11/13★ Occasionally I borrow the power of ChatGPT: Its 183rd [Important points when choosing an EA: Is there sufficient expected profit?]
FX automated trading, Reiwa’s double-E is.
This serialization has been written almost every day since last year.
We’ve probably kept it up for almost two years now!
If you read what I’ve written so far,
I’m confident you’ll move closer to better EA operation.
Also, since I’d like to take a short break,
I will continue posting with the help of ChatGPT.
Occasionally, I will post irregularly like before.
Key point when choosing an EA: Is there sufficient expected payoff?
When checking an EA’s backtest, we look for an upward curve, the recovery factor, and so on.
However, there is one more important item not to forget.
It is the “Expected Payoff.”
What is Expected Payoff?
Expected payoff is expressed by the following formula.
Expected Payoff = Net Profit ÷ Number of Trades
For example, if backtest net profit is 1,000,000 yen and the number of trades is 2,000,
then the expected payoff is 500 yen.
What the expected payoff implies
This value indicates“Will the spread cause a loss?”?
Spreads can widen in the morning or around major economic indicators.
In such cases, it is crucial whether the EA has enough margin to overcome the standard spread plus the extra burden.
The indicator to gauge this margin is the expected payoff.
How much margin is reassuring?
From my experience, you want at least about 2–3 pips worth of margin.
0.1 lot operation → 200–300 yen or more expected payoff
1 lot operation → 2,000–3,000 yen or more expected payoff
and so on
Having this level of expected payoff increases the probability that the EA can continue to win, even in unusual conditions with wide spreads.
(If spreads get too wide, entries will be restricted by the spread filter.)
Conclusion
Expected payoff is a simple formula of “Net Profit ÷ Trades,” but
it is, without a doubt, the most important metric for gauging an EA’s robustness.
Avoid normal-time spread losses
Be able to withstand unexpected spread widening
Deliver stable profits in the long term
To guarantee these three, it is essential to choose an EA with a sufficiently high expected payoff.
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【Flow from starting EA to intermediate level】
First, mastering EA installation is essential.
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MT4 EA (Expert Advisor) and indicator installation procedures
https://www.gogojungle.co.jp/post/1/8212
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※GoGoJungle video version
Even at first, not everything can be understood at once, and many may stumble.
I also stumbled many times early on, so don’t worry and take your time!
If you have questions, there is a “Contact form” you can use!
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■ GoGoJungle “Contact form”
https://www.gogojungle.co.jp/inquiry
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【How to choose an EA】
Now that you’re ready to operate an EA,
you may think, “I don’t know which EA is likely to win… I don’t want to lose…”.
So, Reiwa’s double-E has published the following articles to help you determine up to a certain extent in the “backtest.”
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■ How to find winning EAs from backtests
https://www.gogojungle.co.jp/finance/navi/series/1714
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Backtest periods are usually longer than forward periods, and
【How should EA risk management be done?!】
And no matter how excellent an EA seems,
FX collapses if risk management is neglected.
what should risk management be!?
The following article answers that.
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■ “How to calculate 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.
Those articles are,
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12/30★ Year-end and New Year SP!! EA fully explained course Part 3
https://www.gogojungle.co.jp/finance/navi/articles/80551
8/12 [Obon holiday special project!] 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 project!] Now you too can be an EA master! “Notes while operating EA”
https://www.gogojungle.co.jp/finance/navi/articles/73797
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So,
the read is substantial and quite important,
even if you don’t understand it right away, be sure to go through it!
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【Reiwa’s double-E EA listing】
https://www.gogojungle.co.jp/users/112481/products
Specifically, categorized Reiwa’s double-E EAs by genre
https://www.gogojungle.co.jp/finance/navi/articles/67162
（Portfolio building requires genre diversification）
【Reiwa’s double-E series articles】
■ EA Beginner Course
https://www.gogojungle.co.jp/finance/navi/series/1700
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“About calculating EA risk management”
https://www.gogojungle.co.jp/finance/navi/articles/64703
https://www.gogojungle.co.jp/finance/navi/articles/65978
Simple tips to spot fraudulent materials (in the case of EAs)
https://www.gogojungle.co.jp/finance/navi/articles/64738
https://www.gogojungle.co.jp/finance/navi/articles/65619
■ How to find winning EAs from backtestshttps://www.gogojungle.co.jp/finance/navi/series/1714
■ No sugarcoating! GoGoJungle raises questions!
https://www.gogojungle.co.jp/finance/navi/series/1701
https://www.gogojungle.co.jp/finance/navi/articles/64723
■ Reiwa’s double-E “Push-down buying / pullback selling” now公開！
https://www.gogojungle.co.jp/finance/navi/articles/65010
https://www.gogojungle.co.jp/finance/navi/series/610
【Reiwa’s double-E’s beliefs】
Develop EA with a solid approach,
and gain the trust of more people,
maintain a long-term WIN-WIN relationship,
aim to revitalize the EA market and raise literacy.
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