2/13★Sometimes I borrow the power of ChatGPT, part 23 - EA Beginner Course - Navi+ - GogoJungle | Auto Trading - Market Analysis

FX Auto Trading, EA developerReiwa’s Double-Eis.

This series has been written aiming for daily posts since last year.

I think we’ve continued for nearly a year now!

If you read what I’ve written so far,

you’ll surely be closer to better EA operation, I’m confident.

Also, there are times I want to take a short break,

and here I want to continue posting by leveraging the power of ChatGPT.

From time to time, I will post irregularly like before.

There is no “Holy Grail”! It is important to understand the risks and features of EAs

Hello, I’m Reiwa’s Double-E, an EA developer.

Today, based on questions and feedback from customers,I’d like to talk about the essence of EAs and risk management.

In particular, among common questions are **“How to prevent steady profit from turning into a big loss”** and **“Free or cheap EAs that lose a lot”** are often raised.

Each time I feel the importance of investment literacy and that we, as EA developers, must thoroughly disseminate information to help users understand the characteristics and risks of EAs.

This time, learning from such customer reactions, I’ll consider the reality of EA operation and the gap with expectations.

Customer concern: “Free EAs lost a lot…”

First, here is what one customer sent:

【Customer】

“From last week to today, most of the free or cheap EAs I received have suffered heavy losses due to the dreaded ‘dollar-cost averaging’ (DCA) pattern. Since it’s free, perhaps unavoidable, but isn’t it necessary to reduce the probability of big losses a bit more? This makes me hesitant to purchase high-priced EAs. Please,”

Reading this, my initial thought is that completely preventing the DCA pattern is realistically difficult.

Furthermore, regarding EAs offered free or cheaply, expecting a “holy grail” is a misunderstanding in itself.

EAs that follow the DCA pattern perform very well in certain market conditions, but carry the risk of large losses from sudden market shifts.

It’s impossible to eliminate this risk, but proper risk management can minimize damage.

Is it worth addressing? Criteria

It’s possible to explain things politely to customers, but what matters here is the) cost-effectiveness

.If basic literacy on EA operation and investment is lacking, it’s often difficult to have them understand in a single email.

For example, explaining long-term use of EAs, how to think about drawdown range, how to manage risk, etc., needs careful, piece-by-piece explanation, but it’s often hard to grasp all at once.

Therefore, I may deliberately skip (ignore) certain points. Because my newsletter and past information have explained risks and how to use EAs many times. If you’ve read them, you should understand, and it’s more effective to raise your own literacy than repeating explanations.

“There is no Holy Grail – Do not have excessive expectations of EAs

After that, when I distributed a newsletter about “I want to develop new EAs that are closer to users’ needs,” another email from the same customer arrived:

【Customer】
“The newsletter today mentioned new EA development, which is wonderful. I look forward to it. First, I think reducing the DCA is the key. Thank you.”

Reading this, I thought,“Indeed, my initial judgment was not wrong.”

In the end, the expectation to “create a Holy Grail” remains, and no matter how much the EA developer tries, delivering a 100% perfect EA is impossible.

To help users understand the essence of EAs

What matters here is clearly communicating the characteristics and risks of EAs.

It’s important to meet user expectations, but facing reality is also necessary.

EA operation is, above all, about balancing risk and return and using it skillfully, and it’s impossible to remove all risks.

If you hate the DCA pattern, choose a trend-following EA.
Don’t worry too much about short-term losses; operate with a long-term view.
Use proper money management to reduce risk.

By understanding these elements and maximizing EA performance, I believe you can succeed in investing.

Finally – Responsibility of EA developers

We EA developers have a responsibility to accurately convey the pros and cons of EAs.

No matter how good an EA we provide, if users do not know how to use it correctly, it’s meaningless.

Therefore, regarding risks and characteristics of EAs, we must convey them 100% without exaggeration.

To acknowledge the reality that “There is no Holy Grail,” I believe it’s important to continue information sharing and raise literacy.

So please continue a good trading life!

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【Flow from starting EA to intermediate level】

MT4 EA (Expert Advisor) and Indicator installation procedures

https://www.gogojungle.co.jp/post/1/8212

※ GoGoJungle video version ※

Even at the start, it’s impossible to understand everything at once, and surely some will stumble.

I also stumbled many times at first, so don’t worry, just keep going!

If you don’t understand something, use the “Contact form”!

https://www.gogojungle.co.jp/inquiry

【How to choose an EA】

Now that you’re ready to operate an EA,

you may think, “I don’t know which EA will win… I don’t want to lose…”.

So Reiwa’s Double-E explains that, to a certain extent, you can judge via

“backtesting.”

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■How to find a winning EA from backtests

https://www.gogojungle.co.jp/finance/navi/series/1714

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Forward testing is important, but backtesting supports it.

Backtest duration is usually longer than forward period,

and whether you’re winning by chance in forward is something you can gauge by mastering backtest evaluation.

【How should EA risk management be handled?!】

And no matter how excellent an EA you obtain,

neglecting risk management in FX will lead to collapse.

Therefore, for EAs, risk management how-to

the following article answers this.

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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 “EA operation mindset” is also important.

For those articles, see:

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12/30 Year-End Special!! EA Thorough Course Part 3

https://www.gogojungle.co.jp/finance/navi/articles/80551

8/12 [Obon Holiday Special!] Now you’re an EA Master! “Mindset for Improving EA Operation”

https://www.gogojungle.co.jp/finance/navi/articles/72829

8/17 [Obon Holiday Special!] Now you’re an EA Master! “Cautions during EA operation”

https://www.gogojungle.co.jp/finance/navi/articles/73797

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So,

this material is substantial and quite important,

even if you can’t understand it right away, please make sure to read it!

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【Reiwa’s Double-E EA Listing】

https://www.gogojungle.co.jp/users/112481/products

Specifically categorized EA listings for Reiwa’s Double-E

https://www.gogojungle.co.jp/finance/navi/articles/67162

(Diversification by genre is essential when building a portfolio)

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【Series articles by Reiwa’s Double-E】

■EA Beginner 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: How to calculate EA risk management

https://www.gogojungle.co.jp/finance/navi/articles/65978

Easy tips to spot scam products (in the case of EAs)

https://www.gogojungle.co.jp/finance/navi/articles/64738

https://www.gogojungle.co.jp/finance/navi/articles/65619

■How to find a winning EA from backtests

https://www.gogojungle.co.jp/finance/navi/series/1714

■No Sugar-Coating! GoGoJungle raises questions!

https://www.gogojungle.co.jp/finance/navi/series/1701

https://www.gogojungle.co.jp/finance/navi/articles/64723

■Reiwa’s Double-E opens up the “pullback buying / pullback selling” logic!!

https://www.gogojungle.co.jp/finance/navi/articles/65010

https://www.gogojungle.co.jp/finance/navi/series/610

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【Reiwa’s Double-E’s Belief】

Develop EA in a principled way,

and earn wider trust,

maintain a long-term WIN-WIN relationship,

aim to revitalize the EA market and improve literacy.

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