3/22★Sometimes I borrow the power of ChatGPT, this is part 52
FX Auto Trading, EA developerReiwa’s Double-IE here.
This series has been written with the aim of posting every day since last year.
Probably we’ve been able to continue for nearly a year now!
If you read what I’ve written so far,
I’m confident you’ll move closer to better EA management.
And so, I’d like to take a short break,
and here I will continue posting with the help of ChatGPT.
From time to time, I will post as before, irregularly.
Hello, I am Reiwa’s Double-IE, an EA developer.
Today, I would like to talk about “Risk management in EA trading.”
There are many EA traders in the world,
who say, “If it profits, withdraw each time, and when you’ve recovered the principal, continue with risk from there.”
It seems many people follow this approach.
Indeed, with this method, once cumulative P/L turns positive, psychological resistance to taking risks may decrease.
Operating without understanding the characteristics of EA is dangerous
However,personally I feel that “this method may not necessarily be based on understanding EA’s characteristics.”
This is because risk management is insufficient in the following points.
It may ignore the EA’s inherent risk management.
It may not account for drawdowns during bad periods for the EA.
EA is not something that profits every day; you must understand this.
EA has cycles of wins and losses; there are times when it runs perfectly, and times when it inevitably performs poorly.
If you overlook this, long-term stable operation becomes difficult.
Be careful with the word “monthly return”
From my experience, professional EA developers and traders tend not to use the term “monthly return.”
This is because the market does not move with a fixed monthly pattern.
It is a beginner’s misconception to think, “EA will make profit every day and every month.”
Even if there are EA that show temporarily excellent results, that is only short-term.
Even if such an EA exists, if you gain profits in the short term, you must also understand that there is a high possibility of large losses in the short term as well.
Put risk management first
What’s important when operating an EA is
**to focus on risk rather than chasing profits**.
To earn profits over a year, you must always anticipate drawdown equal to the annual profit.
Especially beginners tend to focus on profits and neglect risk management.
This is very dangerous.
Maintaining risk at a controlled level while operating with a long-term perspective is the key to success in EA trading.
Summary
In the end, EA trading aims for long-term stable profits, not short-term gains.
The idea of withdrawing profits as soon as you earn them is not sufficient for risk-aware trading.
EA will inevitably encounter drawdowns, so it is important to manage risk rather than reinvesting profits during those times.
Beginners, please operate with emphasis on risk rather than profits.
That’s all!
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【Flow from “Wanting to Start EA” to Intermediate Level】
First, mastering “installing EA” is important.
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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 may not understand everything at once and you will stumble.
I also stumbled many times at the beginning, so don’t rush—you’ll be fine!
If you don’t understand something, there is a contact form, so please use it!
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https://www.gogojungle.co.jp/inquiry
【How to choose EA】
Now that you’re ready to operate EA,
you may wonder, “Which EA looks profitable… I don’t want to lose money.”
So Reiwa’s Double-IE has published the following articles to help you assess through backtesting.
【How to manage EA risk!?】
And no matter how excellent an EA is,
A corresponding article is below.
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■“How to calculate EA risk management”
【EA Operation Mindset is also important】
And,to continue EA operation for a long time, the “EA operation mindset” is also important.
Those articles are here:
12/30 Year-end and New Year SP!! EA All-in-One 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 Improvement Mindset”
https://www.gogojungle.co.jp/finance/navi/articles/72829
8/17 [Obon Holiday Special!] Now you too can become an EA Master! “Notes while operating EA”
https://www.gogojungle.co.jp/finance/navi/articles/73797
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So,
the content is substantial and quite important,
so please read through it even if you don’t understand it immediately!
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【Reiwa’s Double-IE EA Listing】
https://www.gogojungle.co.jp/users/112481/products
Specifically, categorizing Reiwa’s Double-IE EAs by genre
https://www.gogojungle.co.jp/finance/navi/articles/67162
( Genre diversification is essential when building a portfolio )
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【Reiwa’s Double-IE serialization articles】
■EA Beginner Course
https://www.gogojungle.co.jp/finance/navi/series/1700
“About calculating EA risk management”
https://www.gogojungle.co.jp/finance/navi/articles/64703
https://www.gogojungle.co.jp/finance/navi/articles/65978
Tips for spotting shady material (in the case of EA)
https://www.gogojungle.co.jp/finance/navi/articles/64738
Where to check first when you don’t understand something about EA
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-IE’s Belief】
Develop EA with a solid approach,
aim to have more people support you,
and maintain a long-lasting WIN-WIN relationship,
with the goal of revitalizing the EA market and improving literacy.
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