Cooldown after a loss in the EA, and why signals clustered right after stops

[Fairman]

Cooldown after a loss in the EA, and why signals clustered right after stops

looking at my EA's trade log, I noticed something. After a stop loss, the next signal often came within a few minutes, and those trades did noticeably worse than the average. The conditions that stopped me out were still there, and the EA just fired again.

I added a cooldown. After a loss, the EA waits a set time before it can open another trade on that symbol. Not a long time, about as long as a typical setup takes to develop. I also required that price make a new structural development, like a new swing or a close beyond a level, before the same type of signal could trigger again.

Results in the tester improved a bit, with a lower drawdown, and the average trade quality went up. The number of trades went down, which I was happy about because costs are a big deal for scalping.

I tuned the cooldown a little, but I didn't search for the best number. I picked something that matched what I'd do manually, and checked that nearby values behaved the same way.

[Fairman]

Requiring a new structural development before the next signal was the bigger improvement for me, more than the time delay alone. With only a timer, the EA would wait, then fire again into exactly the same messy conditions. Once I made it wait for fresh structure, like a fresh swing point or a candle closing past a level, the repeat signals mostly disappeared. The timer is still there as a floor, but the structure rule is what actually filters the junk. It also made the logic easier to explain to myself, which helps when I am reviewing the trade log.

[Fairman]

Worth checking if the cooldown should be per symbol or for the whole account. I started per symbol, then realised that on a dollar news spike several pairs stopped me out at the same time and then all fired again together. Now I also have an account level pause after two losses in a short window. It reduces the clustering a lot. Make sure the cooldown timer survives a restart too, otherwise a restart right after a loss quietly removes the cooldown.