3/5★Sometimes I borrow the power of ChatGPT, issue 35
FX Automated Trading, EA developerReiwa’s Double-E.
This series has been written with the aim of posting every day since last year.
Probably we’ve continued for almost a year now!
If you read what I’ve written so far,
I’m confident you’ll come closer to better EA operation.
And since I’d like to take a short break,
I’d like to continue posting with the help of ChatGPT.
Occasionally, I will post irregularly as I’ve done before.
Trend-following logic is valuable – it provides a different value from scalping EAs
Hello, I am Reiwa’s Double-E, an EA developer.
Today,
I’d like to think about trend-following type EAs.
Currently, there are various types of EAs in the FX automated trading market,
Among them, trend-following EAs are a very valuable presence.
Characteristics and value of trend-following
Trend-following is a simple yet effective method of buying when prices rise and selling when they fall.
This logic aims to ride large trends, so while the win rate is low, each profitable trade tends to be large.
Specifically,
Win rate: around 40%
Average win amount is roughly twice the average loss amount
In other words,
Even with a low win rate, a single winning trade can bring substantial profit,
so, viewed in the long term, it’s a logic that can yield stable profits.
Comparison with scalping EAs
On the other hand, many EAs on the market are scalping-type. Scalping accumulates small profits from short-term price moves, and is also very popular.
Features of scalping EAs include,
Win rate: around 70%
Average win amount is roughly half the average loss amount
Scalping EAs have a high win rate, but a single loss trade tends to be large.
In other words, there are many winning trades, but if you don’t control losses well, you may face a big drawdown like a “steady drip becomes a flood.”
Why trend-following EAs are valuable
Currently, most EAs in the FX market are scalping, but
trend-following EAs are very valuable in contrast.
Trend-following aims for large profits by riding trends and offers value different from scalping.
Advantages of trend-following EAs:
By riding large trends, you can aim for significant profits in a single trade
If risk management is solid, you can expect long-term stable income
Since you don’t need to trade as frequently as scalping, it is less stressful
For these reasons,
trend-following EAs can balance a portfolio and contribute to risk diversification,
and I believe demand will continue to grow.
The need for better brushing up and sales
This time, the reason I felt trend-following type EAs are valuable is that
they offer a different approach from the many scalping-type EAs already in the market.
Such trend-following EAs are not yet widespread, and can offer users new options.
Therefore,
going forward, it’s important to brush up this EA further and devise sales and promotional methods to communicate to users.
For example, if you can explain to users how trend-following EAs differ in risk management and can target long-term profits compared to scalping, the user base that wants to adopt not only scalping EAs but also trend-following EAs might grow.
Summary
As discussed, trend-following type EAs are currently a valuable asset in the market.
While scalping EAs are mainstream, trend-following EAs offer a different value by targeting long-term profits,
and they can be an important option to balance a portfolio.
In the future, we should clearly convey the merits of trend-following EAs to users and
continue to brush up and improve sales.
Such diverse approaches to EAs can become a new method of asset management for users and lead to better results.
With that, please continue to have a good trading life!
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【EA Beginner to Intermediate Flow】
First, it is important to “master installing EAs.”
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MT4 EA (Expert Advisor) and Indicator installation steps
https://www.gogojungle.co.jp/post/1/8212
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※GoGoJungle video version※
Even at the start, it’s hard to understand everything at once, and you may stumble.
I also stumbled many times at first, so just stay calm and you’ll be fine!
If you have questions, use the “Contact Form”!
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https://www.gogojungle.co.jp/inquiry
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【How to choose an EA】
Now that you think you can operate an EA,
you might worry, “I don’t know which EA will win… I don’t want to lose…”.
So Reiwa’s Double-E has published the following articles to help with backtesting to gauge quality.
【How to manage EA risk!?】
Then, even if you obtain a highly capable EA,
This is explained 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
For those articles,
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12/30 End-of-Year Special!! EA full-understanding course Part 3
https://www.gogojungle.co.jp/finance/navi/articles/80551
8/12【Obon Holiday Special!】 Now you too can become an EA master! “EA operation mindset”
https://www.gogojungle.co.jp/finance/navi/articles/72829
8/17【Obon Holiday Special!】 Now you too can become an EA master! “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 don’t understand it immediately, please make sure to read it!
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（Portfolios require genre diversification）
【Reiwa’s Double-E’s beliefs】
Develop EA with principled methods,
gain the trust of more people,
and maintain a lasting WIN-WIN relationship,
to energize the EA market and improve literacy.
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