Is there a "Holy Grail EA" that reliably earns stable profits with fully automated trading?

In the world of FX automated trading, everyone longs for the keyword “Holy Grail EA.”

Is there really an EA that prospers both on backtests and forwards, a dream EA that continuously grows your capital with an upward curve?
Today, from the perspective of a developer of EAs who also runs their own EAs with their own funds, I will consider this theme.

■What is the “Holy Grail EA”?

For the operator, a Holy Grail EA is “a perfect EA that consistently makes profits no matter the market.”
It’s the ideal where the trader does nothing and the EA automatically enters and exits trades, increasing assets year-round without fail.
Even if drawdowns occur, they are very small, and even when losses appear, they quickly turn into gains to dispel anxiety.
If such an EA exists, anyone would want to operate it, right?

But in reality, markets are always changing.
World economic news, interest rate policies, wars, unexpected employment data—countless factors shift trends and break ranges.

■When conditions align, it may look like a “Holy Grail”

Nonetheless, there are periods when a Holy Grail EA exists under certain conditions or timeframes.
For example, in cases like the following:

• Using a trend-following EA where 80% of the market moved up or down in trends
• Using trap-retry/ grid-type EAs where prices moved back and forth within a set range
• Using a range-market specialized EA where volatility was low and prices remained within a fixed range
  

In such times when the EA logic and market environment align,
any EA can momentarily resemble a “Holy Grail.”
I believe this state can continue for months, or even years.
If you can deploy an EA that fits such a market, you can expect substantial gains.

■No one can read the future market

The problem is there’s no guarantee that these conditions will last forever.
Even if a trend-following EA is performing well, a sudden shift to a range market can cause losses.
Conversely, even if a range EA is doing well, a new trend could bring stop-loss after stop-loss.

When an EA temporarily goes negative, most people become anxious.
They think, “This is it,” “This EA was a flop,” or “There must be something better,”
and start looking for a new EA—the so-called Holy Grail search loop.

Indeed, there are bad EAs as well.
But they may simply be looking at short-term performance.
An EA that maintains long-term profits will inevitably have losing periods in the short term.
Even if it looks profitable in hindsight over the long term, short-term negative phases are natural.
To calmly assess an EA’s performance, you need to observe backtests and forward testing over multiple years.

■ Even Holy Grail EAs don’t look like a “Holy Grail” in real operation

Even EAs with 10+ years of upward-sloping backtests and stable forward profits do not look like a “Holy Grail” in real operation,
because capital fluctuates up and down in real operation, making it hard to see as a Holy Grail.

This is because human psychology reacts strongly to losses and unrealized losses.
Even the best long-term EA can be judged as poor if you look only at short-term losses.
If the operator’s resolve wavers and they stop, the afterward growth of capital will be lost as well.

■ If you truly want stable operation

If you aim for truly stable operation, it is practical to focus on these three points.

• Operate with funds you can afford to lose
• Design funding that won’t be shaken even if a drawdown of twice the maximum drawdown occurs
• Choose an EA that consistently performs well in both backtests and forward tests

It’s tempting to search for the perfect “Holy Grail EA”—the one that never shows a short-term loss and keeps increasing funds.
But,“Even Holy Grail-class EAs don’t look like Holy Grails in real operation”, and it’s important to keep this in mind,
and to refine the ability to identify EAs that win on average over the long term, which will lead to steadier capital growth.

That’s about all I wanted to write today.