What I want to tell people who are looking for an "EA with zero drawdown"
As an EA developer, one of the most common questions I receive is this.
“Is there an EA that never incurs drawdown?”
“I found an EA that claims zero drawdown—what do you think?”
“I’m looking for an EA that absolutely never loses; could you introduce one?”
I understand the sentiment. Seeing red figures in the account can shake you mentally like nothing else. When you’re laying in bed late at night and you see a display of 150,000 yen in drawdown, that nauseating feeling is natural. If you’ve ever experienced it, you wouldn’t want to feel it again. Ideally, you’d never want to experience it again in your lifetime. That’s likely the honest feeling of many traders.
However, as a developer, I must be honest with you.“Zero drawdown EA” is a product you should avoid.And, if you ever encounter an EA that claims “no drawdown at all,” it is highly likely to be either a “word trick” or concealing serious risks somewhere else.
This fact may be hard for EA beginners to accept. If you’re under the illusion that “buying a great EA will safely grow your assets,” you may be especially prone to this. Yet continuing to operate under that assumption can lead to significant losses in the end. This is the conclusion I have drawn after watching hundreds of traders.
Today, I’ll explain why pursuing “zero drawdown” is dangerous, how to approach drawdown, and the true criteria you should verify in an EA—from an EA developer’s perspective. It may be a bit long, but if you read to the end, your standards for selecting an EA will likely change significantly.
First, let’s consider the technical aspect. Is it truly possible to have an EA that incurs no drawdown?
In theory, yes it can be created. However, the methods to achieve this all carry such large trade-offs that they are not practical. Specifically, there are three ways to create an EA that does not incur drawdown.
Method 1: Ultra-short-term settlement (close in seconds to minutes)
If you design it to always settle within seconds to minutes after entry, you can close before drawdown becomes large. Some scalping-type EAs promote this “ultra-fast turnover.”
But the problem here is the “spread cost.” You start with drawdown equal to the spread when you enter. For example, on a gold account with a 3-pip spread and 0.01 lots, you immediately have about 450 yen drawdown at entry. To close with zero drawdown, you would need price movement of at least 3 pips in your favor. Profits would also be small, resulting in near-zero-sum trading.
Because the net profit after subtracting spread is small, you won’t see your balance grow even with hundreds of entries per month. This is the reality of ultra-short-term settlement EAs. Even if you achieve “zero drawdown,” profits are almost zero, which is contradictory.
Method 2: Tight stop-loss (immediate settlement in a few pips)
Design to immediately close when drawdown reaches about 3–5 pips. Theoretically, you can lock in a loss at a small drawdown. You could say the maximum drawdown is always small.
But this method has another problem.Even if win rate is maintained, the Profit Factor (PF) becomes extremely lowBecause a slight adverse move triggers a stop, trades that could have rebounded into profit are stopped out.
As a result, you get an EA with “win rate 80% but PF 0.9.” It may look attractive, but PF below 1 over the long term reduces capital. This is another EA that has small drawdown but no real profits.
Method 3: Do not call drawdown “settled” (the most dangerous)
Here’s the main point. Many EAs on the market that advertise “zero drawdown” or “100% win rate” fall into this method 3.
The mechanism is simple: do not settle the positions that have drawdown. Only realize the profitable positions, and leave drawdown positions salted away at the corner of the account. Then, when you total only the settled trades, you get a seemingly all-profitable figure. “100% win rate” and “all trades win” are marketing hype; in reality, tens of drawdown positions are actually weighing on the account. This is the reality.
Continuing to use this EA type, when the market moves strongly in one direction, salted positions’ drawdown explodes, leading to a forced margin call and account ruin. Cases like “kept winning for six months, then suddenly lost all funds” are almost always this pattern.
All methods, when you look closer, just hide drawdown; they do not truly solve anything. Rather, by trying to erase drawdown forcibly, other risks are amplified.
Particularly beware of Method 3. There are many products that claim “not settling drawdown” but promote themselves as having “100% win rate.” Even if the page says “all trades are profitable,” they calculate excluding salted positions. It’s easy to miss from the sales page, so caution is advised.
Now let’s shift perspective and look at how a good EA handles drawdown.
Many good EAs are designed with grid (averaging down) or a focus on average entry price. In these EAs,drawdown must occur for profits to be generated. This may sound paradoxical, but it’s an indisputable fact.
Because the starting point for averaging down is “drawdown,” the initial entry that moves with the market may sometimes go in the direction of profit, but that’s only a fraction of trades. The majority involve a reversal after entry, taking on drawdown, improving average entry price with averaging down, and then a rebound to close all positions in profit, thus earning returns.
Example: The mathematical setup by averaging down generates profit
Suppose you buy one position of gold at $4,800. The price then falls to $4,750. With only one position, you’d be in a $50 drawdown unless it rebounds back to $4,800 to realize a profit.
