2/17★Sometimes I borrow the power of ChatGPT, entry 27 - EA Beginner Course - Navi+ - GogoJungle | Auto Trading - Market Analysis

FX Automated Trading, the EA developerReiwa's Double-Ehere.

This series has been written with the aim of posting every day since last year.

Probably it has now continued for almost a year!

If you read what I have written so far,

I am confident you will approach better EA operation.

And, since I’d like to take a short break,

I will continue posting with the help of ChatGPT.

Occasionally, irregularly, I will post as before.

Walk-Forward Analysis and Market-Specific Logic – Tips for Successful EA Operations

Hello, I am Reiwa's Double-E, an EA developer.

Today, based on my exchanges with reader T, I would like to think about walk-forward analysis and how EA can handle markets where it excels or struggles. In EA operations, walk-forward analysis is a very important step to verify logic effectiveness, but setting the period and interpreting results can be challenging.

T asked the following questions:

【T】

“For walk-forward, if I set the forward to one year, it becomes quite unstable (there are periods of poor performance within that year). Would it be okay to evaluate over 3 or 5 years as well? During a year when performance is poor, regardless of parameters, it’s hard to determine if optimization is good or bad…”

Why a one-year forward test produces unstable results

In walk-forward analysis, a specific period is set as the test period and then validated with unused data afterward. As you said, T, a short period like one year makes it more likely that market fluctuations or certain market environments do not align with the EA.

For example, within a year, trend and range markets can alternate. If the EA encounters its less-favored market environment infrequently, its performance may drop.

Benefits of evaluating walk-forward over 3 or 5 years

As in T’s suggestion, extending the forward period to 3 or 5 years is a good idea. Evaluating over a longer period allows us to broadly verify how the EA handles market fluctuations and different environments.

In particular, focus on the following points:

Whether it can handle diverse market environments:

Longer tests can assess how the EA performs stably across trend markets, range markets, periods of high volatility, and low volatility.

Allowance for temporary regressions:

A one-year forward test may make evaluation difficult if a bad period coincides by chance. Looking at longer terms like 3 or 5 years shows whether temporary losses or adjustments can be endured.

Countermeasures for weak markets – cover with another logic

Also, as in T’s idea, analyzing weak markets and covering them with an EA that has a different logic is a very effective strategy. This is a form of portfolio management, combining different logics and methods to adapt to market environments.

For example, if one EA is strong in trend markets, and another EA run concurrently is strong in range markets, you can expect stable performance even as markets change. By understanding the characteristics of each logic and building a portfolio aligned with strong and weak markets, risk can be diversified for long-term operations.

Keys to successful EA operation – analysis and flexible response

From the exchanges with T, what becomes clear is that how you interpret walk-forward results and the flexibility to use different logics by market are crucial.

Identify challenging market environments：

First, understand the market environments in which the EA excels, and verify performance in weaker markets.

Use multiple logics as needed：

If one logic cannot handle a situation, add another EA with a different logic to cover multiple market environments.

With such refinements, EA operations can aim for long-term stability.

Through exchanges with T, we had opportunities to consider walk-forward period settings and logic switching. Results that are hard to see in one year might be revealed in three or five years of forward testing.

Everyone, please try to find period settings and logic combinations that fit your own trading style to aim for more stable operations!

And with that, please continue to have a good trading life!

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【From Beginning to Intermediate: Summary of the EA Starting Path】

First, mastering, “How to install the EA” is essential.

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MT4 EA (Expert Advisor) and Indicator Installation Procedures

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

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※ Gogojungle Video Version ※

Even at first, you won’t understand everything at once, and you may stumble. That’s normal.

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,” so please use it!

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

【How to Choose an EA】

Now that you feel you can operate an EA,

you might think, “I can’t find a winning EA… I don’t want to lose…”

So, Reiwa’s Double-E has published articles that help with this via backtesting to some extent.

The following articles were serialized.

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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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Backtesting periods are usually longer than forward periods, and

“Did the forward win by chance?” can be estimated by mastering backtesting evaluation methods.

【How should FX risk management be done?!】

And, no matter how excellent an EA seems,

FX collapses if risk management is neglected.

So for EAs, how should risk management be done?

This is answered in the following article.

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■ About the Calculation Method of “EA Risk Management”

https://www.gogojungle.co.jp/finance/navi/articles/64703

【EA Operation Mindset Also Matters】

And, to sustain EA operations long-term, the “EA operation mindset” is also important.

Regarding those articles,

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12/30 Year-End & New Year SP!! The EA Full Explanation Course Part 3

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

8/12 [Obon Holiday Special!]] Become an EA Master! “EA Operation Mindset”

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

8/17 [Obon Holiday Special!] Become an EA Master! “Notes during EA Operation”

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

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With that said,

the content is substantial and quite important,

even if you cannot understand it immediately, please be sure to review!

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【Reiwa's Double-E EA Product List】

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

Specifically, categorized the EA of 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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【Reiwa's Double-E Serialized Articles】

■ EA Beginner Course

https://www.gogojungle.co.jp/finance/navi/series/1700

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About “How to calculate EA risk management”

https://www.gogojungle.co.jp/finance/navi/articles/64703

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

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

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

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

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

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

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

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

【Reiwa's Double-E's Belief】

Develop EA with honest methods,

gain more supporters,

maintain a long-term WIN-WIN relationship,

and aim to revitalize the EA market and raise literacy.

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