1) I agree with Geektrader that if you place an "external" instruction to limit your trade order/numbers, you have to be prepared that you are entering into "uncharted" territory, whereby you can't rely on your backtest to predict what the outcome will be like. Nevertheless, that should not stop one from trying cos you may be surprised that such intervention may turned out to be a better option. Likewise, I always add an external profit trailing EA to handle all the opened trades and hence, I can't refer to FSB backtest (since the backtest result can't take into account of my external EA interference, nevertheless, I get far better trade performance and hence, I'm willing to go "blind" (without any backtest results to refer to). Assurance (having a backtest results to rely on) vs Performance (improving your trade results). As for me, I'll do whatever external interference I could, if I know it will improve my trade results. Cos I never let (the lack of) backtest dependence, limit the way I trade. Ultimately, it's the trade results I'm looking for. Whichever method that can lead to better results, I'll take that path.
2) We use different method to build our portfolio. a) Portfolio with diverse EA/systems/strategies b) Portfolio with similar strategies c) We are clueless of how these strategies work, since we don't build it ourselves (via Generation, etc)
2a) Portfolio with diverse EA. In order to put together a portfolio of diverse EA, I'm assuming that one has to know the trading behaviour of the EA in order to know which EA to select for the portfolio. If we are well versed of how our strategies worked together, then adding external "intervention" such as max lot size allowed to be traded etc will deviate the Portfolio overall performance (from it's backttest "predicted" outcome). In this case, if we do know how our strategies work, we would also have a better idea whether it is beneficial to have external trade limits or not.
2b) If portfolio are made up of very similar strategies and since we don't know which will trade 1st etc. Then using a trade limit, max number of allowed positions or max number of lot size limit would be a good idea. Eg, I'm prepared to risk certain percentage of my account and hence I limit the max number of lot size allowed to be trade and whichever (more responsive) EA open strategies 1st, I'll trade. It's like 1st come, 1st serve.
I do sometimes use this method because I do want to control my level of risk factor and since I don't know whether all my EA will trade or only some of my EA will trade. Using a max lot size being trade will give me a peace of mind.
I normally use FxBlue copy trade and hence, this copier has many features and one of the features allow me to limit the max number of lot size being trade or stop trading when account reached certain level etc
2c) For those who generate EA, we would most likely be clueless of how and when our strategies will trade, whether frequently or once in a blue moon. Hence, max lot size limit may be a safe way to trade, bearing in mind that any external interference we use, will deviate from the backtest results. Hence, it's a case of Peace of Mind vs relying on having a Backtest "assurance", if this is important to you. I understand, some users are very systematic with their EA development and won't deviate anything from their backtest in order to ensure a workflow. Hence, it all boils down to one's approach in EA development, there is no right or wrong. It's a matter of personal preference, we do what works best for us.
In conclusion, it is important that we do know how our portfolio performance in terms of it's trading behaviour, what's the max number of opened positions overall, what's the max DD, etc before we ever go live.
As for me, I tried different methods 1) use max lot size allowed and 2) like what Geektrader suggested (1. Limit the number of strategies, calculate what's the potential max DD of the portfolio and adjust according to your risk appetite or 2. Increase your capital, thus increase your "allowable" Max DD, 3. Use percent lot sizing so that your trade are automatically adjusted according to your capital.