EA development specialists explain clearly and politely! A course to start automated trading from zero | Episode 7: Even in automated trading, mindset matters! [FX Noble]

FX Noble's Profile

He turned from discretionary trading to automated trading and has been an EA developer posting on GogoJungle since 2017. His代表作 "Scalping Dragon" and more have achieved over 1,000 sales in total. He also shares various information about automated trading on his blog and Twitter.

Official Blog：FX Noble's EA Development Blog
Twitter：https://twitter.com/yenpetit

*This article is a reprint/re-edit of an article from FX攻略.com July 2019 issue. Please note that the market information written in the main text may differ from the current market.

Clarify Profit Targets and Maximum Losses

In FX automated trading, the system executes trades mechanically, so in comparison to discretionary trading, the psychological aspect may seem less important. However, in reality, the system is operated by an individual. Even when using the same system, the timing of operation and lot settings vary among traders, leading to significantly different results, which is very interesting. This article summarizes important mindset considerations for beginners operating EA.

In system trading and asset management in general, you first need to clearly define your target return and the amount of risk you are willing to tolerate. For example, decide how much profit you want to earn over a year from a capital base of 1 million yen, and how much loss you are willing to tolerate. Without this, you may become ecstatic or despondent over short-term profit or loss, which could negatively affect system operation. Particularly, the maximum acceptable loss is a crucial threshold that can stop the system, so be sure to decide it.

Keep Lot Sizes Modest

Trading with large lot sizes naturally makes you anxious about positions and you may frequently monitor the chart, worrying about unrealized losses. To avoid making decisions grounded in emotion, it is important to keep lot sizes at a level where you won’t mind neglecting them. This is not necessarily a percentage of your funds, but rather the level of lot size that feels comfortable for you.

When people think of FX, the image of leverage and making a fortune quickly is strong, but automated trading is about steadily earning money while going through wins and losses. Pursuing high returns naturally increases lot sizes and can wipe out funds with small drawdowns. Embrace the mindset of “Haste makes waste” and aim for relaxed trading.