One parameter we should always look out for when choosing a Robot to trade Forex is its Drawdown. The Leo EA is no exception. A common argument that surfaced against Leo’s trading method is that it tends to generate small wins, but could stand to have big losses!

This is because it has a take-profit level of 35 pips, while it can sometimes have a drawdown of 500 pips or more. Below, I will show you two different strategy tester reports using the Leo EA, with different initial_lot sizes, on two very important time periods.

For those of you unfamiliar with the Leo EA’s settings, initial_lot = min_lot, which determines the size of the first lot placed by EA, and hence your risk-reward ratio.

For example, through backtesting of the Leo EA in the period of the ’08 Sub-prime crisis with conservative settings showed a monthly return of 2.21%, and a maximum drawdown of 22.18%.

Leo EA Strategy Tester Report - '08 Subprime Crisis

2/1/08 – 4/2/09, 2.21% ROI, 22.18% max drawdown. Leo EA by LS Capital Singapore.

On the other hand, in comparatively peace time (but also under very volatile conditions on 4/1/13 where GBPUSD market slid 300-400 pips), the EA can also generate 4.09% in one month with a maximum drawdown of only 6.43%.

Leo EA Strategy Tester Report - Jan 2013

2/1/13 – 31/1/13, 4.09% ROI, 6.43% drawdown. Leo EA by LS Capital Singapore.

As you can see from above, an initial_lot of 0.02 can generate about 2% a month, while increasing it to 0.1 can generate about 5%. Depending on your own risk appetite, you can be in full control of your Leo EA to generate consistent profits of 2% a month AND UP!

I have been running some of my own backtests, and am thoroughly excited to have found settings that generate 5% a month, with drawdowns of only 4%-9%! I will be running more backtests over the next 4 weeks, and hope to optimize my current settings with the Leo EA.

If you would like to get a closer look at the above reports, visit LS Capital’s Website under the ‘EA/Script’ section. And you can check out my LIVE trades here, powered by MT4i.

Good luck trading!