8/23 Why Trend Following EA Isn’t Selling

FX automated trading and EA developers’ Reiwa era double E-E (double i-e).

There are various types of EAs.

Anomalies, scalping, trend following…

And

Among selling thousands of EAs,

my impression is that many people are concerned with win rate by instinct.

There is a strong impression that people favor EAs with a high win rate.

Originally, win rate did not matter for an EA,

it is determined by the interaction between win rate and reward-to-risk

and ultimately leads to positive profit and loss.

However

why is a high win rate preferred?

I would like to think about it in my own way.

“Because low win rates would ruin your mental state.”

That seems plausible.

To put it more plainly, if one has high self-display motivation,

they would post it on SNS,

and in that case, days with high win rates would occur more often,

so perhaps a high win rate is preferred.

“Because you can’t hold positions for long.”

I also feel this is the case.

Generally, trend-following type EAs have

lower win rates, but when they win, they push profits to the limit and take profit.

In other words, it takes time accordingly.

Then,

“Now there’s unrealized profit, but what if it suddenly reverses?”

I get anxious and may close the position.

In the worst case, I might even manually close it.

If that happens,

profit-taking becomes scalping if closed manually,

and if I don’t close losses manually and keep it running,

the risk-reward deteriorates,

and the original EA performance cannot be demonstrated,

increasing the odds of loss.

So I’ve thought about various things.

If anything else comes to mind, I’ll write it.

Well then!