Episode 5: What is the Difference from Discretionary Trading? The Option of EA from USDJPY Ultimate (All 6 Episodes)
So far, in the four episodes, we talked about the contents of the USDJPY Ultimate EA. This time, with a slight shift in perspective, we will discuss “what fundamentally differs between automated trading (EA) and discretionary trading where you judge by looking at the chart yourself.”
This is written for those who are interested in EAs but are unsure how they differ from discretionary trading and have not yet taken the plunge.
14-day free trial version is available
First, you can experience what trading with an EA is like in your own environment.
The difficulty of discretionary trading lies in execution, not knowledge
A common reason discretionary trading doesn't go well is a lack of knowledge. However, in practice, the harder part is not the knowledge itself but continuing to execute the decided rules consistently.
When you’re under a drawdown, you might delay stop-loss, thinking, “If I wait a little longer, it might come back.” Conversely, when profits are on the table, you may waver between the hope that it will go further and the fear of “I want to lock in now.” Even if you intellectually understand, once you actually hold a position, your judgment can easily waver. This aspect is less about experience or quantity of knowledge and more about human nature.
The main role of an EA, in my view, is to eliminate this “execution drift.” As explained in the first installment, USDJPY Ultimate is designed as a system to execute trades based on a fixed methodology without being swayed by emotions. The value lies in being able to mechanically execute the decided rules, more than the superiority of the logic itself.
What an EA can and cannot do for you
This overlaps with the reasons for publishing parameters in the third installment and the criteria when performance drops in the fourth. EAs take over the execution burden, but they do not take over the burden of understanding. In fact, how much you try to understand can significantly affect your relationship with the EA.
Designed not for “complete neglect”
Even if the effort of execution can be reduced,
the effort to face the market does not disappear
There are cases where people imagine, “If I install the EA, I can ignore everything else,” but honestly, we don’t intend to go that far. As discussed in the fourth installment, when the per-account safety mechanism activates, it becomes a cue to decide whether to continue or pause once. There is also value in recognizing changes in market conditions. The closest image is to partly let the EA handle execution, while you continue to monitor the situation yourself.
Who it is suited for
Considering what has been discussed, I believe EAs are suited for people who want to “continue to execute the decided rules calmly without emotions” rather than those who want to master chart analysis. Conversely, for those who want to refine discretionary judgment itself, delegating to an EA may not necessarily be the shortcut. Whether you find the ideas of “the orthodox way,” “design that avoids entry,” “money management,” and “parameter publication” convincing can be a useful criterion.
On the option of using an EA
An EA is a mechanism to remove the execution drift in discretionary trading, not a tool to remove the need for understanding or judgment. If you’re comfortable with carrying out rules mechanically while continuing to monitor the situation yourself, an EA can be a strong option. It may be fastest to experience this sense firsthand with the 14-day free trial version rather than reading about it.
Next time, in the final installment of the series, we will look back on the five installments so far.
Would you like to try trading with an EA for 14 days, free of charge?
14 days free trialDetails of the actual logic, parameters, and published results can be checked on the product page.
[Dollar-Yen Only] The orthodox trend-following EA “USDJPY Ultimate”Note: This article does not recommend investment or trading in any specific financial product. It aims to introduce the design philosophy of the EA. There is a potential for loss in operating an EA. Past backtests and forward tests do not guarantee future performance. When actually operating, please fully understand the risks and use at your own discretion and responsibility.