Regarding how to choose a martingale-type EA
Thank you for your continued support. This is Dr. Neko.
Recently, it has been gaining a bit of popularity
about the “Nanpin EA,”
Nanpin EA is actually a very difficult type of EA to evaluate.
(For convenience, we will refer to the “Nanpin & Martingale EA”
as Nanpin EA here)
＜Why is Nanpin EA difficult to evaluate?＞
The reason the evaluation of Nanpin EA is difficult is,
because,
if you only look at forward results,
you might think, “This EA isn’t losing at all!”
and it may look like a very excellent EA,
so the question of how much advantage it has as an EA behind the scenes
becomes very hard to see,
which is why evaluating Nanpin-type EAs is difficult.
＝＝＝＝
Now, at this point, let us list
a few types of dangerous Nanpin-type EAs.
that you should watch out for.
＜Types of【Need-to-watch Nanpin EAs】＞
(1) No SL setting
(2) When you set SL and backtest, the profit graph slopes downward to the right
(3) After you close the positions you were holding, you immediately take the next position
The above three points
are the types of【Need-to-watch Nanpin EAs】.
First, (1) and (2),
this means
that “no SL setting” means,
“as long as funds allow, you endure floating losses in the hope of becoming profitable,”
which is what it means.
And, EAs without an SL setting are usually
【(2) When you set an SL and backtest, the profit graph slopes downward to the right】
quite common, I think.
This ultimately occurs because the entry logic of that Nanpin EA has
“not much advantage,”
so you end up with a pattern of
“no SL setting” and “when SL is set, it slopes downward to the right.”
I think this is a common pattern.
Therefore, when looking at Nanpin EAs,
【Nanpin EAs are also just normal EAs】
and this should be kept in mind properly.
As an EA, if there is TP, there is SL.
And by carefully selecting entry points,
you increase the probability of reaching TP without hitting SL,
making it a “less likely to lose EA.”
In other words,
“Not setting SL” means
you are masking the looseness of the entry point selection logic
by the width of SL,
and in reality, that is what is happening, I think.
Additionally, regarding the point of “careful entry point selection,”
we will explain this in detail in (3) below.
＜The relationship between Nanpin EA's advantage and the frequency of entries＞
Next,
【(3) After closing the positions you were holding, you immediately take the next position】
is the point.
At first glance,
it looks like you are taking many positions,
and from an aggressive trader’s perspective, that may seem favorable.
However,
when you immediately enter after a close,
without carefully selecting entry points, you quickly take positions, and
then you try to realize profits using wide SL and many Nanpin entries.
This kind of trading tends to increase.so the probability of price moving against you after entry becomes high,
Entering immediately after a close,
means “entry points are approximate,”
and with subsequent Nanpin entries,
you end up hoping for profit,
Thus,
the higher the entry frequency,
the more appealing it can look simply because of that,
but the higher the entry frequency,
the more it can indicate that entry points are not carefully selected,
so please be mindful of this.
If you run such “low-advantage Nanpin EAs” for a long time,
the longer you operate, the more likely they are to fail.
(Conversely, high-advantage Nanpin EAs do not tend to fail easily.
This difference is determined by what was stated in (3) above,
the “difference in entry-point advantage (whether you carefully select entry points).”
)
＜Summary＞
That’s all for now; I’ve provided a brief explanation on how to choose Nanpin EAs.
I wouldn’t claim this is the absolute correct approach, but
as one way of thinking, please keep in mind this perspective.
Also, Nanpin EAs,
we at this site sell EAs such as “EA_Blizzard,” “Koyuki,” and “Blizzard” (Fubuki),
and I think others are selling various EAs as well,
and I believe this approach can be applied to all EAs,
so when you are considering purchasing a Nanpin EA,
focus on whether there is an advantage as an EA,
and base your decision on that perspective.
Furthermore, after purchasing an EA,
for Nanpin EAs and EAs with high entry frequency,
perform backtests with proper SL settings many times to verify
・whether this Nanpin EA has an advantage or not
・whether simply widening the SL is hiding weak entry point selection
and then proceed to operate after confirming this.
Additionally, a more detailed method to evaluate Nanpin EA will be explained as a bonus of “EA Neko,”
so if you’re interested, please check that too. m(_ _)m
(The release of this bonus may be a little later)
Dr. Neko
