2/4★Sometimes I borrow the power of ChatGPT, its part 14
FX Automated Trading, the EA developerReiwa’s Double-I.
Since last year, this series has been written aiming for daily posts.
I think we’ve managed to continue for about a year now!
If you read what I’ve written so far,
I believe you’ll approach a better EA operation.
Also, I’d like to take a short break,
and I’ll continue posting with the help of ChatGPT.
Occasionally, I’ll post irregularly as before.
Want good EAs – regardless of the EA developer, diversify your portfolio
This time,
I’d like to talk about choosing good EAs without depending on developers and building a diversified portfolio to spread risk.
Many people may place importance on the reputation and track record of the developer when choosing an EA, but
that alone may not be enough to achieve proper risk diversification.
The logic of EA developers tends to have quirks
The logic designed by EA developers tends to carry over the developer’s quirks.
Even if they’re developing different types of EAs, timing of entries and exits, and the technical indicators used often reflect the developer’s patterns.
As an EA developer myself, I try to test diverse logics, but
I inevitably end up unconsciously incorporating frequently used technical indicators and trading patterns.
As a result, even if the EAs are different, they may enter or exit at similar timings under the same market conditions.
Risk of using only EAs from the same developer
This “quirk” means that
if you build a portfolio using mostly EAs from the same developer, even if they appear to be different, you’re more likely to incur losses simultaneously when the market turns adverse.
Even with different EAs, they are trading under the same market conditions, exposing you to similar risks.
For example,
when a market situation causes all EAs to be stopped out at once, the portfolio can suffer a large hit.
That’s because, although the individual EAs may appear to run on different logics, they operate under similar conditions.
It’s important to diversify EA developers
Thus, diversifying EA developers is an effective method of risk diversification.
Using EAs created by different developers helps avoid each developer’s unique logic quirks and enables a more balanced portfolio.
For example, combining an EA from Developer A with one from Developer B allows trading that suits different logics and market conditions, making risk diversification possible.
This reduces the risk of large losses in a single market environment.
What I noticed by looking at other developers’ logics
As an EA developer, I pay attention not only to the EAs I develop but also to the logics of others’ EAs.
By examining each developer’s approach and methods, I understand which EAs perform well in which market conditions, and which are exposed to similar risks.
One thing I’ve realized is that diversifying EA developers can greatly reduce overall portfolio risk.
This may be a nuance that’s not often noticed, but it’s a very important concept in EA management.
Tips for building a portfolio
When building a portfolio with EAs, try to incorporate EAs from different developers.
This helps avoid the quirks and risks inherent to developers and enables more balanced operations.
This should contribute to long-term profitability stability.
Also, it isn’t enough to simply choose different developers; it’s important to combine different logics and strategies as well.
For example, generally combining trend-following EAs with range-bound EAs, or short-term scalping with long-term position-holding EAs, increases the likelihood that at least one will perform well in any market state.
Summary
Because the logic of developers tends to have quirks, relying too much on EAs from the same developer is high-risk.
By incorporating EAs from different developers, you can spread risk and achieve more stable operation.
This content may be less noticed, but it is a very important perspective for effective EA operation.
Please adopt this mindset, review your portfolio, and implement thorough risk management.
With that, please continue your good trading life!
See you!
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MT4 EA (Expert Advisor), Indicator Installation Procedures
https://www.gogojungle.co.jp/post/1/8212
※ Gogojan Video Version ※
Even at first, not everything can be understood at once, and I’m sure some will stumble.
I also stumbled many times at the beginning, so don’t rush—you’ll be fine!
If you have questions, there is a “Contact Form” that you can use!
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■ Gogojan “Contact Form”
https://www.gogojungle.co.jp/inquiry
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【How to choose an EA】
Okay, when you feel you can operate an EA,
you may worry, “I don’t know which EA will win… I don’t want to lose…”.
So Reiwa’s Double-I restricts to the extent that
“backtesting” can determine roughly well or poorly,
and we’ve serialized the following articles.
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■ How to find a winning EA from backtesting
https://www.gogojungle.co.jp/finance/navi/series/1714
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Forward testing is important, but
backtesting supports it.
In most cases, the backtest duration is longer than the forward period, and
whether you won during forward testing can be estimated by mastering backtest evaluation methods.
【How should EA risk management be done?!】
And no matter how excellent an EA you obtain,
FX collapses if risk management is neglected.
So in the case of EA, how should risk management be done?
That question answered in the following article.
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■ “How to calculate EA risk management”
https://www.gogojungle.co.jp/finance/navi/articles/64703
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【EA operation mindset is also important】
And, to sustain EA operation long-term, the mindset of EA operation matters as well.
For those articles,
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12/30★ Year-end and New Year SP!! EA Full Explanation Course Part 3
https://www.gogojungle.co.jp/finance/navi/articles/80551
8/12【Obon Holiday Special】Now you too can master EAs! “Mindset for Improving EA Operation”
https://www.gogojungle.co.jp/finance/navi/articles/72829
8/17【Obon Holiday Special】Now you too can master EAs! “Cautions during EA operation”
https://www.gogojungle.co.jp/finance/navi/articles/73797
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That said,
the content is quite substantial and important,
even if you can’t understand it immediately, please make sure to read it!
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【Reiwa’s Double-I EA Listing】
https://www.gogojungle.co.jp/users/112481/products
Specifically, categorized by genre the EAs of Reiwa’s Double-I
https://www.gogojungle.co.jp/finance/navi/articles/67162
(Genre diversification is essential when building a portfolio)
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【Reiwa’s Double-I serialized articles】
■ EA Beginner’s Course
https://www.gogojungle.co.jp/finance/navi/series/1700
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“About calculating EA risk management”
https://www.gogojungle.co.jp/finance/navi/articles/64703
【Portfolio version】 EA risk management calculation
https://www.gogojungle.co.jp/finance/navi/articles/65978
https://www.gogojungle.co.jp/finance/navi/articles/64738
Where to check first when you don’t understand something about EAs
https://www.gogojungle.co.jp/finance/navi/articles/65619
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■ How to find a winning EA from backtesting
https://www.gogojungle.co.jp/finance/navi/series/1714
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■ No sugarcoating! Gogojan raises a question!
https://www.gogojungle.co.jp/finance/navi/series/1701
Where is Gogojan’s inquiry form?
https://www.gogojungle.co.jp/finance/navi/articles/64723
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■ Reiwa’s Double-I “Push Buy / Pullback Sell” logics unveiled!!
https://www.gogojungle.co.jp/finance/navi/articles/65010
■ Double-I FX Tales
https://www.gogojungle.co.jp/finance/navi/series/610
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【Reiwa’s Double-I Beliefs】
Develop EAs with proper methods,
gain broad support from many people,
and maintain a long-lasting WIN-WIN relationship,
to vitalize the EA market and improve literacy.
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