9/26★Sometimes I borrow the power of ChatGPT, Episode 166 [Important points when choosing EA: Is there sufficient expected profit?]
FX Auto Trading, the Double-Eye of Reiwa EA developer.
This series has been written with the goal of posting every day since last year.
Probably it has continued for about a year and a half now!
If you read what has been written so far,
you will surely move closer to better EA operation, I humbly believe.
And, since I want to take a short break,
I will continue posting by borrowing the power of ChatGPT.
From time to time, I will post irregularly as before.
Important points when choosing an EA: Is there enough expected payoff?
When checking EA backtests, we look for upward trends, recovery factors, and so on.
However, there is one more important item not to forget.
That is“Expected Payoff”.
What is Expected Payoff?
Expected Payoff is expressed by the following formula.
Expected Payoff = Net Profit ÷ Number of Trades
For example, if the backtest net profit is 1,000,000 yen and the number of trades is 2,000,
then the expected payoff is 500 yen (about 5 dollars).
What the expected payoff implies
This value indicates“Will the spread cause a loss?”.
The previously mentioned spread setting is based on “normal times.”
But in reality, spreads can widen around the morning or around major economic indicators.
In such cases, it becomes important whether the EA has enough margin to overcome the extra burden of “normal-time spreads + additional load.”
The indicator to judge this margin is the expected payoff.
How much margin is enough for peace of mind?
From my experience, a margin equivalent to 2–3 pips or more is desirable.
For example:
For 0.1 lot trading → 200–300 yen or more of expected payoff
For 1 lot trading → 2000–3000 yen or more of expected payoff
With this level of expected payoff, even in special situations where spreads widen, the EA has a higher chance of steadily winning.
Conclusion
Expected payoff is a simple formula of “net profit ÷ number of trades,” but
in reality it is the most important metric to measure the robustness of an EA.
Avoid loss from normal-spread
Be able to withstand unexpected spread widening
Be able to profit steadily in the long term
To guarantee these three, it is essential to choose an EA with sufficient expected payoff.
━━━━━━━━━━━━━━━
【Flow from starting an EA to intermediate level】
First, it is important to master the installation of an EA.
--------------------------------------------------------------------
MT4 EA (Expert Advisor) and Indicator installation procedure
https://www.gogojungle.co.jp/post/1/8212
--------------------------------------------------------------------
※ GoGoJungle video version ※
Even at first, not everything can be understood at once, and many people may stumble.
I also stumbled many times at the beginning, so take it easy and you’ll be fine!
If you have questions, there is a contact form, so please use it!
https://www.gogojungle.co.jp/inquiry
【How to choose an EA】
Now that you think you can operate an EA,
you might be wondering, “I don’t know which EA looks profitable… I don’t want to lose…”
So, in Reiwa’s Double-Eye,
we have serialized articles to determine the goodness or badness to some extent via the backtest.
--------------------------------
https://www.gogojungle.co.jp/finance/navi/series/1714
----------------------------------
the backing is backtesting.
Usually the backtest period is longer than the forward period,
and whether you are winning in forward tests can be inferred to some extent by mastering backtest evaluation methods.
【How should EA risk management be done?!】
And no matter how excellent an EA you obtain,
if you neglect risk management, FX will collapse.
Therefore in the case of EA, how to manage risk?!
This is answered in the following article.
----------------------------------
■ About “How to calculate EA risk management”
https://www.gogojungle.co.jp/finance/navi/articles/64703
----------------------------------
【EA operation mindset is also important】
And, to sustain EA operation for a long time, the “EA operation mindset” is also important.
About these articles,
----------------------------------
12/30★ Year-end and New Year SP!! A Complete EA Course Part 3
https://www.gogojungle.co.jp/finance/navi/articles/80551
8/12 [Obon Holiday Special Plan!] Now you too can be an EA Master! “Mindset for Improving EA Operation”
https://www.gogojungle.co.jp/finance/navi/articles/72829
8/17 [Obon Holiday Special Plan!] Now you too can be an EA Master! “Notes during EA Operation”
https://www.gogojungle.co.jp/finance/navi/articles/73797
----------------------------------
So,
the reading is substantial and quite important content,
so even if you can’t understand it right away, be sure to skim through it!
━━━━━━━━━━━━━━━
【Reiwa’s Double-Eye EA Listing】
https://www.gogojungle.co.jp/users/112481/products
Specifically categorized EA by genre for Reiwa’s Double-Eye
https://www.gogojungle.co.jp/finance/navi/articles/67162
(Portfolio diversification requires genre diversification)
━━━━━━━━━━━━━━━
【Reiwa’s Double-Eye serialized articles】
■ EA Beginner Course
https://www.gogojungle.co.jp/finance/navi/series/1700
“About how to calculate EA risk management”
https://www.gogojungle.co.jp/finance/navi/articles/64703
https://www.gogojungle.co.jp/finance/navi/articles/65978
https://www.gogojungle.co.jp/finance/navi/articles/64738
https://www.gogojungle.co.jp/finance/navi/articles/65619
■ How to find profitable EAs from backtests
https://www.gogojungle.co.jp/finance/navi/series/1714
https://www.gogojungle.co.jp/finance/navi/series/1701
https://www.gogojungle.co.jp/finance/navi/articles/64723
■ Reiwa’s Double-Eye announces “Buy the dips - sell the rallies” logic!!
https://www.gogojungle.co.jp/finance/navi/articles/65010
https://www.gogojungle.co.jp/finance/navi/series/610
━━━━━━━━━━━━━━━
【Reiwa’s Double-Eye's Philosophy】
Develop EA through proper methods,
serve a wider audience,
maintain a long-term WIN-WIN relationship,
aim to revitalize the EA market and raise literacy.
━━━━━━━━━━━━━━━
