EA sorting
Geko is here.
I am explaining portfolio creation in a series.
Until now,
- Diversified trading between automated trading and discretionary trading
- Diversification of trading accounts (brokers)
- Diversification of currency pairs
- Diversification of the timeframes you trade
- Diversification of trading sessions
- Diversification of trade types
and so on, writing about spreading risk.
This time, I will try to write about which EA to actually choose, though it will be quite subjective.
My first criterion when building a portfolio is the number of positions held per single trade.
As you may know, building a portfolio means running multiple EAs simultaneously.
Even if they are different in currency pairs or trade types, they can hold positions at the same time.
If you were running 10 EAs, even if each EA has a maximum of “1” position, the portfolio as a whole could hold up to 10 positions at once.
Even if each EA is operating at 0.1 lots, you might find that you are holding 1.0 lots in total without noticing.
In that case, there is a risk of insufficient margin and forced liquidation.
If the maximum number of positions is “1”, you can adjust the number of EAs working, but if there are mixed EAs that hold multiple positions, margin management becomes difficult.
Especially if some EAs perform averaging down or Martingale.
Therefore, if I were to choose, I would select portfolio EAs from those that hold at most one position at a time.
If you use averaging down or Martingale EAs, you would keep the number of active EAs to at most about two.
