up without any interference or hassle. What happens if you accidentally press the wrong button and you are on your way down to the basement department instead? That was not the desired destination and you need get off as soon as possible, you don't wish to continue the ride. What is the best solution?
The Stop button needs to be pressed!


Stop Loss Exit is the first parameter the trader has to decide on. How high of a risk is he willing to take when the account equity turns to the downside. It all depends on the traders risk tolerance and the style of trading. 3-4% on a daily basis is a medium setting. If he then trades with a 0.5%-1% risk of his account, per position and only one position open at the same time, it will be a sound money management protection. If several open position are used then the 0.5%-1% risk per position needs to be reduced accordingly.

 

Stop Loss Level 1-5 is set together with its associated Target Level 1-5. Based on the above daily strategy, a good setting would be to have the first Target Level above the break-even and its Stop Loss Level set below the break-even. The distance between the Target Levels and the Stop Loss Levels can be set differently between levels.

 

The setup with only Stop Loss Exit and Level 1.


Target Level 1   :          1         ( above break-even )

Stop Loss Level 1:    -1.25    ( below break-even )

Stop Loss Exit:          -3.25     ( below break-even )


The above setting would give the following result. When the account equity declines without reaching Target Level 1 the robot would stop out the session with a 3.25% loss. If on the other hand the account equity reaches Target Level 1, and then retraces to Stop Loss Level 1, the loss would amount to 1.25%.

 

The next parameters to set would be Target Level 2 and Stop Loss Level 2. In this case the Stop Loss Level 2 is placed slightly above break-even and Target Level 2 is set at 2% above break-even.


Target Level 2:             2         

Stop Loss Level 2 :     0.30    

Target Level 1:            1         

Stop Loss Level 1:    -1.25    

Stop Loss Exit:          -3.25
    
If the account equity reaches 2% above break-even and then retraces without reaching a higher target level, the session would result in a stop out with a profit (0.30%) slightly above break-even.

 

The next levels are set up as follows.


Target Level 5:             5        

Stop Loss Level 5 :     2

Target Level 4:             3.50         

Stop Loss Level 4 :     1

Target Level 3:             2.50       

Stop Loss Level 3:      1

 

The setup up to Target Level 5 and Stop Loss Level 5.


Target Level 5:             5         

Stop Loss Level 5 :     3

Target Level 4:             3.50         

Stop Loss Level 4 :     2

Target Level 3:             2.50        

Stop Loss Level 3:      1

Target Level 2:             2         

Stop Loss Level 2 :     0.30    

Target Level 1:             1         

Stop Loss Level 1:     -1.25    

Stop Loss Exit:           -3.25


If the account equity reaches Target Level 3, a 1% profit will be achieved by the associated Stop Loss Level 3, if retracing. Target  Level 4, 2% if retracing and Target level 5, 3% if retracing.

 

Above the 5th level a trailing of the account equity can be setup. It's not mandatory to use the trailing above the 5th level. It can also be set between levels or be set anywhere above break-even. It does not need to be used at all if no trailing is a necessity.


There are 2 parameters used for this, Target Trail and Trail Distance.


Target Trail:         7

Trail Distance:    0.75


When the equity reaches 7% it will set a trigger to trail with the equity. Trail Distance sets the distance of the trail, 0.75%.
If the equity reaches 7.75% a new stop loss will be in place at 7%. If it then retraces it will stop out the session by Trail Distance (7%).

 

The setup is with Target Trail enabled. If the account equity reaches the Target Trail a profit of at least 6.25% is expected.


Target Trail:                  7

Trail Distance:              0.75

Target Level 5:             5         

Stop Loss Level 5 :     3

Target Level 4:             3.50         

Stop Loss Level 4 :     2

Target Level 3:             2.50        

Stop Loss Level 3:      1

Target Level 2:             2         

Stop Loss Level 2 :     0.30    

Target Level 1:             1         

Stop Loss Level 1:     -1.25    

Stop Loss Exit:           -3.25


Target Exit parameter, is the last level. It will stop out the session to a handsome profit if reached.
Around 10% is expected.

 

Target Exit: 10

 

The strategy is almost done. All that is needed now, is to enter the Account Balance parameter and additional
parameters to make the strategy complete.


Setup of the strategy.


Target Exit:                  10

Target Trailing:            7

Trail Distance:             0.75

Target Level 5:             5         

Stop Loss Level 5 :     3

Target Level 4:             3.50         

Stop Loss Level 4 :     2

Target Level 3:             2.50          

Stop Loss Level 3:      1

Target Level 2:             2         

Stop Loss Level 2 :     0.30    

Target Level 1:             1         

Stop Loss Level 1:     -1.25    

Stop Loss Exit:           -3.25

 

 

When being stopped out by the RMM Robot there will be a difference between the stop out level percentage entered in the parameters setup and the finalized stop out percentage. The difference is explained by slippage being charged and latency towards the brokerage server. To offset this and to end up as close to the desired stop out percentage as possible, an extra part of a percentage can be included to make up for the difference.


Example 1: If the Stop Out Exit is -3.25%, an additional 0.05% added on (-3.20%) this will result in a finalized stop out, including slippage and latency at around -3.25%.


Example 2: If the Stop Loss Level 4 is 2%, then by adding on 0.05% to 2.05%, the finalized stop out will be around 2%.
This can very depending on the internet connection, latency to the broker and the slippage.


By observing the stop out percentage and the finalized stop out percentage one can get a close estimate of much is needed to be added to make up for the difference explained above. The parameter Latency-Slippage can also be used to address the above issue with latency and slippage towards the brokerage server.

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The basic strategy setup is finalized.
 
This is the outcome seen in the RMM Robot.
Over 30 additional parameters can be entered to further more give the trader a total control of his risk & money management environment.

 If a red color warning appears in the parameter setup, when entering a percentage or a value it indicates it is set either to low, or to high. By changing it to an acceptable entrance it will change to a gray colored background.

 warning

 

 

 

 

The trader will quickly get accustomed to the parameters setup. Setting it up will take no time at all. What will take some time is the preparation of the strategy and the work involving testing; the expectation of the strategy and the outcome of the strategy.

 

 

Testing before going live on a demo account is highly recommended. The above example of a strategy is just a sample, and it can be altered in many ways. It is based on a rather strict protection of the trading account with a 0.50-1% risk per position, and only one open position at the same time scenario. If several opened positions are used then the 0.50%-1% risk per position needs to be reduced accordingly.

 

 

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Easy, quick setup

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Over 40 parameters!

9 To streamline the strategy and protect the trading account.

Intuitive setup of parameters!

Lock in profits

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On multiple levels!

4

Multiple target levels keeping profit.

Lock in the winnings.

Secure accumulated gain!

Guard the account

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Against draw downs!

1

Minimize risk with

multiple stop loss protection.

 Trade safe and protected!

Custom strategies

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Build a strategy!

6

Customize the strategy.Personilize

it, and build.

Unlimited possibilities!

 RMM Screen

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30 trading indicators!

8 Control the trading session. Be in charge of the out come.

 Trade with confidence!