Assemble your original EA portfolio and ride the market waves: "Anomaly-based," "Follow-the-trend," "Counter-trend," "Multi-Logic" editions - EA Creators' Perspective: Sharing Knowledge in EA Operations - Navi+ - GogoJungle | Auto Trading - Market Analysis

Normally, when I write blog posts, I don’t focus on SEO or anything; I write what I want to write.

Today, I’m planning to write an article titled “How to Build an EA Portfolio.”

Since anyone who writes something similar would end up with the same content, this time I had an AI generate the article.

Google AI “Gemini” and Microsoft Copilot.

I hope you’ll compare the quality of the articles.

My opinion is written at the end of the article.

I asked Microsoft Copilot to create a blog article titled “Assemble an Original EA Portfolio to Ride the Market Waves! Anomaly-Based, Trend-Following, Counter-Trend, and Multi-Logic Editions.”

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Article written by Generative AI [Microsoft Copilot]

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Building a portfolio of EAs (Expert Advisors) is an important method to ride market waves while dispersing risk and aiming for stable operation. An EA portfolio combines different EAs to construct a trading system that leverages their complementary traits. Below is a detailed explanation of how to build and think about an EA portfolio.

Advantages and Disadvantages of an EA Portfolio

Advantages

Can pursue maximum profit while achieving risk diversification: By combining different currency pairs and trading logics, an EA portfolio enables stable operation less affected by market movements. To avoid reliance on the behavior of a single pair, it’s important to combine multiple EAs.
Strong against market fluctuations: By mixing different trading logics such as trend-following and range-trading, and momentum vs mean-reversion, you can build a system that handles sudden market changes.

Disadvantages

Difficult to determine compatibility among EAs: When assembling an EA portfolio, you must test how well each EA works together. If not assembled properly, your account could be at risk during sharp market swings.
Hard to find the optimal settings: Finding the “optimal” settings for each EA, such as currency pairs and lot sizes, is a challenging task.

How to Build an EA Portfolio

Anomaly-Based:
- Anomaly-based EAs trade by detecting unusual price movements. For example, when prices spike up or drop rapidly, they detect the movement and enter or exit accordingly. Anomaly-based EAs are effective when market predictions are difficult.
- When composing anomaly-based EAs, it’s important to build algorithms that identify abnormal movements by analyzing historical price data.
Trend-Following:
- Trend-following EAs enter trades in the direction of the market trend. If prices are in an uptrend, they go long; if in a downtrend, they go short. They seek profits as long as the trend continues.
- When assembling trend-following EAs, select indicators to detect trends (moving averages, MACD, RSI, etc.) and set entry/exit conditions.
Counter-Trend:
- Counter-trend EAs enter at potential reversal points. When prices have risen or fallen excessively, they detect reversal cues and enter accordingly. Counter-trend EAs are effective at trend reversals.
- When building counter-trend EAs, it’s important to embed algorithms that identify reversal cues from past price movements.
Multi-Logic:
- Multi-logic EAs operate by combining multiple trading logics. For example, running anomaly-based and trend-following strategies simultaneously leverages their complementary traits.
- When composing multi-logic EAs, it’s important to test compatibility among logics and assign appropriate weights.

When building an EA portfolio, it’s recommended to evaluate each EA’s performance through backtests and demo trading, and to balance risk and return when combining them. Also, monitor and optimize as needed during operation.

Which type of EA to include should be chosen to fit the trader’s trading style and risk tolerance. Enforce risk management and construct a suitable portfolio.

“Ask Google Gemini to create a blog article titled ‘Assemble an Original EA Portfolio to Ride the Market Waves! Anomaly-Based, Trend-Following, Counter-Trend, and Multi-Logic Editions’”

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Article written by Generative AI [Google Gemini]

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Introduction

The stock market is a complex system that is constantly changing. For traders, it is not easy to keep making profits all the time. However, by combining a few strategies, you can ride the market waves.

In this article, we introduce how to build an original EA portfolio that combines four EA strategies: anomaly-based, trend-following, counter-trend, and multi-logic.

Characteristics of Each EA Strategy

1. Anomaly-Based EA

Anomaly-based EAs trade based on past patterns. For example, based on the anomaly that prices tend to rise at the end of the month, you can build an EA that buys at month-end and sells the following month.

Anomaly-based EAs are relatively simple but can be effective. However, anomalies do not always persist, so caution is required.

2. Trend-Following EA

Trend-following EAs trade in the direction of the trend. For example, if prices are in an uptrend, they buy; if in a downtrend, they sell.

Trend-following EAs are effective while the trend continues, but capturing trend reversals is challenging.

3. Counter-Trend EA

Counter-trend EAs trade against the trend. For example, if prices are in an uptrend, they sell; if in a downtrend, they buy.

Counter-trend EAs are good at catching trend reversals, but can incur losses while the trend continues.

4. Multi-Logic EA

Multi-logic EAs combine multiple strategies to trade. For example, combining anomaly-based and trend-following EAs allows capturing opportunities from both anomalies and trends.

By combining multiple strategies, multi-logic EAs aim for more stable operation. However, they are more complex to construct and operate.

Constructing an Original EA Portfolio

Constructing an original EA portfolio requires three steps:

Select each EA strategy
Configure the EAs
Operate the portfolio

1. Selecting Each EA Strategy

First, choose EA strategies from the four mentioned above that suit your investment style and risk tolerance.

