EA Craftsman’s EA Course【018】The First Step is Crucial! Beginners in Automated Trading Should Choose the Right EA
I’m Interested, But…
Once you’ve gained some trading experience with FX…The waiting time for a chance feels tedious…
If a chance comes while you’re sleeping, it would be frustrating…
From such worries, a certain number of people begin to take an interest in automated trading.
I understand there are tools like MT4 and MT5 that make it easy to run automated trading.
I also understand that there are many EAs (automatic trading programs) in the world.
However… there are too many, and I don’t know which one to choose.
I found an EA that performs well and is stable, but I’m uneasy because I don’t understand its internal workings…
Elements of Anxiety
Yes, there are several causes of anxiety when operating an EA, but isn’t “not understanding the inner workings” a common worry among many traders?When things are going smoothly, that may be fine, but when drawdown starts, if you don’t know the reason…
- Continue operation
- Pause temporarily
- Stop completely
The Black Box
As I mentioned in the 6th EA course, once your EA operation improves, incorporating temporary pauses and reactivations can yield performance beyond full automation.In that course, we only discussed timing by comparing with backtests, but to further improve performance you also need to understand the reasons for drawdowns to some extent.
However, doing this perfectly is difficult. The reason is that most EA developers do not disclose their logic.
Basically, it’s a black box.
How to Reduce Anxiety
It should be obvious from the developer’s perspective, but even so…Is there absolutely no explanation of how it earns, a complete black box?
Is there no basis for entry and exit decisions?
Basically, is this some amazing EA that you’re told to trust and just run without question?
Or is there a proper explanation of how the EA earns?
There is a range of opinions on this.
If we go this far, you’ll likely see the conclusion, and yes, that’s right.
You should choose an EA with higher transparency among them.
Even if it’s a black box, you should be able to roughly understand how it earns.
If you do that, you may still face drawdowns or unexpected events, but the frequency will likely be reduced.
If so, you can operate with less anxiety.
Perseverance Yields Power
Therefore, beginner EA operators should value transparency over flashy, high-earning EAs and choose ones with as much internal visibility as possible.
Every EA has drawdowns.
If you become anxious and paranoid and can’t continue, no matter how excellent the EA is, it’s meaningless.
If you can’t continue, it’s pointless. The same holds for discretionary trading strategies.
No matter how high the expected value of a method, if the win rate is too low and it doesn’t suit your personality, you won’t be able to keep at it.
If you continue, profits will come in time… studying can lead you to Tokyo University… you may stay in a job you dislike if you continue and eventually succeed… you understand it in your head, but sometimes you can’t turn it into action.
It’s the same thing.
When choosing an EA, consider not only backtests, forward tests, and other performance metrics, but also transparency, and your EA life will become more enjoyable.
■ My Developed EA Concept and Operating Policy
EA craftsman’s EA (the Three Arrows) is here
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