For those who struggle with averaging down, the Golden Guardian is an EA that predefines the size of losses.

Serial Yoko and Kenji's GOLD EA Mastery Book, Issue 7

Hello, this is Yoko.

“Nanpin (averaging down) is definitely out of the question.”

We sometimes hear this from readers.

I can’t feel at ease with a system that keeps buying more (selling more) while carrying unrealized losses. I think that’s a very natural feeling.

Up to now, Rising Tide, Duo, and Renkin Jizai are all EAs that perform nanpin.

This time, for those people, we introduce a completely different approach:The Guardian of Gold—the story of it.

These two features are the Guardian’s main characteristics. This time, we will explain these two in order.

Nanpin is scary because you can’t see the end

An EA that uses nanpin will increase its positions while waiting for a reversal if the market moves against it. If it comes back, you close all at once for a profit. If it doesn’t, the unrealized losses keep growing. It’s unpredictable how far they’ll go.

This sense of “no visible end” is likely the biggest reason nanpin feels difficult.

This is something we, who created Rising Tide and Duo, openly admit as well. As written in Episode 4, using a nanpin EA means“dealing with waiting time”therefore.

Guardian fixes the size of a single loss in advance

When Guardian places an order, it sets the stop loss (SL) at15 pips. In Guardian terms, 1 pip equals US黄金 0.1 dollar, so15 pips equals a $1.5 range. For 0.1 lot (Gold 10 ounces), that’s about $15, or roughly ¥2,300 in Japanese yen (assuming $1 = ¥155). Since there is no nanpin, unrealized losses do not balloon unexpectedly.

In our demo account, ordinary losses were around -2,500 to -2,800 yen at 0.1 lot (spreads included a bit more).

“On the other hand, when you lose, you lose properly.” This is an important point. Since losses are capped by stop loss, losses are inevitable. Guardian isan EA that decides the size of losses, not an EA that eliminates losses.

If stop loss is fixed, how do you win? Guardian, once profits begin to appear, slowly moves the stop loss toward the direction of the gains (trailing) to extend the win. It’s the idea of small losses and expanding wins.

Hold up to two positions per day

Another feature ismaximum two positions held per day.

Each day in the evening, Guardian places two orders: buy at the previous day’s high and sell at the previous day’s low. Therefore, the number of positions you hold is at most two. Under normal price movements, even if you suffer two consecutive stop losses in a day, you would only lose twice the amount of a single stop loss. It won’t spike as nanpin EAs do with rapidly accumulating positions in one day.

Moreover, this feature relates to another aspect. Guardian only moves when price exceeds the previous day’s high or low. Therefore, even over 12 years of backtesting, there were 1,596 trades,about 10 per month, 2–3 per week.Few trades are not a flaw of the EA; it’s its nature.

How it actually behaved

On our demonstration account, all trades from September 3 to October 2 are published in another article as-is.

Also, October 2’s +24,718 yen was a gain that grew in the midst of a large price move during a release. Both wins and losses can be amplified in such turbulent moments.

The win rate is somewhat lower than the 12-year backtest (77.1%), and the sample size is still small, so it’s premature to draw conclusions. Still, you can see that “losses are not eliminated” and “loss size is predetermined” in actual trading.

▶ Here is the article that fully publishes all 14 trades of The Guardian of Gold

For whom it is suitable

Things to be careful about

Yoko’s personal note

The feeling of disliking nanpin is not a sign of weakness; it is how you choose to handle your risk. Guardian is the only one among us that can truly align with that feeling.

However, “not nanpin” and “not losing” are not the same thing. Because losses are pre-determined by the stop, losses will occur. I’d like to recommend Guardian to those who can accept this, fully understanding the size of the losses from the start.

Next time

Next time, we’ll discuss Guardian’s “daily movement.” What Guardian does from the end of the day’s daily candle until the next morning, and how Guardian’s feature of not competing with other EAs for funds will be introduced as well.

Thank you for reading until the end.

Yoko

※This article presents past verification results and demo trading as a reference and does not guarantee future profits. Please make investment decisions at your own risk.