2. Configuring the EAs

Next, configure the selected EA strategies. Each EA strategy has various settings. While the settings differ by strategy, they commonly include the following:

Entry conditions
Exit conditions
Position size
Stop-loss settings

Settings significantly affect performance, so adjust carefully.

3. Operating the Portfolio

Finally, operate the EA portfolio. When operating the portfolio, pay attention to the following:

Asset allocation for each EA strategy
Risk management
Regular evaluation

Asset allocation should be determined based on each strategy’s performance and your risk tolerance. Risk management is crucial to minimize losses. Regular evaluation helps you understand portfolio performance and make adjustments as needed.

Summary

Building an original EA portfolio allows you to ride market waves. However, constructing such a portfolio requires time and effort. Also, EA strategies are never perfect and can incur losses.

When operating an EA portfolio, always be mindful of risk and make careful judgments.

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That’s the article written by the AI

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How do you find it?

Google Gemini mixes stocks and FX.

The article structure is easier to read in Google Gemini.

The content of the articles from Microsoft Copilot and Google Gemini is not very different.

Because the sentences are mechanically generated, there is no writer’s personal touch, making the article feel impersonal and somewhat dull to read.

Now, about how I build my EA portfolio.

I began making EAs in 2020 and initially created about 10 anomaly-based EAs analyzing tendencies across Tokyo, Europe, London, NY, and other markets.

From the forwards of EAs sold on GoGoJungle, it seems there is no clear edge.

Even if one hits, it seems you can’t win with a simple anomaly that has no basis.

There may be basis for EAs based on Tokyo timing or London fixes, but ultimately, that anomaly works only when it does, and it ceases to have an edge when it stops working.

Therefore, when incorporating anomaly-based EAs into a portfolio, choose those with strong recent forward performance.

Next, about “Trend-Following” and “Counter-Trend.”

By nature, “Trend-Following” is strong in trending markets and high-volatility environments.

“Counter-Trend” performs well in range-bound or choppy markets.

I used to allocate the same amount of lots to both trend-following and counter-trend EAs, but I stopped this method soon after.

Since 2020, markets have been highly volatile and move rapidly when they move.

In such markets, counter-trend EAs just lose money.

When a trend-following strategy is profitable, counter-trend strategies lose, so wealth does not grow.

Thus, in today’s market where trend-following is advantageous, keep counter-trend EAs on smaller lots as a form of insurance.

Reversal Seven

https://www.gogojungle.co.jp/systemtrade/fx/49522

An EA that supports multiple logics and can hold up to three positions on a USD/JPY five-minute chart based on the evaluation derived from seven reversal strategies (Reversal Seven).

This EA is, in my view, the culmination of my reversal methods.

Probably, in the future, I won’t be able to create a reversal-type EA that surpasses this one on my own.

When adding a reversal-type EA to your portfolio, you should choose an EA that can perform in high-volatility markets like the current environment.

Until US dollar rates settle, high-volatility markets will remain disadvantageous for reversal-type EAs.

For now, reversal-type EAs should be used only as insurance.

By the way, Reversal Seven had opposite positions to trend-following during the recent currency intervention, which contributed to risk diversification.

The trend-following type is exceptionally compatible with the current market.

The test for how many strong EAs you can find is a showcase of an EA trader’s skill.

During the recent currency intervention, many discretionary traders seemed to be dragged by the market.

EAs designed to withstand sudden spikes would have been carried through the currency intervention as if it were a gentle breeze.

Finally, about Multi-Logic EAs.

In my early years, I focused on creating anomaly-based EAs.

Next, I developed both trend-following and counter-trend EAs.

Now I leverage the experience I’ve gained to create “Multi-Logic” EAs.

“Multi-Logic” might sound difficult, but it’s basically just combining multiple logics.

So, by mixing counter-trend, trend-following, and anomaly strategies, I end up releasing EAs that work well in forward tests. Whether forward testing succeeds is no different from single-logic EAs.

However, using multiple logics is a major advantage because it reduces the effort needed to build an EA portfolio.

Seven Elements

https://www.gogojungle.co.jp/systemtrade/fx/49099

An EA with multiple logics that can hold up to three positions on USD/JPY and GBP/JPY based on evaluations derived from seven methods (Seven Elements).

Seven Elements is my top pick that I expect to keep earning for a long time.

Right now, trend-following methods are advantaged in the market, so five of the seven logics are trend-following.

In the future, when a stable market returns, I will incorporate reversal and anomaly logics to create an EA that works in any market.

If you’re tired of choosing EAs, consider purchasing.

■ Summary

Many people who earn a positive annual return through EA trading build an EA portfolio.

EAs that maximize compounding effects are single- or multi-position EAs.

Try to operate with as diverse a logic mix as possible.

I will write about currency pairs another time.

About N-Point Martingale

People who earn with N-point martingale EAs regularly make withdrawals.

If you run a compounding N-point martingale EA without withdrawals, you will eventually go broke.

So, if you’re running an N-point martingale EA, abandon compounding and withdraw regularly.

For example, suppose you operate a 1 million yen account with a single martingale EA.

As funds grow, withdraw to keep the account at 1 million yen consistently.

In this case, the asset trajectory is similar to running a single-position EA at fixed lots.

It’s a bit odd for me to discuss N-point martingale EA because I don’t personally create them, so my words may lack persuasiveness.

I have tested martingale EAs on USD/JPY, GBP/JPY, and EUR/USD, but I haven’t yet created a convincing EA.

I hope to release one someday.