A risk-return ratio that visualizes the EA's performance; the risk-reward ratio is GOOD! Now in focus: MUSASHI_EURUSD_M5
When it comes to EUR/USD, hedging, and 5-minute scalping EAs, White Bear Z USDJPY, but a new popular EA of the same type has appeared.
That EA is MUSASHI_EURUSD_M5, a three-high scalping EA that achieves a high win rate, a high PF (Profit Factor), and high spread tolerance.
We believe that a solid product page and the stance on providing investments and EAs described there have earned the support of many customers.
This time, along with several of the points from the article our editorial team recently wrote for Investment Navi+ titled "Honestly, Which EA Is Excellent? How Do You Choose?", we will look at MUSASHI_EURUSD_M5.
However, forward testing started on October 24 of this year and is still short, so we analyzed it using Musashi's over 11-year backtests and the backtest data based on FX Trade Financial MT4's domestic seven-plus-year historical data that we conducted in-house.
In "Honestly, How Do You Choose a Superior EA?", the points are as follows:
Points to look at, gathered from all the EA traders we interviewed
- Forward results have accumulated to a reasonable extent, and the graph is upward-sloping
- Low drawdown (DD) · not averaging down (grid) or martingale
- PF 1.5 or higher
- Risk-return rate = total net profit ÷ maximum drawdown
- Risk-reward ratio = average profit ÷ average loss
We will examine these five in order.
1. Whether forward results have accumulated to a certain extent and the graph is upward-sloping
As shown in the image below, measurement at GogoJungle began on 2019/19/24, so the forward results for item 1 are not yet satisfied.
Going forward, we will accumulate measurement results and continue to monitor them.
2. Low DD（Drawdown）・Not averaging down Low DD（Drawdown）・Not averaging down
Since forward testing is still short, let's look at backtests.
Musashi’s 11-year-plus backtest and our ownFX Trade FinancialMT4, using backtest data.
Below, in Musashi’s 11-year-plus backtest, the DD (maximum drawdown) is $558.66, which is 4.74% of the margin at that time.
4.74% — how should we evaluate this?
4. When there is a drawdown, the value showing how long it took to recover (risk-return rate = total net profit ÷ maximum drawdown) is needed, but total net profit $9,681.67 ÷ maximum drawdown $558.66 = 17.33.
According to the opinions of all the EA traders we interviewed, a risk-return ratio of 2.0 or higher is a guideline, so a result more than eight times that can be considered excellent.
The results of backtests using the FX Trade Financial MT4 historical data from our company are
DD (maximum drawdown) is $2,838.68, which is 4.09% of the margin at that time.
Risk-return rate = total net profit $80,252.36 ÷ maximum drawdown $2,838.68 = 28.27.
As expected, excellent performance.
Regarding not using averaging down or martingale, as shown in the image below, there were up to two hedged positions (long and short).
3. PF (Profit Factor) — is it above 1.5? In Musashi’s backtest it’s 1.41, and in our backtest it’s 1.81, which is reasonably good.
5. Risk-reward ratio = average profit ÷ average loss —In Musashi’s backtest the lot size was 0.1, while in our backtests the lot size was 1.0, and thusMusashi’s backtest shows average profit 7.53 pips ÷ average loss 30.60 pips = 2.46, with a win rate of 85.50%, which seems reasonable.
In our backtests, average profit 59.28 pips ÷ average loss 218.72 pips = 2.71, and with a win rate of 87.00%, this also suggests a favorable evaluation.
So, having briefly looked at five points, based on these analyses, MUSASHI_EURUSD_M5 appears to be an excellent choice with no complaints.
Written byHayakawa
