You can choose to run Synergy V4 using the default settings. All the statistical analysis presented on this EA is based on these default recommended parameters.

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Max_Allocation_Per_Trade=10 is considered to be medium risk level. Most traders would find this risk level suitable when they are looking for gains between 30 to 50% per year. The average of annual gain over 13 year period is about 38%. The average drawdown may be expected to be about between 10 to 15% (Average of all DD over 13 year period was about 10%). Maximum historical DD in the 12 year test was seen to be close to 22%.

The monte carlo worst case simulation DD at 95% confidence is estimated at 27% (absolute worst seen at 43%). This means that we can say with 95% confidence that the maximum drawdown will be below 27% when the Max_Allocation is set to 10.

Please not that the EA will calculate the trade size based on account balance. For US$ 10000, the EA will trade with lot size of 0.1 per position. Synergy EA can take upto 4 positions (in same direction). For US$ 5000, the EA will trade with lot size of 0.05 per position. For US$ 1000, the EA will trade with lot size of 0.01 per position. If your account size is less than $10000 please ensure that your broker account supports micro lots (0.01 minimum and increments 0.01). Money Management will not be effective on smaller accounts if the broker account does support microlots.

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Using Fixed Lots will disable money management. The EA will trade only with the lot size specified. This is not the recommended way to trade Synergy V4. But some professional trader may choose to use fixed lot and manage trade size manually based on their experience.

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Max_Allocation_Per_Trade=5 is considered to be very low risk level. Traders with low risk appetite would find this risk level suitable when they are looking for gains between 15 to 30% per year. The average of annual gain over 13 year period is about 18%. The average drawdown may be expected to be about between 5 to 10% (Average of all DD over 13 year period was about 5%). Maximum historical DD in the 12 year test was seen to be close to 12%.

The monte carlo worst case simulation DD at 95% confidence is estimated at 15% (absolute worst seen at 24%). This means that we can say with 95% confidence that the maximum drawdown will be below 15% when the Max_Allocation is set to 5.

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Max_Allocation_Per_Trade=8 is considered to be medium risk level. Most traders would find this risk level suitable when they are looking for gains between 25 to 40% per year. The average of annual gain over 13 year period is about 30%. The average drawdown may be expected to be about between 8 to 15% (Average of all DD over 13 year period was about 8%). Maximum historical DD in the 12 year test was seen to be close to 20%.

The monte carlo worst case simulation DD at 95% confidence is estimated at 20% (absolute worst seen at 33%). This means that we can say with 95% confidence that the maximum drawdown will be below 20% when the Max_Allocation is set to 8.

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Max_Allocation_Per_Trade=15 is considered to be very high risk level and not recommended for trading live. While the potential gains could be between 50 to 100% per year, the risk of drawdown will be higher. The average of annual gain over 13 year period is about 50%. Traders should not use higher allocation like 15 unless they fully understand the effects of drawdowns and the importance of running the EA without interruption in order for the account to recover.

This test is relevant to traders running the EA on accounts smaller than $1000. The EA will trade with the minimum lot size permitted by the broker which would be 0.01 in most cases. If the account balance is US$ 750, trading the EA with any allocation level will default the lot size the the minimum allowed (0.01 in most cases). This would also make the money management ineffective. The risk level on this $750 account would be similar to using Max_Allocation of 15.

The average drawdown may be expected to be about 20%. Maximum historical DD in the 13 year test was seen to be close to 35%.

The monte carlo worst case simulation DD is estimated at over 50%.

If the account size is lower, the risk on the account would be much higher. It is highly recommended to use cent or nano accounts if you are trading with account sizes smaller than US$ 1000. This will enable the EA to operate with proper money management and risk levels.

One of the main reasons for user of the system to get disillusioned within a short time is because of wrong expectation. The 5 year or 12 year backtests project the long term profitability of the EA. Although the tests show that the DD and losses are normal part of the strategy, the user in most cases are not able to handle similar drawdowns in live trading.

The figure below illustrates the above issue:

The above figure shows how our brain ignores the small kinks in the 13 year back test and it tends to focus on the equity move upwards. The net gain in millions usually makes the drawdown of 20% seem negligible. But when the same set of trades is seen in the year wise test, the drawdown appears as you would really be seeing it in real live trading.

As can be seen it would be more practical to observe the trades on a year by year basis to understand and develop faith in the system. This will enable traders to handle normal drawdowns in live trading without fear and uncertainty.

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