What is a Crimson Lotus Dragon — The mechanism of a new EA supporting the 1,000,000 yen to 100,000,000 yen challenge
Regarding the new EA "Crimson Dragon (Gurenryu)" used in the recently announced “1,000,000 yen→100,000,000 yen Challenge,” here is a detailed explanation of the mechanism. It is a newly born EA with neither backtest nor real-world track record yet. Please treat this as an article that honestly conveys the design philosophy and how it is built, rather than boasting performance.
The most notable feature of Crimson Dragon is that buying and selling are each operated completely independently. If there is no long position, the first bar is established without conditions. After that, every time the price moves up by a fixed amount, buys are added one by one. Conversely, for selling, if there is no position, the first bar is sold, and as the price moves down, more sells are added.
What matters here is that the direction of the additions is not "unfavorable" but "favorable." Unlike typical averaging-down EAs that buy more when price drops, Crimson Dragon is designed to accumulate more buys while the price is rising. Buys and sells operate as if they have separate account balances, so a hedging account (one that can hold both buys and sells) is required for operation.
The intervals for increasing buys, stop-loss width, take-profit width, and break-even activation conditions are all calculated based on an "ATR" value. ATR measures the current price movement magnitude (volatility); when markets move vigorously, ranges widen; when calm, they narrow, and the system automatically adjusts.
If ranges are set by price, volatile markets will quickly satisfy conditions, while quiet markets will make it hard for conditions to be met. Using ATR ensures that, regardless of currency pair or time of day, judgments reflect the actual price movement at that moment.
Take-profit is determined at the level of “order groups.” Based on the price where the first buy was placed, a price that has moved favorably by a certain ATR width from there is preset as the take-profit line on the server for each position at the time of order placement. Because all positions in the same group share the same absolute take-profit price, once any one reaches take-profit, the entire group is effectively closed.
Break-even, on the other hand, is evaluated per position. When a position moves favorably by an ATR width from its entry price, the position’s stop-loss line is raised toward the entry price (for buys), and nothing beyond that is loosened. Take-profit operates collectively for the group, while break-even functions individually per bar, distributing responsibilities between group-wide take-profit and per-bar break-even.
Even if normal take-profit lines aren’t reached, there are several mechanisms to resolve excessive position count.
- Profit-turning close when over-limit: If the number of open positions exceeds a limit and the cumulative profit in that direction turns positive, close positions in that direction altogether
- Full close when buys and sells are balanced: When buys and sells each exceed a certain number and their counts exactly match, close both directions in one go regardless of profit or loss
- Weekend take-profit: Late on Friday, if total profit of buys and sells turns positive, close to avoid gaps and swap risks across the weekend
- Trading halt right after market opens: For the first 30 minutes after the daily switch, hold off on new buys/sells to avoid spread widening
All of these systems simply stop new entries or exit when criteria are met, while existing positions’ stop-loss and break-even continue to function as usual.
Crimson Dragon includes a compound setting that auto-adjusts lots according to effective equity. Start with a base capital and scale lots proportionally to how many times your equity exceeds that base. It also includes pre-checks to ensure sufficient margin before each order, skipping orders if funds are insufficient.
Crimson Dragon currently has no backtest results or live-trading results yet. What has been explained here is purely the design and how it is built, not a guarantee of performance. The upcoming 1,000,000 yen→100,000,000 yen Challenge starting next week will be the first real-world test for this EA.
We will honestly share both good results and not-so-good results here.
※This article is intended to provide information and is not a solicitation for investment. The performance results published are past results and do not guarantee future profits. FX/CFD trading involves risk. Please make investment decisions at your own responsibility.