EA operation time
Gekō desu.
We explain things to consider when creating a portfolio using multiple EAs.
- Diversification of automated trading and discretionary trading
- Diversification of trading accounts (brokers)
- Diversification of currency pairs
- Diversification of the timeframes you trade
- Diversification of the trading time periods
- Diversification of trade types
This time, we will think about the fourth and fifth items, “timeframe diversification” and “trading time period diversification.”
As you know, there are many automated trading systems (EAs), and each EA has its own characteristics.
Most EAs sold on GogoJangan are presumably designed to yield a certain profit by operating on a specific timeframe.
For MT4 EAs, it is likely that most are dedicated to one-minute, five-minute, fifteen-minute, thirty-minute, or one-hour charts.
Of course, EAs for four-hour, daily, weekly, or monthly charts can be created and may be sold, but because their number of trades tends to be very low, users tend to avoid them, making them less common on sales sites.
There are EAs with a different perspective on time—the “time” viewpoint that is not just the operating timeframe.
These are EAs that control the times during which you trade.
Some focus on specific time periods, such as aiming for the Goto-Day settlement price movement or trading only during the New York session.
In this way, by using various time perspectives, they are able to demonstrate their unique performance characteristics.
Conversely, that EA may be weak in many situations outside of a certain timeframe or certain trading hours.
Suppose you create a portfolio with ten EAs, and all ten EAs operate on the 5-minute chart during Tokyo time—what do you think would happen?
If that EA performs well, it could yield enormous profits.
However, if some event occurs causing turmoil in the currency market, all of those EAs could incur losses.
Whether it’s an EA or discretionary trading, there is no guarantee of profits, and I believe it is essential to anticipate losses as a condition for surviving in the world of investing.
From this perspective, if the timeframes and trading hours are dispersed, the impact of losses can be less severe.