Now averaging down triggers, adding a second unit at $4,750. The average cost becomes $4,775. A rebound back to $4,775 breaks even; any higher price yields overall profit.
If the price drops further to $4,720 and you add a third, then $4,690 for the fourth, the average cost drops further, and a rebound to around $4,750 means all positions are in profit territory.
Thus, the market doesn’t need to completely return to the original level for profits to occur; averaging down enables profit generation. This mechanism relies on drawdown being part of the setup—zero drawdown contradicts it.
View drawdown as “seeding profits”
A averaging-down EA earns by drawdown→ price reversion in average price→ profit realization. If you label drawdown as bad and manually cut losses, you sabotage the final step of profit realization.
In CHAOS_GOLD_LISKOFF_MT5, for example, we started Monday with drawdown of -52,296 yen, but by Tuesday realized +27,886 yen, and continued with +9,259 yen and +458 yen, recovering by week’s end to a net positive. If I had panicked on Monday and manually closed, only realized losses would remain.
In other words, for a averaging-down EA, drawdown is“seed for future profits”. If you view drawdown merely as red numbers, you’ll struggle to achieve results with EAs. This is not just a matter of mindset; it’s a factual truth derived from how averaging-down EAs work.
When evaluating EAs, the thing to verify is not whether drawdown occurs, but how drawdown is managed, specifically whether the EA discloses maximum drawdown, maximum number of positions, and whether it has a mechanism to close all positions at a certain drawdown threshold.Max drawdown disclosure is crucial. If the maximum drawdown is disclosed, it shows the developer understands the worst possible drawdown. If not disclosed, there may be hidden risks. Ideally, use an EA with a backtest period of 10+ years and maximum drawdown under 20%. If the backtest period is short or max drawdown is not disclosed, the risk of unexpected drawdown after starting is high.
Verification②: Is there a cap on the maximum number of positions held?
A grid/averaging-down EA must have a cap on the number of positions. Without a cap, if the market moves against you, you could keep averaging down indefinitely and ruin the account. For example, a cap of 30 positions prevents further averaging down beyond that, preventing unlimited drawdown. Without a cap, there’s danger that you’ll averaging down until margin maintenance fails.
An EA that automatically settles all positions when drawdown hits a certain amount can protect the account in worst-case scenarios. Without this, there’s a risk of being forced to a margin call due to unforeseen rapid market moves. If an EA includes a parameter like “Maximum Acceptable Drawdown (JPY),” that should allow you to set your loss tolerance and auto-settle beyond that limit.
Three additional points to check as supplementary
In addition to the three, if possible, also verify these. It will further improve the accuracy of your EA selection.
Added ④: Margin maintenance stopper function
Function that stops new entries when margin maintenance rate falls below a certain threshold. This can prevent taking on new positions when drawdown is large, preserving account resilience.
Added ⑤: Balance between Profit Factor (PF) and win rate
A high win rate alone can be a trap. Ideally PF above 1.5 plus win rate above 70%, or lower win rate with PF 2.0 or higher.
Added ⑥: Real account performance disclosure
Not only backtests; ongoing real-account performance disclosure enhances trust. EAs that are automatically published on services like MyfxBook or Real-Trade.tech provide numbers that are hard to manipulate.
If you fall for an EA that claims “zero drawdown” or “100% win rate,” there are common patterns. Check if you match any of them.
The memory of drawdown becomes traumatic, causing a strong reaction to “zero drawdown.” After a painful experience, it’s natural to feel that “drawdown must be avoided at all costs.” But sellers of EA claiming zero drawdown may exploit that fear. Be wary of those who say “we will ease your fear.”
Newcomers often think automation will make money easily, seeking “risk-free gains.” Unfortunately, there is no such thing as absolute safety in investing. Eliminating risk means removing return; any product claiming absolute safety hides something.
Be careful of “win rate 95%” or “all trades closed in profit.” Win rate alone can be manipulated. As mentioned, leaving drawdown to run can yield 100% win rate in appearance. What matters are PF, RF, max DD, period, sample size, and multiple indicators—not a single metric.
Sales pitches like “monthly 10% profit” or “double your assets in 3 months” move emotions. If you pause and test calmly, you’ll find these claims are unlikely to be true. Stop and verify before being swayed by such promises.
If you match these patterns, I recommend reassessing your EA selection criteria. Focusing on solid, reliable numbers rather than flashy marketing reduces the chance of being misled.
I myself develop and sell gold-only EAs. When marketing my EAs, I never use terms like “zero drawdown” or “100% win rate.” Why? Because those statements would be false.
My own EAs show: Shōkinryū win rate 84.28%. The remaining 15.72% are losing trades. CHAOS_GOLD win rate is 72.07%. About 30% are losses. Maximum drawdown is 12% for Shōkinryū and 22% for CHAOS_GOLD. I disclose these numbers on the product pages without hiding them.
