The SENTINEL line from NinjatōTrading includes expert advisors that share the SENTINEL Risk & Reward Module. Advisors like SENTINEL Heikin-Ashi differ in their entry strategies but share the module’s risk management tools, such as position sizing and various options for adjusting stop loss and take profit. This document outlines its parameters to optimize settings during backtesting.
VOLUME, RISK and SPREAD
This section focuses on position sizing management. It also explains the spread filter.
Risk Management
This field provides three options for risk management:
- Risk % of equity
- Risk % of balance
- Fixed volume
With Fixed volume, a fixed quantity is set. This volume will be the same for all entries of the Expert Advisor, except when the available margin is insufficient; in that case, the volume is reduced to fit the available margin.
With Risk % of equity, the risk per trade is defined as a percentage of the account’s equity. SENTINEL calculates the position size based on this amount and the initial stop loss distance. The position size will be inversely proportional to the stop loss distance. If the available margin is insufficient, the volume is reduced to match it. SENTINEL can perform these calculations for any forex pair.
Risk % of balance only differs from Risk % of equity in that the amount at risk is calculated based on the account balance.
In MetaTrader, for forex, the Volume field refers to an amount of the base currency in the pair, which is quoted in the quote currency. On the other hand, both equity and balance are denominated in the account currency. Depending on whether the account currency matches the base currency, the quote currency, or neither, SENTINEL performs the corresponding calculations.
Risk Value or Fixed Volume
This field is related to Risk Management. Its value represents the percentage of risk on equity or balance, or a fixed volume if Fixed volume is selected. It accepts decimal values.
Acceptable spread (pts)
It accepts an integer in points. SENTINEL will not consider entering the market if the spread exceeds this value.
Points are the smallest unit of variation in an asset’s value. Do not confuse them with pips.
The spread is the difference between the ask price (buy) and the bid price (sell) of an asset.
STOP LOSS and TRAILING STOP
This section details the stop loss and trailing stop configuration in SENTINEL strategies.
Stop Loss Type
This field provides one option for handling stop loss and trailing stop:
- Candlestick Retrospective
The trailing stop moves in favor of the price, never against it.
With Candlestick Retrospective, the lowest (for buys) or the highest (for sells) price of a given number of bars is used to set both the stop loss and trailing stop. The ATR Coefficient field add an extra distance based on volatility.
Include Trailing Stop
Determines whether trailing stop is activated. It does not affect the initial stop loss.
ATR Period
The ATR period used in Candlestick Retrospective option of the Stop Loss Type field.
ATR Coefficient
Multiplier of the ATR value. Applies to Candlestick Retrospective option of Stop Loss Type.
Candlestick Lookback
Bars back to find lows (for buys) or highs (for sells) in the Candlestick Retrospective option.
Display Stop Loss
Draws the stop loss levels on each bar of the chart. In backtesting, it only works with visual mode with the display of charts, indicators, and trades enabled.
Color
Color of the stop loss levels when Display Stop Loss is set to true.
TAKE PROFIT and TRAILING TAKE PROFIT
This section details the configuration of take profit and its trailing in SENTINEL strategies.
Take Profit Type
This field provides two options for handling take profit and its trailing:
- Based on Stop Loss
- Fixed Distance
With Based on Stop Loss, the take profit levels are calculated as a multiple of the stop loss distance to the price. This multiple is set in the Coefficient Over Stop Loss field. It works even if Include Trailing Stop is set to false.
With Fixed Distance, the take profit and its trailing are set according to the number of points specified in the Fixed Distance field.
Include Trailing Take Profit
Determines whether trailing is activated. It does not affect the initial take profit.
Coefficient Over Stop Loss
Multiplies the stop loss value and uses this distance to set take profit. Applies to the Based on Stop Loss option of the Take Profit Type field.
Fixed Distance (pts)
Number of points applied to the Fixed Distance option of the Take Profit Type field.
Display Take Profit
Draws the take profit levels on each bar of the chart. In backtesting, it only works with visual mode with the display of charts, indicators, and trades enabled.
Color
Color of the take profit levels when Display Take Profit is set to true.
The results obtained from using the software referenced in this guide are not guaranteed. Trading in financial markets involves significant risk and may not be suitable for all investors. The developer of this module is not responsible for any losses or damages resulting from its use. The developer does not guarantee ongoing support or updates. Use the software at your own risk.