As I did my check-in on my present “favorite” drawdown, I saw this tall-down candle. I then glanced to the left to see my “Max DD:”. It stated 31.69%. The Dalio bot is promoted as a bot; you can expect a max drawdown of 15%. Due to some of my sins, I adjusted the bot to allow a max drawdown of 50%. I am so glad I did! I can only imagine bad things happening if I hadn’t.

With the need for an answer, I was glad I found this explanation within one of the bot communities:

When the market closes on Friday, the spreads widen incredibly. This is due to low volatility and liquidity in the market, which can make it look like your equity is much higher than it actually is.

Unfortunately, at times like this, the algorithm can’t close positions because the lack of liquidity in the market can result in high slippages, and therefore, it’s not a true representation of your actual equity.

This can happen when the market rollover occurs every day (around 5 p.m. ET) and especially when the market closes for the weekend at 5 p.m. ET on Fridays.

With that knowledge safely tucked away, I will likely keep my “Stop Losses” slightly higher than the recommendations to account for this slippage.