Five pitfalls that anyone who starts making a profit with EA must go through
The moment you start seeing profits from EA operation
Many people get excited thinking, “This could change my life.” I understand that feeling well. Once you set an EA running, it will keep working even while you sleep. The experience of profits piling up with zero labor is incomparable to anything else.
However, there is a regrettable fact I must share.Eight out of ten people who fail in EA trading are not those who first incur losses, but those who first make profits.
This is a firm conclusion I’ve drawn from watching hundreds of traders. The moment profits begin, people repeat the same pattern of mistakes. The mistakes they make precisely because profits are being earned. This is the main reason funds are wiped out rapidly.
Today, I will explain five representative pitfalls that people who start making profits tend to fall into, and how to address each. If you’re new to EA trading, if you’re feeling elated after your first profits, or if you think “I’m calm so I’ll be fine,” please read to the end.
The most common failure pattern, the number one cause.
Initially you operate as recommended with “1,000,000 yen account, 0.01 lot.” After three months you gain 200,000 yen, and you start thinking this:
“If I had been trading 0.05 lots, I could have earned five times 1,000,000 yen—100 million yen?”
“Next, I’ll raise to about 0.03 lots.”
“No, I’ll go up to 0.05 and aim for 2,000,000 yen in half a year.”
I understand the feeling. The fact that it’s actually working makes the regret of “I could have earned more” grow.
Why greed for lots is deadly
Backtesting results are calculated assuming a specific lot ratio (e.g., 1,000,000 yen account with 0.01 lot). The “maximum drawdown 12%” is also in that context.
Raising the lot by five times also increases the maximum drawdown by five times, i.e.,60%. If you’re operating on 1,000,000 yen, you could face 600,000 yen of unrealized loss, which is beyond what normal mental endurance can handle. Before that, low leverage could cause a stop-out more likely.
It’s not that profits only come out during good times; it’s that unless you have a lot size that can survive the maximum drawdown, it’s meaningless. Running at a backtest-exceeding lot size will inevitably explode somewhere.
How to address: Always scale lots proportionally to capital
When you feel like increasing the lot, increase your capital accordingly. If 0.01 lot on 1,000,000 yen, then 0.02 lot on 2,000,000 yen. This is the iron rule. Increasing lots without increasing capital is effectively doubling leverage. Don’t forget you’re stepping into an area beyond the backtest’s assumption.
When profits begin, you become sensitive to EA information. You see ads like “monthly return 30%” or “win rate 98%.” Then you start thinking:
“My EA earns 5% monthly, but an EA with 30% monthly could earn six times more.”
“If there’s a better EA, I should switch to it.”
“If I run multiple EAs in parallel, I should earn more.”
Then you buy a new EA, run it on the same account alongside the original, and as a result, neither can perform to its full potential. This pattern happens very often.
Why does “cheating” fail?
There are two problems.
Problem 1: Take at face value the advertised numbers
Most EA claiming “monthly return 30%” are cherry-picked for a specific period and market. If run for a year, the average is often lower or negative. The flashier the numbers, the more you should be skeptical.
Problem 2: Sharing margin
Running multiple EAs on the same account causes margin-sharing conflicts. When EA A is in drawdown and starts averaging down, EA B may also go in, and both can run out of margin, failing to execute the intended logic. Worst case, forced liquidation wipes out profits for both.
How to address: Focus on one EA for a period
For at least 6 months to 1 year, concentrate on one EA only. If you want to test a new EA, run it on a separate account. By dividing margins, you avoid interference and can verify each EA’s real performance.
Once profits appear, people get drawn to the power of compounding.
If you compound 5% monthly for a year, it becomes about 80% annualized. This is true. But many traders fall into a trap here.
“If I withdraw, the compounding effect disappears.”
“Keep profits and reinvest to grow snowball-like.”
“If the capital grows, the lots will automatically increase.”
And so they never withdraw profits, letting them accumulate in the account. After about six months, a day of drawdown wipes out all profits and the principal. This is the “don’t withdraw” trap.
How to address: Set a 2:1 withdrawal rule
There is a simple rule I recommend. Take out one-third to one-half of the monthly profit each month. The remaining two-thirds to one-half stays in compounding.
This allows you to enjoy compounding while securely retaining realized profits. It’s a practical middle ground between “all compounding” and “all withdrawal.”
A technical pitfall many who get used to EA trading fall into.
After operating for about three months, you think:
“If I narrow the averaging interval, more profit could be earned.”
