[Episode 3] Shoukinryuu Recovery Factor 10 promises to investors
When you first glance at numbers in EA selection, you usually see "net profit" or "win rate." Advertisements like "over 10 million yen net profit in backtests" or "win rate over 95%" are indeed common when browsing investment guides.
However, from the perspective of someone who develops EAs, you cannot truly gauge an EA's capability by net profit and win rate alone. Net profit can be altered by the initial margin settings, and high-win-rate EAs tend to be biased toward averaging out large single losses through averaging-down strategies.
In Shin Kinryu’s backtests (2015–2026, about 11 years), what I paid most attention to wasRecovery Factor (RF)RF 9.95 — what this number means and why it is more reliable than Profit Factor (PF) will be explained with concrete formulas and industry comparisons.
The formula for Recovery Factor (RF) is simple.
In Shin Kinryu’s case, 2,507,755 yen net profit ÷ 252,302 yen max DD = RF 9.95. It indicates how many times the peak (profit) is built up against the deepest valley (loss).
The higher the RF, the more profit is generated while taking the same risk. Conversely,EA with large max DD but little profit has a low RF— in other words, it is not commensurate with the risk.
PF (Profit Factor) is calculated as "total profit ÷ total loss." If PF is 2.0, it means profits have been twice the losses. This is an important metric, but it has one weakness.
PF only looks at the efficiency of profit and loss. For example, even if there is a deep valley where 50% of the margin is lost at some point, PF can still be high if profits later emerge. But for a trader, whether they can endure that valley is the issue.
RF directly evaluates "how much profit is made relative to the maximum drawdown." An EA with high RF is one that has generated substantial net profit with a shallow valley. In other words,an EA that a trader can run to the end both psychologically and financially.
When examining RF of gold-type EAs sold on GoGoJungle, trends emerge.
Typically, RF for gold EAs is around 1–2. This means profits are roughly the same as drawdown or at most twice the drawdown. EAs considered "good" usually have RF around 3–5, which places them in the top 20%.
Shin Kinryu’s RF 9.95 indicates it has accumulated profits roughly 10 times the maximum drawdown over 11 years. You can compare that while enduring the same risk, achieving 5–10 times the results of a typical EA.
High-RF EAs share a common structure: they simultaneously meet two conditions—maximize net profit while minimize maximum drawdown. Here is how Shin Kinryu achieves this.
In particular, the ATR dynamic averaging is highly effective; in high-volatility markets, it automatically widens the averaging gap to prevent continuous entries from expanding unrealized losses. This is the main reason the maximum drawdown is kept around 12%.
At the same time, the logic to take profit immediately when the total position net profit turns positive ensures profits are realized reliably. It structurally prevents the pattern of holding on for the next dip.
From the trader’s perspective, the practical meaning of high RF is considered.
If you operate for 11 years with the same drawdown risk, RF differences significantly affect the final asset. An EA with RF2 might reach around 2,000,000 yen, while an RF10 EA could approach 4,000,000 yen.
This is why RF is considered the most important metric for long-term asset formation. Short-term win rates or net profit figures may change with market conditions, but RF measures the fundamental ability to convert risk into profit, demonstrating reliability over a long time horizon.
- RF = Net Profit ÷ Maximum Drawdown. Indicates how many times the profit was built up with the same risk
- PF only looks at profit/loss efficiency; RF also evaluates "depth of drawdown"
- Typical RF for gold EAs is 1–2. RF 3–5 places in the top 20% as a good level
- Shin Kinryu RF 9.95 proves it has accumulated about 10x the maximum drawdown in 11 years
- Three structures—ATR dynamic averaging, all-profit closeout, and news filter—support RF
- In long-term asset formation, the higher the RF, the greater the final asset under the same risk
※This article is provided for informational purposes and is not investment solicitation. The operating results published here are historical performances and do not guarantee future profits. FX/CFD trading involves risk. Please make investment decisions at your own responsibility.
