Once in a while I borrow ChatGPT's power: its 172nd installment【In EA operation, the most important thing is 'risk management'】
FX Auto Trading, the developer of EA Reiwa no Double-E.
This series has been written with the aim of posting every day since last year.
I think I’ve continued for about a year and a half now!
If you read what I’ve written so far,
you’ll surely be closer to better EA operation, I believe.
Also, there are times when I’d like to take a short break,
so with the help of ChatGPT I plan to continue posting here.
Occasionally, I will post irregularly, as before.
What’s most important in EA operation is “risk management”
If you’re asked, “Is FX gambling?”, how would you answer?
Most people would probably say, “Yes, it’s gambling.”
Indeed, many traders operate with a gambling mindset.
However, from a professional standpoint, that answer is “NO.”
What professionals consistently regard as most important
Both discretionary professional traders and EA traders share the same core priority: “risk management.”
Before trading methods or logic, you must first clearly decide how much risk you’re willing to tolerate.
To put it like medicine,
drugs only show effects when used properly.
Conversely, too much of something beneficial can be harmful.
In fact, it’s said that even water can be lethal in excessive amounts.
EA is the same: to maximize its original performance, you must maintain a balance between capital and lot size.
Ignoring this and placing large lots can prevent the expected profits and, in the worst case, lead to capital depletion or bankruptcy.
The required “dosage and administration” for EA
In other words, EA has a “correct usage” just like medicine.
That is risk management, which involves identifying the capital and lot-size deadlines in operation.
I have previously suffered losses when taking too much risk.
That is why I now rigorously apply evidence-based capital management calculations as a professional.
Summary
An EA is not enough just by being well-chosen.
No matter how excellent an EA is, if you mismanage risk, its true potential won’t be realized.
Next time, I’ll clearly explain my approach to “evidence-based risk management calculations” with numbers.
I hope EA traders find it helpful!
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【From Starting EA to Intermediate: Flow Overview】
First, mastering how to install the EA is important.
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MT4 EA (Expert Advisor) and Indicator installation procedure
https://www.gogojungle.co.jp/post/1/8212
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※GoGoJungle video version※
Even at the start, not everything can be understood at once, and some people certainly struggle.
I also stumbled many times at first, so don’t rush—you’ll be fine!
If you don’t understand something, use the “inquiry form”!
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https://www.gogojungle.co.jp/inquiry
【How to choose EA】
Now that you’re ready to operate an EA,
you may wonder, “I can’t tell which EA will win… I don’t want to lose…”
So Reiwa no Double-Ee has published the following to help gauge quality by backtesting.
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■ How to find a winning EA from backtests
https://www.gogojungle.co.jp/finance/navi/series/1714
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Backtest periods are usually longer than forward periods, and
whether you happen to win in the forward test can be partly understood by mastering backtest evaluation methods.
【How should EA risk management be?】
And no matter how excellent an EA you obtain,
if you neglect risk management, FX will fail you.
Therefore in EA, how should risk management be done?
An article answering this is below.
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■ About calculating EA risk management
https://www.gogojungle.co.jp/finance/navi/articles/64703
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【EA Operation Mindset is also important】
And, to sustain EA operation long-term, the EA operation mindset is also important.
For those articles,
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12/30★ Year-end and New Year SP!! EA Full Understanding Course Part 3
https://www.gogojungle.co.jp/finance/navi/articles/80551
8/12 [Obon Holiday Special]! This will make you an EA Master! “Mindset for Improving EA Operation”
https://www.gogojungle.co.jp/finance/navi/articles/72829
8/17 [Obon Holiday Special]! This will make you an EA Master! “Cautions during EA operation”
https://www.gogojungle.co.jp/finance/navi/articles/73797
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That said,
the content is quite substantial and important,
so even if you don’t understand it immediately, please make sure to review it!
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https://www.gogojungle.co.jp/users/112481/products
Specifically categorized EA from Reiwa no Double-Ee
https://www.gogojungle.co.jp/finance/navi/articles/67162
(Portfolio construction requires diversification by category)
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【Series articles from Reiwa no Double-Ee】
■ EA Beginner Course
https://www.gogojungle.co.jp/finance/navi/series/1700
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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 a winning EA 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 no Double-E “Push Buying/Return Selling Logic”公開解禁!!
https://www.gogojungle.co.jp/finance/navi/articles/65010
https://www.gogojungle.co.jp/finance/navi/series/610
【Reiwa no Double-E’s Beliefs】
Develop EA using a proper approach,
have more people patronize it,
and maintain a long-term WIN-WIN relationship while
aiming to revitalize the EA market and raise literacy.
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