“If I increase the maximum number of positions, more profit could be earned.”
“If I loosen the spread filter, entry frequency will increase.”
Then you modify the developer’s recommended settings based on your own experience. The result is an EA that is entirely different from the backtest, with unforeseen behavior causing losses.
Why “improving it yourself” fails
EA parameters are balanced after long periods of backtesting and forward testing by the developer. Even if you think “if I loosen this a bit,” that change affects other logics and often disrupts total balance.
In particular, parameters like averaging interval, maximum position count, and spread filter are the most sensitive because they are designed as protective mechanisms. Loosening them immediately raises risk.
Intuition gained from three months of operation is almost meaningless compared to more than a decade of backtesting by developers. It’s not arrogance; it’s objective fact.
How to address: Do not touch parameters as a principle
Believe that the default settings are optimal. If you must change something, consult the developer, or run a test EA on a separate account for six months to a year before deciding. If you don’t proceed carefully, your live account becomes a lab.
The last pitfall is not technical but a human relationship issue.
When profits begin, you want to tell others—family, friends, coworkers. If someone asks “Can I do this too?” or “Which EA are you using?” it’s natural to want to help. This is the trap.
Three risks of recommending to others
Risk 1: Relationship deterioration when the other person incurs losses
If a friend suffers large losses from an EA you recommended, the relationship almost certainly worsens. The feeling that “you recommended it” lingers stronger than you expect.
Risk 2: Your own mental state is affected
The pressure of a friend suffering drawdowns influences your own trading judgments. You worry about how they will view you if you are still bearing losses, making it harder to think calmly.
Risk 3: You bear the responsibility for explanations
You end up answering questions like “Are you okay with the current drawdown?” or “Why didn’t you enter now?” and this mental burden can be draining.
How to address: Do not discuss with people close to you
Keep EA trading discussions to a risk-free community. In a community of peers using the same EA, sharing drawdowns and profits won’t create responsibility issues. For family, friends, and coworkers, keep it as “I’m doing a side investment,” which helps you continue long-term.
After looking at the five pitfalls, did you notice a common point?
What unites all five isthe regret of “I could have earned more” and the desire of “I could earn more”.
This is confirmed in behavioral economics research. When in loss, people play it safe, but when profits are being made, they tend to take more risks. In prospect theory this is called the “mirror effect.” EA traders are not exempt; because profits exist, judgment becomes looser, a structural trap.
Knowing this psychological trap significantly reduces the chance of falling into a pitfall. If you can objectively say, “I am getting greedy now,” you can pause and avoid emotional judgments.
Among those who have continued to operate my EA for over a year and consistently earned profits, there is a common habit:“Documenting their own rules.”Specifically, at the start of operation they write this down.
・Operation lot: 0.01 (unchanged)
・Withdrawal line: unrealized loss 150,000 yen (unchanged)
・Withdrawal rule: withdraw half of monthly profit
・Parameters: operate with developer recommended values (unchanged)
・Adding other EAs: prohibited
・Introducing to family: prohibited
If greed or fear arises during operation, review this memo. If you feel like acting differently than what’s written, pause and think. This alone prevents emotionally driven decisions.
EA trading is not a technical issue but a matter of following rules. Documenting it protects your future self from emotions.
To recapitulate the five pitfalls that people who start making profits with EA tend to fall into.
①Greedily increasing lots → stepping into backtest-unexpected territory, with drawdown expanding proportionally
②Cheating with other EAs → Deceived by flashy numbers, margin sharing causing interference
③No withdrawals, chasing only compounding → Paper profits are worthless unless realized; risk of total loss on drawdown
④Tinkering with parameters → Erodes risk-control features, leading to unforeseen behavior
⑤Recommending to others and bearing responsibility → Damaged relationships and mental exhaustion
Eight out of ten people who fail in EA trading are not those who first incur losses, but those who first see profits. Treat the moment profits appear as the period of greatest caution. Pre-emptively document your rules and follow them. This alone greatly improves the odds of long-term success.
The knowledge about “lot management” and “withdrawal line settings” discussed in this column is further elaborated in the e-book “Gold EA: The Complete Guide to Choosing an Account.” It includes a 30-item checklist and broker comparison worksheet. If you want to solidify the foundation of EA operation, please check it out.
※This article is for informational purposes and not a solicitation for investment. The operating results shown are past performance and do not guarantee future profits. FX/CFD trading involves risk. Please make investment decisions at your own risk.