The relationship between 【EA performance (profit)】 and 【the operator to be activated】

Thank you for your support. This is Doctor Neko.

Today, I would like to include a brief discussion on the stated contents.

We often receive questions from users such as, “I want to improve EA performance; which broker should I use?”
from users.

Here, there are two common options in the market:
(1) Brokers with narrow spreads (mostly domestic brokers)
(2) Brokers with wide spreads (mostly overseas brokers)
these two.

In this case, of course, forward performance of the EA is

(1) brokers with narrow spreads

tends to be better in terms of EA performance (i.e., profitability).

Why is that...?
(1) Brokers with narrow spreads (mostly domestic brokers) have
“spreads,”
which means the “fee per trade” is smaller,
so it’s easier to avoid losing trades (i.e., easier to win),
and thus forward performance tends to improve.

→ Of course, with only one trade or two trades, the difference isn’t large, but as the EA runs for half a year, a year, over a longer period,
differences gradually accumulate, and ultimately,

the “spread difference” can lead to a substantial difference in profits.

On the other hand,
(2) brokers with wide spreads (mostly overseas brokers)
do the opposite; compared to (1), the EA performance (i.e., profitability) tends to deteriorate.

This is because spreads are wide (i.e., higher fees),
which is the natural result.

Therefore,
When you simply want to improve EA performance, you should either choose domestic brokers or overseas brokers that also
offer narrow spreads.

This means that you should opt for brokers with narrow spreads.

However, among overseas brokers there are also those that offer various bonuses (credit) and other features.

exist.

In such cases,
how does EA profitability change,

・The EA performance tends to worsen (profits decrease)
・However, as EA performance worsens, you can still gain bonuses (increase in profits)

in this way.

Therefore, when operating on overseas brokers,
you should not judge by EA performance alone,

but rather evaluate EA performance with the sum of two elements:

“EA profits + bonuses.”
This makes it necessary to assess EA performance with both factors in mind,
which is the approach.

This area is generally understood by those who have run EAs for a long time, but

especially beginners

tend to look at the “profits of EA” alone and say, “I can’t win with an overseas broker; the forward deviation is large,”
without considering the “bonus addition,”
so please be cautious.

In addition, some overseas brokers offer features like
zero-cut, high leverage, etc.,
and the costs of these features are reflected in the spreads,
so these can also reduce forward profitability of the EA,
so please take note of this as well.
(Even taking these points into account, there are still quite a few people who choose overseas brokers.)

In summary:

(1) If you want to improve EA performance, you should choose brokers with narrow spreads (domestic brokers, etc.)

(2) On overseas brokers, EA performance itself tends to deteriorate due to spread width.
However, profits can increase due to bonuses, and you can benefit from features like high leverage and zero-cut (if you use them, understand the trade-offs before using).

This is the likely shape of things.

Additionally, among overseas brokers,
affiliate costs are also reflected in the spread,
so considering that will lead to an even more accurate understanding.

And when you look at the reality of long-term trading,
consider the impact of the spread width described above

(Example)

(narrow brokers) “0.5 pips × 100 trades” = 50 pips

(wide brokers) “1.5 pips × 100 trades” = 150 pips

→ In other words, after 100 trades, total differences equal
“a difference of 100 pips in fees.”

In practice, when running the EA,
with wide-spread brokers, you will likely observe that, compared to narrow brokers,
the number of times your SL is hit increases roughly by one.

Therefore, as a relationship between EA performance and the broker you operate with,
I hope you find this useful as a reference.

(Note)

※We are not necessarily recommending overseas brokers;
“Use of overseas brokers” is not widely recommended domestically at present and
is ultimately at your own risk,
so please keep this in mind as well.