Why Fixed Averaging (Nampin) Breaks Down
— The Mechanism by Which ATR Dynamic Averaging Survives Sudden Market Moves

In the previous article we introduced three mechanisms underpinning the Recovery Factor (RF) 9.95. Among them we touched on “ATR Dynamic Averaging,” and this time I want to extract only this logic and explain it a little more carefully.

The word “averaging” (nampin) carries a somewhat scary image. In fact, stories like “I suffered large losses with a Nam PIN EA are not rare.” However, the problem is not the averaging itself, but“Fixed-interval averaging”.

Shoukinryu uses ATR-based dynamic numbering (ATR Dynamic Nampin) that automatically adjusts the averaging width according to market volatility. Why is this safer than fixed averaging? I will explain with numbers and diagrams.

Fixed nampin is where the intervals for additional entries are fixed in advance, such as “add to positions every 50 pips.” It works in calm markets, but in abrupt fluctuations the following problems arise.

Gold (XAUUSD) can move more than 100 pips within minutes due to major announcements or geopolitical news. If the fixed nampin width is 50 pips, 4–5 positions can pile up quickly during a 30-minute drop. The unrealized loss at that moment expands in an instant.

The problem is,“The market tends to accumulate more positions when volatility is high”, which is an ironic structure where you hold the largest position in moments when you should not be taking on risk.

ATR (Average True Range) is a technical indicator that shows the average range of price movement over a set period. Alongside RSI and MACD, it is widely used to express how violently the market is moving, in pip units.

In calm markets ATR is small (around 30 pips), while after news the ATR grows (often above 120 pips). Shoukinryu constantly monitors ATR and recalculates nampin intervals in real time.

Shoukinryu’s ATR Dynamic Nampin uses a value equal to the current ATR multiplied by a coefficient as the nampin interval. The key is that “interval widens as volatility increases.”

For the same drop, fixed nampin adds five positions, while ATR Dynamic Nampin caps at three positions. As ATR grows during sudden moves, the nampin interval expands automatically, preventing rapid piling of positions in a short time.

Conversely, in calm markets, ATR shrinks and nampin intervals tighten, avoiding missed recovery opportunities. It automatically follows the principle of “be cautious when volatility is high, be proactive when calm.”

In Shoukinryu’s 11-year backtest (2015–2026), starting with 1 million yen in initial funds, the maximum drawdown stayed around 12% (approx. 252,302 yen). This is supported by ATR Dynamic Nampin.

Since 2015, gold has seen many sudden moves due to events like the China shock, Brexit, Corona shock, Russia-Ukraine invasion, SVB collapse, etc. Yet the maximum DD remains at 12% because ATR Dynamic Nampin automatically restrained position piling at each sudden move.

Fixed nampin EA often sees DD reach 30–50% during such sudden moves. ATR Dynamic Nampin is the designed answer that has withstood 11 years of surprises.

This week's gold market (4/7–4/10) started with news of a two-week ceasefire between the US and Iran. Although a ceasefire seemed to prompt gold selling, the price actually rose, breaking through the $4,700 level and currently in the $4,800 range.

In this market, ATR Dynamic Nampin demonstrated its function: on 4/8 it earned +3,529 yen with 7 lots held, and on 4/9 it locked in +12,828 yen with positions zeroed, continuing stable operation after the sudden move without incurring large unrealized losses.

Many anxieties about nampin EAs stem from the structural flaws of “fixed-interval nampin.” The paradox of accumulating more positions precisely when the market moves against you indicates a lack of market awareness.

ATR Dynamic Nampin reverses that. When the market is volatile, widen the interval to reduce risk; when the market is calm, narrow the interval to seize recovery opportunities. This mechanism underpins the 11-year track record of max DD 12% and RF 9.95.

It’s not that nampin is dangerous by nature; the outcome changes greatly depending on what kind of nampin it is. Shoukinryu’s ATR Dynamic Nampin is a logic that continuously adapts to the market’s reality.