Why publish unfavorable numbers? There are two reasons.
Promoting “zero drawdown” may boost sales, but buyers, after actually trading, will feel betrayed the moment drawdown occurs. Complaints, refunds, bad reviews on social media, and ultimately loss of trust in the developer. Sacrificing long-term credibility for short-term revenue is not wise.
People attracted by “zero drawdown” will panic when drawdown appears, leading to manual stop-loss, setting changes, or stopping the EA—thus preventing it from performing. This is unfortunate for both developers and traders. I want only those who understand drawdown will occur to use my EAs and trust the mechanism.
Before buying, check whether the developer discloses unfavorable numbers as well. This is the simplest criterion to determine a trustworthy developer.
Rather than seeking a “zero drawdown EA,” it’s faster to learn to manage drawdown well. Here are five habits to adopt.
Habit 1: Predefine exit lines in monetary terms
Before starting, decide in actual currency how much drawdown will trigger exit. Vague decisions like “roughly” or “watch and see” lead to emotional decisions. For example, on a 1,000,000 yen account, if drawdown reaches 150,000 yen (15%), set to close all positions; when that amount is reached, you can act without hesitation.
Habit 2: Limit account checks to 3 times a day or less
People who check their accounts often tend to make emotional decisions. Data shows those who check 10 times a day intervene manually far more than those who check once a day. Turn off mobile MT5 notifications and remove the PC bookmark to create a friction that discourages constant monitoring.
Habit 3: View drawdown as a rate, not a currency
Hearing “drawdown of 150,000 yen” can feel large, but if you view it as 15% of your account, it fits within expected ranges given the backtest. Do not be swayed by absolute numbers; compare rate and past drawdown performance.
Habit 4: Watch EA live streams on YouTube
Many developers stream real accounts on YouTube. Seeing someone else with the same EA in drawdown can be reassuring. Knowing you’re not alone helps mental resilience.
Habit 5: Join a community of users
Dealing with drawdown alone is risky. Join a community of peers using the same EA to discuss and support each other. I run “Asahina Lab” which offers free consultations. Please feel free to join.
Through hundreds of interactions with EA operators, one conviction stands out: long-term performers are all, without exception,“calmly tolerating drawdown”.
Conversely, most who incur losses panic at drawdown and manually close or adjust settings, causing the EA to perform poorly. The EA itself may have been functioning properly, but the operator’s interference destroys the strategy. This is the most common pattern.
A true case: someone who lost all funds in 3 months
I once had a purchaser who lost all funds in three months. The cause was clear.
In the first month, as drawdown reached 100,000 yen, they panicked and manually closed everything. The next month, another customer told them that if they had endured, profits would have realized, so they started again, but again drew down and closed manually. In the third month, they tweaked parameters to average down earlier, but that backfired and led to a margin call. The EA itself was not at fault; if the backtests had run as expected, they would have been significantly profitable in three months. The issue was the operator not tolerating drawdown.
On the other hand, common traits of those who have long-term success
Those who continue to succeed for more than a year share these traits:
• Predefine a retreat line and never touch until then
• Do not check the account several times a day (about once a day)
• Maintain psychological calm to treat drawdown as within expectations
• Do not change parameters while running
• Consult with peers and avoid shouldering alone
All of these are not “special talents.” They are simply following rules. If you can adhere to them, achieving long-term results is not difficult.
EA operation is not about skill, but about“whether you can fully trust a designed system”. The stance of seeking zero drawdown itself undermines that trust. That is my honest opinion.
“Zero drawdown EA” is almost certainly a product to avoid. Here are the reasons summarized again.
①Techniques to eliminate drawdown all introduce other risks (ultra-short-term settlement loses on spread / tight stops lower PF / leaving salted positions destroys the account).
②In averaging-down EAs, drawdown is the source of profits. Without drawdown, no profits are produced.
③What to truly verify is not whether drawdown occurs, but how drawdown is managed (disclosed max DD, max positions, and automatic full settlement at drawdown).
④Honest developers disclose unfavorable numbers as well. Be wary of EAs that claim zero drawdown.
⑤People who perform well long-term tolerate drawdown calmly. This is not a talent but a matter of discipline and routines.
Drawdown is inevitable in EA trading. If you understand it as part of the strategy rather than an enemy, the world of EA trading becomes much broader. I hope the content I provide helps you understand this better.
A forthcoming e-book that delves deeper into the column’s theme: “How to Handle Drawdown in Averaging-Down EAs” to be released soon. It covers distinguishing healthy drawdown from dangerous drawdown, designing exit lines, mental management, in 50 pages total. I’ll announce its release on Asahina Lab.
※This article is for information purposes and not investment solicitation. The performance shown is past results and does not guarantee future profits. FX/CFD trading involves risk. Please make investment decisions at your own responsibility.